The congestion at Yantian Port has extended to surrounding ports, and due to a large number of ships canceling their berths at severely congested Yantian Port, it has brought a serious burden to surrounding ports - delays at Nansha Port and Shekou Port continue to increase.
Affected by congestion at Yantian Port, blank flights in the first half of June increased by 300%, and container freight continued to soar to unprecedented levels.
Project44 analysts said that between June 1 and 15, global container liners suspended 298 voyages, with a total capacity of more than 3 million TEU, which means that the number of suspended voyages increased by 300% within a month. Although not all empty traffic is caused by Yantian International Container Terminal, the impact is obvious.
Josh Brazil, vice president of marketing at project44, said: “While Yantian Port is the epicenter of this incident, these numbers spell trouble for the entire shipping industry, especially those companies that rely on these routes. Even those not directly affected by the situation in Yantian freight will also be affected as operators adjust their networks to avoid congestion."
Josh Brazil said that as of June 24, the number of blank sailings was still rising and would decline thereafter, depending on the port and the epidemic in southern China continuing to be controlled.
Maersk stated that as of June 21, the parking density in Nansha has reached 100%, and it is expected that ships at Nansha Port will continue to be delayed for 4-5 days in the next week. Nansha only accepts export containers loaded seven days before the ship's expected arrival time, and only if advance bookings are confirmed by the trucking company at the terminal. The supply of 40-foot containers in Yantian and Shekou remains tight, and Maersk advises customers to use 20-foot containers as an alternative.
Shekou Port, which includes Chiwan Container Terminal, Mawan Container Terminal and Shekou Container Terminal, has tightened regulations and will only accept locks fully loaded with export cargo within four days before a ship's expected arrival time.
Shekou Port (including Chiwan Container Terminal, Mawan Container Terminal, and Shekou Container Terminal) has tightened its regulations and only accepts export bookings within 4 days before the arrival of ships. As for Yantian itself, Maersk reported that the operating capacity of the eastern terminal area is about 54% of normal capacity and is gradually recovering, with the yard density dropping to 60%. Maersk predicts that flights to Yantian will be delayed for more than 4 days in the next week.
On June 21st, Maersk reported that the number of ships operated by Maersk and its partners that had cancelled docking with Yantian increased from 84 last week to 90. The containers loaded with imported goods on these ships are expected to be delayed for more than three weeks.
Project 44 warns that even if operations resume normal, it may take several weeks to handle the backlog of containers. The analyst said, "If the Chinese authorities extend their strict control measures, the double-digit daily blank navigation rate may continue until July, causing chaos in the supply chain of this globally important port until the summer."
At present, the consolidation market is facing various problems caused by cargo backlog, ship delays, port hopping, container and cabin shortages. According to analysis, once the port resumes normal operation, it is expected that there will be a surge in demand for goods exports in the next 2-5 weeks, as well as a chain reaction caused by the interruption of empty container allocation returning to South China. The subsequent impact of this event will last for more than six months.
Flexport CEO Ryan Petersen stated that there is currently no single solution to address the shipping delays that disrupt the global economy. Solving this global shipping delay may take some time, especially with the peak holiday season and Christmas approaching.
At the same time, ongoing congestion, capacity and equipment shortages are driving up container freight rates. On June 17th, Drury's World Container Composite Index rose 3.4%, or $231, to $6957.44/FEU. The price of Shanghai Rotterdam has increased by 6% compared to the previous week, reaching $11196 per TEU, a year-on-year increase of 534%. Drury predicts that rates will increase in the coming week due to the implementation of GRI, high production, and equipment shortages.
The congestion in South China has led to congestion surcharges imposed by shipping companies, and FAK and insurance premiums continue to rise. During the week ending June 18th, S&P Global Platts stated that the premium service fee for goods traveling from North Asia to the Pacific coast of the United States was $9000- $10000/FEU. The fare to the Atlantic coast of the United States (from transatlantic to eastern United States) is significantly higher than that across the Pacific, with all premium bookings exceeding $15000/FEU, but sources say the fare is close to $18000 to $20000/FEU. A North American shipper stated that "premiums are approaching the FAK rates for March and April." The flow of inland containers at destination ports is slow, with an increase in empty flights and further increases in freight rates. Even premium services cannot guarantee cabin space. Suggest booking four weeks in advance.
Asia US (Trans Pacific route): North America West/East Coast cabin availability is tight; Due to multiple factors such as port congestion, delayed shipping schedules, imbalanced transportation capacity, and inland transportation delays, as well as the sustained strong demand for imports in the Americas, several shipping companies have announced the increase and collection of GRI and PSS starting from July; Further increase in freight rates in July has become inevitable. It should be noted that due to port congestion, the transportation capacity is in short supply, and the pressure of empty container rotation increases; Shipping companies are limited to receiving goods from inland points.
Asia Europe route: Strong demand in the European and Mediterranean markets, very tight cabin availability, steady increase in SCFI index on the European route, with freight rates reaching historic highs; Due to the epidemic prevention and control measures in South China, the dock has tightened its operating procedures and operated slowly; Ships are gradually canceling their docking at Yantian Port, and some goods are choosing to sail north from East China. The shortage of containers in the East China market will further intensify in the coming weeks. Freight rates will continue to rise.
This article is sourced from Ocean Shipping Network