Port congestion

Port congestion caused by chronic box shortages in Asia, Europe and US

Port congestion caused by chronic box shortages in Asia, Europe and US. Equipment shortages in Chinese ports, particularly Qingdao, Lianyungang, Ningbo and Shanghai have intensified over the last week with delays to vessels increasing the confusion and container shortages.

According to the Container xChange, US ports on the west coast, and further east in Chicago in particular, have struggled to cope with a surge in imports, putting West Coast facilities “under immense pressure”.

Container xChange reports, “The many containers arriving at the ports must be transported to terminals and warehouses. For that, they need chassis. Chassis that many places are now in shortage, creating congestion issues. Containers stuck at the ports also mean that many operations are put to a halt. Something, that also influences the container availability.”

US West Coast port congestion was confirmed by US transport consultant Jon Monroe, who said, “US importers and trucking companies struggle to work with some of the terminals, especially in the ports of Los Angeles and Long Beach.”

“I understand that this week terminal pick-ups were more problematic as labour took time off on election day. Chassis are still an issue. Most decent sized trucking companies are trying to utilise street turns,” he added.

Monroe also pointed to the tribulations Ocean Network Express (ONE) which has seen vessel delays causing major congestion at its terminal. “And the problems are not limited to the terminals, with congestion at the ports is causing delays on this inland rail and intermodal trucking networks,” added Monroe.

Meanwhile, Danish consultancy Sea-Intelligence reports that vessel schedule reliability, for all the carriers, has taken a hit. “Global schedule reliability plummeted in 2020‑Q3 to 65.0%, which is the lowest global quarterly schedule reliability recorded by Sea‑Intelligence and is lower by a considerable ‑14.6 percentage points year-on-year,” said the consultancy report.

Maersk owned Hamburg Sud was the most reliable carrier, with a Sea-Intelligence rating of 76.5%, with nine of the top 15 lines recording reliability statistics of 65% or below, with one carrier below 50%.

The reliability of the lines is hampered in part by the situation in Asia which is every bit as congested as the US ports. “Equipment is scarce at many if not most China Base Ports. In some ports like Xingang, factories may be draying containers to Qingdao. Unfortunately, Qingdao is also a problem,” reported Monroe.

In addition, Monroe said that some vessels are departing China without a full load as container availability remains patchy. “Even if you get space, equipment availability may be delayed. This might cause shipment to be delayed for several weeks,” he said.

Darron Wadey at the Dutch consultancy Dynamar believes the “Transpacific routes are counter intuitive. To the USEC, capacity has risen by 16% (August 20/September 19) and by 8% to the USWC. With demand struggling, an increase in supply should lead to pressure on rates, which, as we can see, has not happened.”

Using the statistics from two key indexes Wadey argues that while the average weekly rates according to Wadey in the first 17 weeks of this year, up to the end of April, rates were 11% down, year-on-year. From May onwards Pacific rates have been increasing and up to week 43 they have been at 105% higher, on average, said Dynamar.

Wadey believes that a similar trend can be seen on the Asia to Europe trades, though with different figures. “From the Far East to Europe, the average weekly rates for the first 43 weeks of this year are around 23% higher than for the same period of 2019.”

He went on to say, “More often than not, such performances can be explained by the fundamentals. For Far East to Europe, available trade capacity dropped by 15% (July/July). Ergo, as capacity (supply) dropped 5% more than carryings (demand), it is logical that rates increased.”

Wadey was a little more circumspect on the behaviour of the container trades on the both the Pacific and Asia Europe, claiming that, “Looking forward, is always a jump into the unknown, but some brave souls try it all the same.”

Before offering the analysis helped by leading industry organisations. “Hackett Associates and the National Retail Federation in their forecast (from September) predicted that October through to December this year will still be difficult and that handlings in the main US retail ports will still drop by 6-7% for the year, although this was significantly better than previous estimates. I suspect that subsequent estimate(s) might see further revision upwards, but not massively so and I do have sympathy with their view that any uptick will run out of steam eventually.”

Jon Monroe was more forthright, “I have never seen a situation such as the one we face with the carriers. No space, no equipment, no service.”

For Monroe looking ahead to the next contract negotiations he believes that the minimum quantity commitments, daily free time and space guarantees will be key elements.

