Greetings Everyone!

I feel a little uncomfortable sending this message, when we have this current situation in Ukraine. I know this is on many of your door steps. It’s a heartbreaking situation to see the horrific images on TV, but also heartwarming to see how many of you in Poland have welcomed your neighbours who are in need.

A few of you have asked me to put something in writing about the current shipping situation, so here it is, summarised as best as I can.

The current situation

  • All shipping lines to Europe / UK have provided very little space available for used cars for Jan – Mar 2022 and some shipping lines have cancelled all shipments (eg.Armacup).
  • The carriers are not providing time estimates in advance and we are currently experiencing 3-4 month wait times before loading. Space is being confirmed right at the last minute.
  • This situation is affecting all used car exporters and all shipping lines; it’s not related to certain shipping agents or exporters here in Japan.

The Cause

  • COVID has reduced the workforce throughout the world and severely affected the shipping industry.This is not just for used car exports, it’s impacting the entire world trade and is contributing to inflation for all of our daily needs.
  • Mico-chip shortages in 2021 reduced new car production in Japan and now these cars are now being released. For whatever reason, they are taking priority over used car shipments out of Japan.
  • This is normally a busy time for Japanese car exporters, but many factors combined are making this the most challenging time I have seen in 10 years of exporting cars from Japan.

What we have done

  • This congestion started over a year ago, and I have continually advised our clients of potential delays since that time. It’s always been a balancing act, as some don’t like negative news. I have tried my best to be realistic and transparent at all times when we have reliable information.
  • Early on in 2021, I made significant changes to our shipping procedures. This included: (1) assigning a staff member- AGATA( tel. 0048 666 222 131) who is dedicated to logistics, developing stronger relationships with shipping lines, booking agents, and forwarders (2) Expanding the range of shipping lines that we use, some of which had considerably higher rates than others (3) Improving our IT systems so we can handle this additional workload and improve customer communication. These changes took significant investment, however I feel we have been able to improve our service and we did significantly reduce shipping times throughout 2021.

Shipping Prices and Invoicing

  • Previously, our policy had been to incorporate all shipping costs (ocean freight, forwarding, port fees, postage of books) so that there is one fixed invoice amount – or line item – when we invoice shipping. The challenge to this policy, and some feedback I received, was that our shipping rate appeared higher than other exporters. This may have been because they (1) invoiced separately for things like port storage, sending documents, freight forwarding fees, or (2) did not use shipping lines which were higher in price.
  • At the start of 2022 it became clear that we could not predict the future as well as before; delays were getting longer and shipping prices were rising too fast. Therefore, we advised that we would adjust shipping and freight forwarding costs after the first invoice was issued, if it was needed. This means any cars waiting to ship might get another invoice after shipping, however this will only happen when we make a significant loss. This seems like the fairest option given the situation.

Misinformation and rumours

  • There appears to be some misinformation floating around among importer groups, on social media, and some even some low-grade exporters claiming that there are no shipping delays. This all appears to be marketing puffery by some businesses who are desperate for new business, perhaps they got some limited space and thought it would be advantageous to promote this. Below are some references from the industry, so that we all have some accurate information about the current situation.

Port congestion “Overall, delays hit new records every month. This situation is unprecedented.”

“As we look at the global trends in 2022, there will likely be continued confusion and chaos.”

Container prices are approximately 800% higher than April 2020

“We are currently experiencing a logistical nightmare caused by the COVID-19 pandemic. This has resulted to delayed booking/shipping of vehicles. Unfortunately, this problem is not only affecting us but the entire motor industry at large and may continue for a while:
“There is no prospect of having ship space to Europe. There would be no space in February and March. (We recommend that you don’t sell cars to the area now)”

“Unfortunately, 2022 has not started off as we had hoped”

“Deutsche Bank’s congestion index points to ongoing pressures and bottlenecks in the broader supply chain, and freight rates remain very high”

While I don’t like to be the bearer of bad news, I hope this provides you with some more genuine and reliable information about the current situation. On a positive note: this might just reduce car prices for many markets as some buyers take a break