In what is the busiest time of year for the relocation market, various global challenges continue to impact international and domestic mobility.
As part of a continued series, below you will find our global updates for August. This update contains new or amended information from previous communications and is subject to change.
We will continue to share updates over the course of this year to ensure full transparency, and we are working closely with our Partners to minimise disruption for our clients and their employees amidst these challenging times.
Destination Services
European housing market
The housing market in certain European cities remains extremely tight, with locations which are considered holiday destinations causing added pressure on supply of options. Aside from London, other cities facing the lowest level of availability are Berlin, Munich, and Frankfurt, most of the Netherlands, including Amsterdam, Rotterdam and The Hague, Dublin, and some cities in Poland, particularly Warsaw and Krakow. Accommodation in Guernsey, Isle of Man and the Channel Islands has been equally tough to source this summer, with the difficulties across all cities relating to the aftermath of Covid and the influx of people from the crisis in Ukraine.
UK housing market
Home search within the UK remains challenging due to lack of stock on the market and in some cases, it can take longer to find and secure a suitable property. This is having a further knock-on effect on both the serviced accommodation options and household goods services, as individuals are often needing to stay longer in serviced accommodation, resulting in household goods needing to stay in storage longer, all of which can add additional costs to the overall relocation.
As we approach Autumn, we are likely to face further difficulties with securing properties in London, as international students begin to arrive from September. International students often have large budgets, which, added to the already tight market for one and two bedroom properties, means we may face difficulties with securing properties during this time. However, we continue to work closely with our Partners serving the city and will monitor the UK market in preparation for this influx.
Americas housing market
Across the United States, the rental market remains difficult to navigate, both for short-term housing and longer leases. With the market becoming extremely competitive, particularly in cities such as New York, Houston, and Miami, rent prices are continuing to rise. In an attempt to keep costs low, some of our Partners are having to remove services which would be historically typical in serviced accommodation (such as cleaning, cable TV, etc.)
To ensure minimal impact to our clients, we are working closely with our Partner network to monitor the market. We are expecting to see the rental market beginning to normalize in the next 6 months, bringing stability back to the general housing market in the US.
We are also facing a difficult housing market across certain locations in LATAM, however not to the extremes as those seen in certain US regions.
APAC housing market
We are still facing challenges with supply and demand in certain locations across APAC, with limited availability and the increased cost of living becoming more apparent in some cities. Those facing the most difficult housing markets at present are Singapore, Tokyo, Taipei, Seoul and Sydney. We are finding other locations across APAC to have better availability and will continue to monitor the market closely to keep our clients updated with the latest housing trends.
Rising utility costs
With the cost of living soaring and the current energy crisis, many governments are putting measures in place to help keep rising costs to a manageable level. However, it is worth noting that despite these measures, the rising cost will still be felt by those living in Europe, particularly as we head towards the colder season. Our clients should prepare to see an increase in assignee utility costs over the coming months.
Serviced accommodation
Serviced accommodation availability and occupancy globally is at an all-time high, with many bookings being extended due to a lack of housing. Destinations, particularly those in Europe, that remain particularly challenging due to strained market conditions include:
- Germany – specifically Berlin, Munich and Frankfurt
- Netherlands – Amsterdam, Rotterdam and The Hague
- Italy – across most major cities
- Poland – specifically Warsaw and Krakow
Alongside working closely with our existing Partner network, K2 are also on-boarding new Partners to ensure we can source as many options as possible within the serviced accommodation networks.
Schooling
Currently, schooling options are generally quite accessible across EMEA and back to the pre-pandemic levels we typically see, with many international schools having places across all age groups. Local and state schools are generally accessible, however those schools that are typically oversubscribed in certain catchments remain.
International schools in APAC will re-open in the first week of September with social distancing measures in place, with those in China offering virtual or distanced learning, with a view to transition back to in-person teaching during the first term.
Global shipping and logistics
Air freight
Airfreight lanes remain unpredictable at present, with some lanes showing a slight decrease in rates (certain places in the USA in particular) and other lanes increasing (Australasia and the far East), with no real signs of any particular lane stabilising in the near future. In most locations, space availability for air freight is steadily improving, but not yet to the same pre-pandemic levels. Air freight out of Moscow remains challenging, with limited availability due to supply and demand issues, and freight travelling via Istanbul. If possible, we do recommend finding alternative methods of transportation of goods out of Moscow, with road freight proving to be the most successful to date.
Sea freight & associated costs
Since 2020, the surge in freight rates and associated costs are largely the result of continued soaring demand versus reduced supply, availability of containers in location, and labour shortages. Globally, the sea freight industry faces ongoing challenges:
Europe: Ports in Europe haven been heavily impacted by the conflict between Russia and Ukraine. This has led several key European ports to ban Russian-flagged vessels from entering. Many ships have since been re-routed, pushing increased container activity into other European ports, leading to delays in some areas.
UK: For imports into the UK, clearance and delivery times are currently around 4-7 days. However, we may be able to reduce this time if an assignee has a delivery address and is ready to take the delivery.
