The ‘perfect storm’ in the ocean freight market has worsened considerably over the past few months. The blockage of the Suez Canal in March further exacerbated congestion and delays on the trade lanes from Asia to North America and Europe. This incident also led to the re-emergence of blank sailings and port congestion.
In China, the ports of Yantian, Shekou and Nansha have been severely affected by a COVID outbreak in May, which led to reduced handling capacity at terminals when a six-day halt on containers entering Yantian was imposed. Carriers have announced severe disruptions to sailings and schedules, with carriers cancelling calls and omitting these ports up to the end of June. Shippers have sought alternative ports in Western Shenzhen and Hong Kong, however, the Pearl River area is now backed up with giant containerships anchored waiting for berths to open up. Maersk has advised that over 64 of their vessels have omitted the ports of Yantian, Shenzhen and Shekou.
Aside from ports in China facing challenges, Taiwanese ports were also affected when a large cargo ship hit an overhead crane in the port of Kaohsiung in early June. This caused the collapse of one crane and damage to another, along with many containers. There have been delays and congestion at Taiwanese ports while the cranes are being repaired.
Heading into peak season (July, August), when retailers are building their inventories for the holiday season, demand is continuing, supply is limited and carriers are full. All of this is leading to increasing rates and container shortages. Carriers are now pushing GRIs (General Rate Increases) every two weeks instead of monthly, as they have in the past. Carriers are only accepting bookings on Premium rates and in many cases, there is no space guarantee. Many carriers are prioritizing higher-paying cargo, overcommitting space, and cancelling bookings at the last minute.
For more information, contact Debbie McGuire, Manager – Freight Solutions.