With a wave of import containers expected to arrive following the reopening of Shanghai and peak season fast approaching, North Europe’s container ports are still critically congested, reports the Loadstar.
Empty containers and export boxes have built up as carriers blanked a third of their scheduled sailings in response to the lockdowns in China the past two months. Meanwhile, the ports have depleted much of the off-dock overflow capacity for the long-term storage of thousands of customs-blocked Russia-destined containers.
In a recent market update, Maersk advised that its networks were “under severe pressure”, which it blamed on “disrupted operations in European ports”. It said terminals at Rotterdam and Bremerhaven were currently “the most severely congested”, causing “extensive” berth waiting times and slow ship-working productivity.
An advisory from Hapag-Lloyd said yard occupancy at Hamburg’s Container Terminal Altenwerder (CTA) stood at 90%, “mainly caused by the discharge of import heavy vessels and reduced import pick up rates”. At its’ PSA Antwerp terminal, yard utilization was up to 90%. Hapag-Lloyd said yard density had “deteriorated” at Rotterdam World Gateway (RWG) to 95%, due to “increasing container dwell times and Russian cargo from various carriers”. Density levels had increased to 96% at ECT caused by “long dwell times of transhipment and import cargo blocking slots” Hapag-Lloyd said.
The severe congestion impacting the Benelux hubs has led to Antwerp stopping all barge operations until 30 June. Feeder operators are also suffering substantial berthing delays at the North European hubs with line vessels waiting four to five days on arrival at Rotterdam and Antwerp terminals, making scheduling impossible. “In the past we easily sent a ship Rotterdam-Dublin-Rotterdam in six days; we now need to plan on nine days. This means we need to deploy more vessels on butterfly loops to maintain a somewhat fixed-day service,” a feeder operator said.
Source: The Loadstar
Port congestion in the U.S. will worsen before improving some are warning. The presiding sentiment of ocean carriers, forwarders and other stakeholders is that relief will eventually arrive in the form of reduced orders from Asia as consumers curtail spending. Many industry experts indicate that with cargo flow currently getting worse, any relief will only appear late in the year, if not longer.
Import volumes from Asia were up 31% in the first four months of 2022 against the same period in 2019, data from IHS Markit shows. The sharp uptick in volumes has choked the supply chain, resulting in containers dwelling for longer on marine terminals and leading to idle ships, containers, and chassis which have also affected asset flow at both port and inland rail locations just as the traditional peak import season is set to begin.
One major ocean carrier stated strong concerns about the rapidly increasing amount of time it is taking for shippers to pick up import containers, whether at the port or rail ramp, and return them to the carrier. Over the past month the average number of days its containers are out on the street on a national basis has risen by more than 50% the carrier said.
Rail dwell times at Los Angeles–Long Beach have risen from about three days in December to over nine days in April, according to the Pacific Merchant Shipping Association. Last summer, Union Pacific Railroad suspended intermodal service off the West Coast because its inland terminals were full of containers and it was unable to handle any more arriving from the ports.
Data from IHS Markit shows that with less room to unload boxes, ships take longer to be worked and remain at berth for long on both the East and West coasts (see Figures 1 & 2).
Source: Journal of Commerce
Vessel schedule reliability struggled in April 2022, lowering to 34.4% according to Sea-Intelligence. The latest development comes following m/m improvements tracked in February and March. In April 2022, global schedule reliability declined by -1.3 percentage points m/m and -4.7 percentage points y/y. The data shows that the 2022 score has been slightly below the 2021 level in each of the first four months (see Figure 1).
The average delay for LATE vessel arrivals decreased once again, by -1.04 days to 6.41 days in April 2022 (see Figure 2). “This is the first time that the delay figure has dropped below the 7-day mark since August 2021. That said, it continues to be the highest across each month when compared historically,” Alan Murphy, CEO at Sea-Intelligence commented.
Maersk was the most reliable carrier in April 2022 with schedule reliability at 47.5%, followed by Hamburg Süd with 42.5%. Six carriers had schedule reliability between 30%-40% and a further six with schedule reliability between 20%-30%. Wan Hai Lines had the lowest schedule reliability at only 21.7% (see Figure 3). On y/y basis, only four of the top-14 carriers recorded an improvement in schedule reliability last month.
Vessel schedule reliability struggled in April 2022, lowering to 34.4% according to Sea-Intelligence. The latest development comes following m/m improvements tracked in February and March. In April 2022, global schedule reliability declined by -1.3 percentage points m/m and -4.7 percentage points y/y. The data shows that the 2022 score has been slightly below the 2021 level in each of the first four months (see Figure 1).
The average delay for LATE vessel arrivals decreased once again, by -1.04 days to 6.41 days in April 2022 (see Figure 2). “This is the first time that the delay figure has dropped below the 7-day mark since August 2021. That said, it continues to be the highest across each month when compared historically,” Alan Murphy, CEO at Sea-Intelligence commented.
Maersk was the most reliable carrier in April 2022 with schedule reliability at 47.5%, followed by Hamburg Süd with 42.5%. Six carriers had schedule reliability between 30%-40% and a further six with schedule reliability between 20%-30%. Wan Hai Lines had the lowest schedule reliability at only 21.7% (see Figure 3). On y/y basis, only four of the top-14 carriers recorded an improvement in schedule reliability last month.
Air cargo demand in May has continued to wane while rates have kept rising on major East-West trades compared to a year ago.
Average rates from Hong Kong to North America in May increased by 21.7% y/y and 1.2% m/m. From Hong Kong to Europe, average rates for May increased by 34.2% y/y and 5.7% on m/m, according to the Baltic Exchange Airfreight Index (BAI).
The closure of airspace due to the war between Ukraine and Russia similarly affected European operations. Carriers were forced to implement longer routes while Russian carriers, such as AirBridgeCargo and Atran ceased operating in the market. Additionally, jet fuel prices have also surged over recent months.
On the demand side, the latest data from CLIVE Data Services shows May volumes falling by -8% y/y. A surge in cargo is expected by many as Shanghai gradually re-opens to put pressure on shipping lines and in turn airlines.
Bruce Chan, senior analyst at Stifel said this could push up rates further in the months ahead. However, the TAC Index, which provides data for the BAI, indicates that carriers are ramping up capacity which could cool rates.
Source: Air Cargo News
Following an extensive two-year investigation of the container market and in particular skyrocketing rates on routes from Asia to the U.S. via either the Atlantic or Pacific Ocean, the Federal Maritime Commission (FMC), did not find evidence that container carriers violated competition regulation and taken advantage of an extraordinary market to secure higher freight rates.
Shipping analyst and CEO of Vespucci Maritime Lars Jensen said the report was not surprising. “The FMC doesn’t find any signs that carriers have misused their position in relation to freight rates. There is a clear acknowledgement [at the FMC] that the very high freight rates are due to market conditions, not lack of competition.”
U.S. exporters and importers have been protesting high freight rates and the container lines’ fee policy in relation to detention and demurrage, in which customers needed to hand-in or pick-up of containers at port terminals.
In a statement, FMC Commissioner Rebecca F. Dye said, “Our markets are competitive and the high ocean freight rates have been determined by unprecedented consumer demand, primarily in the United States, that overwhelmed the supply of vessel capacity.”
Access the FMC’s final fact finding report here.
Source: Shipping Watch
