Global port congestion will continue going into Q2, container shipping analysts tell shippers. Asia-based Linerlytica reports escalating port congestion at North America, with ports on both the East and West coasts recording new highs (see Figure 1). The company calculates that 10% of the global containership fleet, the equivalent of 2.53m TEU, is presently tied up by port congestion.
According to Sea-Intelligence’s latest report, a change in the number of deployed vessels will be an element that will feed into congestion issues. The outlooks shows a temporary drop for Chinese New Year 2022, followed by a very sharp upwards correction in March/April 2022 (see Figure 2).
Global port congestion will continue going into Q2, container shipping analysts tell shippers. Asia-based Linerlytica reports escalating port congestion at North America, with ports on both the East and West coasts recording new highs (see Figure 1). The company calculates that 10% of the global containership fleet, the equivalent of 2.53m TEU, is presently tied up by port congestion.
Alphaliner analysts said vessel delays remain a significant problem in the Asia – North Europe and China – California trades with no improvement since its latest trade surveys published last November. Despite a decline in the overall number of vessels waiting for a berth at Los Angeles/Long Beach from 109 units to 76 ships, the fronthaul transit time for ships sailing from Asia to these twin ports has increased to an average of 38 days, up from the 28 days recorded in mid-November (see Figure 3).
Vessel delays on a full Far East-North Europe round voyage are also unchanged from early November. The 14,000 – 24,000 TEU ships on this route still require on average 17 days more than their pro forma schedules to reach Central China for their next Westbound trip (see Figure 4).
Vessel delays on a full Far East-North Europe round voyage are also unchanged from early November. The 14,000 – 24,000 TEU ships on this route still require on average 17 days more than their pro forma schedules to reach Central China for their next Westbound trip (see Figure 4).
Source: splash247.com
Deteriorating on-time performance of deep-sea vessels has resulted in longer wait times for feeder and short-sea vessels. Not only has it slowed down the turnaround of ships and equipment, bottlenecks are spreading to smaller ports in the regional network. The ongoing challenges has feeder carriers facing “operational chaos”. Martin Gaard Christiansen, CCO of global feeders and CEO of Europe for intra-Europe specialist carrier Unifeeder, said 20% more feeder capacity needs to be deployed to maintain existing services.
In 2021, 25% of vessels on Asia-North Europe sailings had late arrivals. Schedule reliability in December was at 22.9%, falling -17.7% from 40.6% in December 2020. The average delay for late vessels in December increased by 2.63 days to 9.02 days, compared to 6.39 days a year earlier, reports Sea-Intelligence. Delays at both origin and destination ports on the Asia-North Europe tradelane saw schedule reliability plummet to 24.4% in 2021 compared to 68% in 2020.
To restore schedule reliability, carriers have omitted ports and limited port rotations on Asia-North Europe trade, causing immense disruption for the onward transportation of containers, even as larger ships are deployed. The increase in ship sizes is adding stress on terminals. Christiansen said that alongside vessel delays and pandemic-related labor shortages, the increased volumes being exchanged in port calls were proving increasingly costly and disruptive to feeder and short-sea operations.
Source: Journal of Commerce
The World Trade Organization’s (WTO) chief economist said last week that global trade bottlenecks are the result of a surge in demand rather than a supply chain disruption. The expectation is for pressure to ease in the coming months.
The WTO had believed demand for goods would slow in early 2022 but the Omicron variant led to restricted activity. Subsequently, consumers continued to skew their spending on goods rather than services. WTO chief economist Robert Koopman said the excessive demand on goods is the likely explanation for two-thirds to three-quarters of shortages “It still remains that this compositional shift in demand supported by the appropriately aggressive, quick fiscal and monetary policies, has resulted in this outcome where lots of people write about supply-chain disruptions,” he said.
The supply chain turmoil was more obvious in the automotive sector, or to shippers who adapted production shifts from China to Vietnam, Malaysia or Indonesia. Koopman said key U.S. indicators such as the back-ups of ships at ports had improved and throughput at U.S. ports had picked up. “I’m pretty confident that in the next three or four months we’re going to see the inflationary pressures being reduced,” he said, referring to most traded goods and assuming no new geopolitical or health shock.
Nonetheless, some companies have warned that trade channels have become so congested that it could be next year before business normalizes.
Source: Reuters
