The congestion at Yantian port has extended to neighboring ports, which have been severely burdened by a large number of ships cancelling calls to the severely congested Yantian port -- delays at Nansha and Shekou ports have continued to increase.
Affected by congestion at Yantian port, empty flights jumped 300 percent in the first half of June, and container freight continues to soar to unprecedented levels.
Between June 1 and 15, 298 global container liners were grounded, with a total capacity of more than 3m TEus, representing a 300 per cent increase in the number of outages in a single month, according to analysts at project44. While not all of the traffic is caused by the Shiota International Container Terminal, the impact is clear.
Josh Brazil, vice president of marketing at project44, said, "While Yantian Port is the epicenter of this accident, these numbers spell trouble for the entire shipping industry, especially for the companies that rely on these routes. Even freight that is not directly affected by the Yantian situation will be affected as operators adjust their networks to avoid congestion."
Josh Brazil says the number of empty sailings is still rising as of June 24, and will decline thereafter, depending on the port and southern China's continued containment of the disease.
Maersk said that as of June 21, Nansha yard density had reached 100 per cent, and ships at Nansha Port were expected to continue to be delayed for four to five days in the coming week. Nansha will only accept export containers loaded seven days before the ship's estimated arrival time, and only after confirming at the terminal that trucking companies have booked them in advance. Supplies of 40-foot containers remain tight at Yantian and Shekou, and Maersk is advising customers to use 20-foot containers as an alternative.
Shekou ports, including Chiwan Container Terminal, Mawan Container Terminal and Shekou Container Terminal, have tightened regulations to only accept locks loaded with export cargo up to four days before ships' expected arrival time.
Shekou ports, which include Chiwan, Mawan and Shekou container terminals, have tightened rules to accept export bookings only four days before a ship's arrival. For the salt pans themselves, Maersk reported that Terminal East was operating at about 54 per cent of normal capacity and was gradually recovering, with yard density down to 60 per cent. Maersk expects Yantian flights to be "delayed by more than four days" in the coming week.
On June 21, Maersk reported that the number of ships operated by Maersk and its partners that had cancelled their calls to Yantian had increased to 90 from 84 the previous week. Containers carrying imported goods on the ships are expected to be delayed by more than three weeks.
Project44 warned that even when operations return to normal, it could take weeks to work through the backlog of containers. "If the Chinese authorities extend their strict controls, the daily double-digit blank sailing rate could extend into July, throwing the supply chain of the world's important port into disarray until the summer," the analyst said.
At present, the bulk shipping market is facing various problems caused by overstocking of cargo, ship delay, port hopping, container and space shortage. Analysts say that once the port resumes normal operation, it is expected that there will be a surge in cargo export demand in the next two to five weeks, as well as a chain reaction caused by the suspension of the deployment of empty containers returning to South China. The subsequent impact of the incident will last for more than six months.
Flexport CEO Ryan Petersen said there is no single solution to the shipping delays that are disrupting the global economy. Resolving the global shipping delays "may take some time," especially with the holiday season and Christmas approaching.
At the same time, persistent congestion, capacity and equipment shortages are pushing up container rates. Drury's World Container Composite Index rose 3.4 percent, or $231, to $6,957.44 per FEU on June 17. The Shanghai-Rotterdam price rose 6 percent from the previous week to $11,196 per TEUS, an increase of 534 percent year-on-year. Drury expects rates to rise in the coming week due to GRI implementation, high production and equipment shortages.
Congestion in southern China has led to congestion surcharges, FAKs and premiums imposed by shipping companies all continuing to rise. In the week to June 18, S&P Global Platts said premium service charges for shipments from North Asia to the US Pacific coast were $9,000 - $10,000 per FEU. Shipping to the Atlantic coast of the United States (transatlantic to eastern United States) is significantly more expensive than the trans-Pacific, with all premium bookings costing more than $15,000 per FEU, but sources say rates are closer to $18,000 to $20,000 per FEU. "Premiums are approaching FAK rates for March and April," said one North American shipper. The inland container flow at the destination port is slow, the empty flights increase, and the freight rate rises further. Even the premium service cannot guarantee the shipping space. Four weeks in advance is recommended.
Asia-america (Trans-Pacific route) : Tight seating on West/East Coast of North America; Due to port congestion, shipping delays, capacity imbalances, inland transport delays and continued strong demand for imports in the Americas, a number of shipping companies have announced increases and levies in July. A further rise in rates in July is inevitable. It should be noted that: due to port congestion, shipping capacity exceeds supply, and the rotary pressure of empty tanks increases; Shipping company limited cargo to inland points.
Asia-europe route: Europe, Mediterranean market demand is strong, space is very tight, SCFI index European line rose steadily, freight rate reached a record high; Due to the epidemic prevention and control measures in South China, the operation process of the terminal has been tightened and the operation has been slow. Ships have cancelled their connection to Yantian wharf one after another, and some cargo has chosen to be shipped north from East China. In the coming weeks, the shortage of containers in East China market will further worsen. Rates will continue to rise.
This article is from Shipping Network