37.8% of Containerized Capacity Caught at Global Ports

Global port congestion has reached a record high with 37.8% of container fleet capacity at port, according to the July 14 containership port congestion index by Clarksons. This exceeds the previous peak level recorded in late October 2021, and stands well above the pre-COVID average of 31.5% recorded between 2016 and 2019.

Sea-intelligence warned of the challenges stemming from ‘non-ocean bottlenecks which are big drivers of supply and demand’. The report listed the 70,000 truckers who have just gone on strike in California and the tens of thousands of containers clogging the U.S. West Coast ports waiting for rail to destinations, because there are not enough engineers. There are nearly 30,000 rail containers delayed on the port of Los Angeles docks alone, with rail-bound cargo sitting for an average of 7.5 days. Congestion is also reaching record levels on the U.S. East coast.

In Europe, Hamburg and Bremerhaven are “paralyzed” by port worker strikes, Sea-Intelligence stated. MarineTraffic data shows there are nearly 200,000 TEU waiting for berths to open up in Hamburg. There are news reports of three rail strikes planned across the UK over the coming month.

In Asia, monsoon and typhoon season is back and lockdowns in China are ongoing.

The approximate total value of trade stuck on the water is estimated at $30bn according to data from MDS Transmodal.

Source: splash247.com

Unequal roll out of Asia-North Europe Blank Sailings

Sea-Intelligence said not every service received the same treatment when it came to blank sailings on Asia-North Europe. The Danish analysts introduced a measure called ATBBS (average time between blank sailings) to analyze how vulnerable a service is to blank sailings. The measure is basically the average number of weeks between a blank sailing on each respective service.

Looking at the 2M Alliance service, for example, AE5/Albatross and AE10/Silk were blanked once every 22-24 weeks (9-13 weeks in the last 12 months), whereas the AE55/Griffin and AE6/Lion were blanked every 7-8 weeks (5-6 weeks in the last 12 months). Similarly for the Ocean Alliance, AEU2 and AEU6 were hardly blanked in the last 12 months, while AEU7, AEU9, and AEU1 were blanked every 5-7 weeks in the same time period. There was very little to choose from across THE Alliance services, as they were all blanked quite frequently, while there were similar patterns across Asia-Mediterranean as well.

"While the general understanding might be that blank sailings are made across the board, the reality is that carriers favor certain services, either by virtue of choice and the value of cargo on board certain routes, by virtue of the ports that they call, or any other external factor," commented CEO of Sea-Intelligence, Alan Murphy. He adds that knowing which services are more likely to be blanked can guide shippers to limit exposure to additional disruption to their supply chain.

“Blank sailings have been traditionally used as a tactical tool to manage supply to bring it down in line with demand,” Murphy said.

Source: Sea-Intelligence

No Container Shortages in Asia (Yet) Despite Destination Backlogs

A softening of demand combined with record production of new containers last year has forestalled a container shortage. Despite the significant number of containers held up in North America and Europe, ocean carriers, importers and forwarders said that shippers are not facing difficulties obtaining container equipment in China and other points of origin in Asia.

According to maritime consultancy Drewry, the global pool of ocean shipping containers grew 13% last year to almost 50 million TEU. As many as 6 million TEU of surplus containers exist in the global equipment pool. Container orders surged following shortages that emerged in post-lockdown spending. Triton, the largest container lessor said new container production exceeded 5 million TEU last year, more than double the number produced in 2019 or 2020.

The availability of containers at origin comes as conditions in North America are worsening. The crimp in normal circulatory flow of equipment in North America is so severe that one ocean carrier said it was unable to dispatch a ship from Los Angeles-Long Beach back to Asia because of a shortage of empty containers with which to fully load the ship for seaworthiness. Another carrier confirmed issues with in-gating empty containers onto marine terminals.

Potential containers shortages could emerge in Asia if the backups continue in North America. One ocean carrier executive said a container shortage at origin “could be the next issue to emerge,” due to inconsistencies among carriers in returning empty equipment to Asia and contracting for new equipment.

Source: Journal of Commerce

June Imports Grow 5.9% at Top 10 U.S. Ports

Imports to the top 10 U.S. ports grew by 5.9% year-on-year (y/y) to 2.16 million twenty-foot equivalent units (TEUs) in June despite recessionary concerns, according to The McCown Report. The growth has exceeded the 3% y/y gain in May and 5.1% gain in April.

Imports to the top East/Gulf Coast ports rose 9.7% y/y in June, driven by double-digit surges in New York/New Jersey, Houston and Savannah, Georgia. Imports to West Coast ports rose 2.3%. Compared to June 2019, pre-COVID, import volumes to the top 10 U.S. ports were up 26.9% last month, said McCown. East/Gulf Coast ports were up 40.3%, West Coast ports 15.8%.

The number of ships at anchor off U.S. container ports is still increasing. Data from MarineTraffic and the latest queuing lists point to 140 container vessels waiting offshore of North American ports. 37% were waiting off West Coast ports and 63% were off the East and Gulf Coast ports. There are large queues off Savannah, New York/New Jersey and Houston.

According to McCown, “The port congestion situation has morphed from primarily impacting the West Coast to … all coastal ranges.” McCown said congestion at U.S. ports was not due to failure in getting containers off the vessels but the inability to get boxes out of the terminal. This has been been compounded by slowdowns in on-dock rail service out of Los Angeles/Long Beach and more recently by truckers opposed to California’s independent contractor law, AB5.

Source : American Shipper

U.S. Trucker Protests Shut Down Port of Oakland Terminals

U.S. trucker protests that started July 18 at the Port of Oakland have completely shut the Oakland International Container Terminal (OICT), which handles about 70% of the port’s containerized cargo. Vessels were backing up at anchor off the Port of Oakland Thursday and gate operations ground to a virtual halt as longshore workers continued to refuse to cross picket lines set up by truck drivers protesting the implementation of AB5 for a fourth day.

Truckers are protesting the implementation of AB5, which was upheld in late June by the U.S. Supreme Court, because it ends the independent contractor model in California. That means truckers cannot operate as contractors but rather must become direct employees of trucking companies, which limits their independence in how they operate.

Oakland’s marine terminal employers are unable to request that a waterfront arbitrator rule whether the actions by dockworkers constitute an illegal secondary strike because the coastwide contract between the ILWU and the Pacific Maritime Association (PMA) expired on July 1, meaning the broad “no strike” clause contained in the prior deal is null and void.

Source: Journal of Commerce

Australia, New Zealand Ocean Spot Rates Fall as Demand Softens

Long-term freight rates to Australia and New Zealand have reached “new highs”, but spot rates are down. The average rate for long-term contracts on the Far East-Australia/New Zealand corridor are 375% higher than what was being paid in July 2019 and more than double compared to July 2021, according to Xeneta.

Containerized imports dropped in both countries during the first five months of the year as consumers shifted spending to travel and entertainment. Australia’s volumes were down -7.6% and New Zealand’s by -13.5%, reports Xeneta.

An Australian forwarder said a sluggish peak season is expected due to high inventories while inflationary pressures have importers returning to ‘just-in-time’ shipping. Meanwhile, shipping lines have been propping up rates with blank sailings as demand softens.

Spot rates have been falling in recent months another forwarder said. “What we have seen since the beginning of the year, is a steady decline from peak freight rates largely in line with the SCFI [Shanghai Containerized Freight Index]. The current market rates, heading into August, are actually anywhere from 20% to 30% less than what they were the same time last year.”

Source: The Loadstar

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