Americas: The lack of space on vessels going into the East and West coast of the US (in particular, Los Angeles & Long Beach) and heavy backlogs at many US destined ports are causing challenges for sea freight. To put this into context, we are now facing a 66% rise in the North American ship container queue since early June 2022. This has had a knock-on effect on the length of time that shipments are taking to reach their final destination, with delays being felt worldwide, due to the hold up of containers that would usually be moving on the water.
APAC: Freight rates remain high but have stabilised across most routes out of or within the region. Availability is generally good, although though as expected, some locations have experienced delays during the peak season. Shipments into Australia and New Zealand are still facing delays and we are seeing freight which tranships via Asia to be most heavily impacted – direct sailings to these regions is advised. General port congestion remains an ongoing issue resulting in delays at trans-shipping points across the region. As we see lockdowns ease across China, ports begin to operate as usual. However, we should note that ongoing geo-political situations in Myanmar, Sri Lanka and most recently Taiwan may have an influence on operational delivery, which we will continue to monitor closely.
Customs clearance
We have seen in the past few months a higher proportion of consignments being pulled at customs for inspection. Customs agencies have a responsibility to ensure cross border security and compliance, and we are seeing further risk assessment measures being applied, with more random checks taking place. This in turn means the consignment will be opened and various packages can be pulled for inspection. In some cases, the goods will not be placed back securely into its original packaging and therefore more at risk of damage and breakages upon further transit to its destination. Goods inspected at customs will incur charges and also could result in an insurance claim if goods have subsequently been damaged, or worse, found to be missing.
Goods in and out of Russia
We are able to move belongings out of Russia, although in relation to the above update, goods could be more susceptible to an inspection at customs. K2 can support moves into Russia on a case by case basis, however we are unable to insure these.
Potential strike action
As we are seeing across many industry sectors, industrial action by workers pushing for pay to keep up with the cost of living, looks to become more commonplace. We are expecting planned strike action to take place this month at one of the UK’s biggest container ports; Felixstowe, this is planned from Sunday 21st August to Monday 29th August. Should strike action go ahead this will have an impact to moves in and out of this port leading up to, during, and after this period, however our logistical teams working with our Partners and contacts at various ports and subsequently planning alternative routes, via as Southampton and London Gateway ports, to mitigate disruption, where possible.
Overall, the consensus is that the current shipping situation will continue into 2023 due to unforeseen challenges and circumstances impacting routes and delivery times. However, with help from our Partners, K2 will continue to have close visibility on how the landscape is changing, so we can make appropriate port recommendations at the time of booking import and export freight.
Storage challenges (UK specific)
Due to the associated market challenges mentioned earlier, goods are needing to stay in storage for longer, resulting in storage providers facing challenges with availability. To find a solution for our clients, K2 are on-boarding a secondary Partner to help us with our storage needs. They have ample space in their new warehouse, meaning we can continue to meet storge demand for our clients.
Immigration updates
UK & Europe: We are still facing substantial delays in the processing of work permits in the UK and numerous European countries. For countries such as France, Spain, and Italy, it is becoming increasingly difficult to schedule visa appointments. However, as the situation in Ukraine continues to ease, we are expecting processing times to gradually return to normal after the busy summer period.
Mexico: One of the major service disruptions that we are facing in Mexico is assignees obtaining a tax ID number (these numbers are required for opening checking accounts in Mexico and receiving paychecks). Offices in Mexico remain extremely behind on processing due to closures during Covid and are still working through the backlog, making this an issue for expats waiting to receive their numbers. To try and overcome these challenges, we are working with our Partners to assist assignees with an alternative bank account that does not require a tax ID to give our assignees a way to have access to funds for daily transactions.
Singapore: The country remains one of the most popular destinations in the region due in part to the opened borders, but also the continuing restrictions in other regional locations. This level of increased activity is also reflected in the limited availability of appointments at the Ministry of Manpower (MOM) Service Centre with current waiting times around 2 weeks. However, this will not have a major impact on our assignees as arrival tasks can still be completed without an issued work pass card, but they may just take longer to do so.
Mainland China: We are continuing to see Mainland China gradually opening, with the government introducing a 7+3-day quarantine period for travellers entering the country. Furthermore, testing requirements to enter China have eased but remain more stringent relative to other countries across the region.
Hong Kong: It has recently been announced that Hong Kong will shorten the mandatory hotel quarantine period from 7 days to 3 days, with 4 days as ‘home medical surveillance’. This means that if Hong Kong overseas arrivals continue to test negative on each of these 4 days, then they may continue with daily tasks (like going to work) but must continue to wear a mask and avoid high-risk areas (like restaurants). This will be tracked via an app which displays their health status.
Positively, throughout APAC we are not seeing many countries re-impose stricter arrival/ entry regulations, even in locations where Covid rates have continued to rise. As a result of this, K2 remain hopeful that borders will remain open and entry requirements will slowly transition back to what they were pre-covid.
Important!
For the foreseeable future, we are asking our clients to speak to their internal stakeholders regarding the continued volatile situation and consider adjusting allowances and budgets as necessary – it is also recommended that temporary accommodation bookings include an option to extend. Additionally, with the expected increase in gas and energy prices, you may also consider revising (any) utility allowances.
Despite the various challenges faced we continue to strive to provide the very best service to our clients, to make the process as seamless, and time effective, as possible. For any further questions, please reach out to your dedicated K2 Account Manager, or contact us here.
