The movement of vessels at major Chinese ports have been impacted by the country’s lockdowns and port congestion appears to be spreading to other ports around the world. 20% of the world’s containerships are stuck in port congestion, reports maritime data intelligence company Windward and it calculates that a quarter of all vessels are specifically stuck at Chinese ports.
On top of low schedule reliability, carriers are either blanking sailings or diverting containerships away from Shanghai. The added volumes are creating operational strain and delays at other ports such as Ningbo-Zhoushan.
Windward said in a statement, “The number of container vessels waiting outside of Chinese ports today is 195 percent higher than it was in February. The trend is clear – in the April and March snapshots, there were 506 and 470 vessels, respectively, stuck outside of Chinese ports. In February, that number was only 260. In essence, lockdowns in China have nearly doubled the congestion outside the country’s ports,” concludes Windward (see Figure 1).
Windward’s Maritime AI data shows 506 vessels are waiting offshore at China’s ports which represents 27.7% of all the ships waiting outside of ports around the world (see Figure 2). Prior to the lockdowns, congestion at China’s ports in February accounted for approximately 14.8% of global container backlog.
Source: The Maritime Executive
No material impact on blank sailings has yet been observed from the lockdown in Shanghai said Sea-Intelligence. The lockdown in Shanghai differs from the Yantian closure in 2021 as Shanghai port remains open and operational, Sea-Intelligence said, with the “problematic part” being the closed manufacturing sites and warehouses, as well as a reduction in available trucking capacity.
Excluding blank sailings stemming from Chinese Lunar New Year, the company analyzed the impact of Shanghai’s lockdown on blank sailings, comparing it against the period when Yantian port closed in 2021. Data for Asia-North America West Coast shows the number of blank sailings in 2022 trended downward from a more elevated level. Conversely, blank sailings increased because of the COVID impact in Yantian in 2021 (see Figure 1).
Alan Murphy, CEO at Sea-Intelligence said, “In 2021 following the Yantian impact, it cannot be concluded that the impact on the market is the same. Quite the contrary, there has not yet been any material impact on blank sailings, beyond the normal state of affairs – to the degree than that market prior to the Shanghai lockdown can be called “normal”.”
Using the same methodology on other tradelanes, Murphy said there was no impact on Asia-North America East Coast compared to the Yantian impact. On Asia-Europe, the impact of the Shanghai lockdowns was very similar to that of Yantian in 2021. Sea-Intelligence cautioned, “It should however be clearly noted that we could still be in an early phase of the Shanghai lockdown, and if the factory closings persist, it is highly likely that the number of blank sailings will begin to increase in the coming weeks.”
Source: Sea-Intelligence
Data from Accenture’s Seabury indicated capacity out of Shanghai had fallen 40% from March although data from Clive Data Services showed load factors have reached the lowest levels ever recorded.
Niall van de Wouw, head of airfreight at Clive Data Services said Shanghai Westbound load factors were 49% last week. “The average between January and March was about 92%”, he said. “Capacity has shrunk tremendously – but even then, airlines can’t get goods on board. It’s very bad for profitability, it’s a double-whammy. We can’t see from the data, but it either means handlers are unable to load goods, or the cargo has diverted elsewhere.”
According to a Shanghai-based air freight forwarder, there were no problems with loading aircraft at the airport itself as major airlines continue to operate. The forwarder said, “The problem is that there is very little cargo delivered into PVG. And certainly, loads of cargo has been diverted to other airports.”
Subsequently, rates have fallen. “Rates are not strong due to many factories being under lockdown or a lack of inland trucking to enable cargo to be delivered. There is still some time to go before Shanghai is restored,” said the forwarder. “I would guess the middle of May, or perhaps early May, for a partial easing of lockdown restrictions,” the forwarder added.
TAC Index data shows rates from Shanghai to Europe had fallen -8.3% in the week to 18 April, while to North America they had dropped -8.2%.
Source: The Loadstar
Severe flooding last week at South Africa’s key port of Durban damaged infrastructure and disrupted port operations. Speaking to reporters at the port on April 19, Minister of Public Enterprises, Pravin Gordhan estimated that between 8,000 and 9,000 containers had accumulated and would be cleared within the next six days. Gordhan also said the port had moved from the emergency phase of the recovery process and was now “fully operational”.
Gordhan said due to the flooding, logs and other debris ended up in the harbour, which has disrupted shipping. He added that between 40 and 60 ships had been serviced – loaded and offloaded – in the port since Saturday. “That continues to improve with each day. Durban harbour is functional – ships bringing in imports are being serviced and ships taking out exports, food and fruit are being serviced,” he said.
Gordhan estimated that extensive damage to Transnet’s rail network to Cato Ridge along the North and South Coast lines would take from two to eight weeks to repair. He said the Transnet fuel line that transported fuel inland had been briefly impacted due to an electricity outage, however, it was operational within 24 hours and was currently working as normal. “As far as fuel and KZN [KwaZulu-Natal] is concerned, there is no risk of fuel shortages and the pipeline is functioning as well,” he said.
Source: Freight News
Truckload rates for U.S. spot market loads has cooled in the last three months. The market correction in trucking is currently limited to dry-van and temperature-controlled truckload, while demand and rates remain elevated for flatbed, less-than-truckload (LTL), and last-mile and parcel freight.
Donald Broughton, transportation analyst and principal of Broughton Capital, said there is not necessarily an imminent recession in trucking, but rather “delayed seasonality.” He said inventory restocking is catching up, leading to a more manageable, sustainable, freight flow rate.
Excluding fuel surcharges, linehaul spot rates fell sharply, but DAT Freight & Analytics principal analyst Dean Croke sees that drop as a correction from an over-heated, record-breaking spot market in 2021. “We’re returning somewhat to more normal seasonal patterns…But despite some fear that the sky is falling, spot rates are still relatively high compared to previous years, even though they’re negative year over year now,” Croke said.
There are no indicators of an imminent freight recession in ocean transportation, either. Ports on the U.S. East Coast warn vessels will anchor through the summer amid strong volume. Inland rail hubs such as Chicago are also struggling with a resurgence in international intermodal volume.
The softness in the truckload spot market hasn’t reached the LTL market either. “Our freight levels are still trending over 2021, though we may have seen a slight slowdown,” said Heather Dohrn, chief commercial officer of midwestern regional LTL carrier Dohrn Transfer. “We saw a lot of customers ramp up their inventory levels at the beginning of the year, and we’ve seen some freight levels dip because of that.”
Source: Journal of Commerce
