Ocean carriers 'boxed in' by 5m teu surplus equipment mountain
The return to ‘supply chain normalisation’ has led to the container liner industry being hobbled ...
Shippers in Asia face a double-whammy of equipment shortages and tight shipping capacity that is driving an unrelenting spike in short-term contract rates.
Vessels to North Europe and the US west coast are reportedly “fully booked for two to three weeks after Golden Week”, according to one Shanghai-based NVOCC source.
“Additionally, some of the carriers just do not have any 40ft high-cube containers at their depots, so even if we could get a booking, we can’t get hold of the boxes,” he said.
In its latest Container Availability Index (CAx) update, Container XChange reports container availability “dropping across Asian ports”, and doesn’t see the situation improving promptly.
“Strong demand in the US for e-commerce merchandise and medical supplies will last probably beyond this month,” said Xchange.
Jon Monroe, president of Jon Monroe Consulting and a representative of New Jersey’s Worldwide Logistics, said he “hoped vessels arriving in China were full of empty containers”.
He added: “Getting a container delivered to a factory to be loaded and returned to the terminal for movement to the US and Europe was a bit of a struggle this week, as everyone rushed to beat the cut-offs for their vessel departure date.”
In addition to ramping up empty container repositioning programmes, at the expense of backhaul loads, to mitigate the shortages, carriers have also tightened up on the time allowed to pick up equipment before export loading in China, and reduced the free time for restitution in Europe and the US.
Carriers have been relatively quiet on vessel utilisation levels in past weeks, but a press release from HMM confirms the strength of demand since early May when HMM Algeciras, the first of its newbuild 24,000 teu ULCVs, sailed from China to Europe with a full load of 19,621 teu.
Subsequently, HMM said, all 12 of the ULCV series, the biggest container vessels by capacity in the world, had departed from Asia on their maiden voyages, fully laden – a scenario that had seemed extremely unlikely at the start of the global pandemic in March.
Moreover, HMM added, the second voyages of HMM Algeciras and sister vessels Oslo and Copenhagen had also been full.
The delivery of the 12 ULCVs was perfect timing for the embattled South Korean carrier, which had suffered 21 consecutive quarters of negative results. The state-supported line managed to achieve its first quarterly net profit in over five years between April and June, of $23m.
The carrier said: “HMM has led an effort to stabilise the logistics flow by deploying extra tonnage to the market where a swift delivery of cargo is required and fully operating its entire fleet without idle container vessels in the face of the recent surge in cargo demand.”