However, Monroe’s parting shot in this week’s round-up of the state of Pacific container business was blunt. “We should remember that carriers began managing (manipulating) the space before contracts were completed in order to keep rates up to a certain level. Once the contracts were completed, carriers kept blank sailings for another seven weeks, thereby creating a backlog of bookings.”

Monroe acknowledges that there has been a surge in demand for capacity, but adds, “But what made this so terribly difficult was the early manipulation by the carriers to create a tremendous backlog. So, if the carriers did not create this problem, they certainly were a major contributor to this mess.”

Origin ONE CMA CGM COSCO
Qingdao 40‘GP/40’HQ shortage 40’GP/40’HC/45’HC shortage 40’HC shortage
Dalian 40’HC shortage 20’/40’HC and 40GP shortage Normal
Tianjin 40’HC shortage 20’/40GP/40’HC shortage 40GP/40’HC shortage
Shanghai 40’GP/40’HC shortage 40’GP/40’HC shortage 40GP STRICT/40’HC shortage
Ningbo 40’GP/40’HC/40NOR shortage 20’GP/40’GP/40’HC shortage 40’HC shortage
Fuzhou 40GP/40HQ shortage 20GP/40GP/40HQ shortage Normal
Xiamen 40’HC 40GP heavily shortage 40’HC and 40GP heavily shortage 40’HC shortage
Shenzhen Normal 40’HC shortage Normal
Nansha 40’GP/40HQ  shortage 40’GP/40HQ  shortage Normal
Chongqing 40’HC shortage Normal Normal
Kaohsiung 40’GP/40’HC shortage 20’GP/40’GP/40’HC shortage Normal
Keelung Normal 20’GP/40’GP/40’HC shortage 40’HC shortage
Taichung 40’GP/40’HC shortage 20’GP/40’GP/40’HC shortage 20’GP /40’HC shortage
Taoyuan 20’GP shortage 20’GP/40’GP/40’HC shortage 20’GP /40’GP/40’HC shortage
Lianyungang 40’HC shortage 40’GP/40’HC shortage Normal
Origin EMC ZIM MSC
Qingdao 40’HC Shortage 40’HC shortage 40’HC shortage
Dalian Normal Normal 20GP and 40’HC shortage
Tianjin Normal Normal 40GP/40’HC shortage
Shanghai 40’HC shortage 40’GP/40’HC shortage 40’HC shortage
Ningbo 40’HC shortage 40’GP/40’HC shortage 40GP/40’HC shortage
Fuzhou 40GP/40HQ shortage 40GP/40HQ shortage 40GP/40HQ shortage
Xiamen 40’HC shortage 40’HC and 40GP shortage 40’HC and 40GP shortage
Shenzhen Normal 40’HC shortage Normal
Nansha 40’GP/40HQ  shortage 40’GP/40HQ  shortage 40’HC and 40GP shortage
Chongqing Normal 40’HC shortage Normal
Kaohsiung Normal 20’GP/40’GP/40’HC shortage n/a
Keelung Normal 20’GP/40’GP/40’HC shortage n/a
Taichung Normal 20’GP/40’GP/40’HC shortage n/a
Taoyuan 20’GP/40’GP/40’HC shortage 20’GP/40’GP/40’HC shortage n/a
Lianyungang 40’GP/40’HC shortage 40’HC shortage 40’HC shortage
Origin SM LINE HAPAG-Lloyd
Qingdao 40’GP shortage 40HQ shortage
Dalian n/a Normal
Tianjin n/a Normal
Shanghai 40GP shortage 40GP shortage
Ningbo Normal 40’HC shortage
Fuzhou n/a 40GP/40HQ shortage
Xiamen n/a 40’HC shortage
Shenzhen Normal 40’HC and 40GP shortage
Nansha n/a 40’GP/40’HC shortage
Chongqing n/a 40’HC shortage
Kaohsiung n/a Normal
Keelung n/a Normal
Taichung n/a 40’HC shortage
Taoyuan n/a 40’HC shortage
Lianyungang n/a 40’GP/40’HC shortage

 

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123 thoughts on “Port congestion caused by chronic box shortages in Asia, Europe and US

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