Box shortages and port congestion now an 'industry-wide challenge' across Asia

Release date: 2021-04-22
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	Box shortages and port congestion now an 'industry-wide challenge' across Asia

Equipment shortages in Asia will get worse over the next two weeks, say carriers, impacting both deepsea and intra-Asia trades.

Maersk has told customers the strong cargo demand out of Asia Pacific would likely continue throughout the second-quarter, but…

“Schedule reliability is impacted by two main factors: recent delays from Europe via Suez Canal; and lower port productivity, especially on transpacific and European trade routes,” the company added.

As a result, the shortage of empty containers remains an “industry-wide challenge” across Asia, said Maersk, with this week and next seeing the “largest impact” because “empty containers coming back to Asia are delayed and import returns are lower”.

This will affect ports in China and also Busan, Korea, according to the shipping line. For example, while its stock of 20ft containers is ‘adequate’, its 40ft high-cube numbers won’t cover demand forecasts.

“Shanghai and Ningbo are majorly impacted as they provide the main bulk of supply to Europe,” explained Maersk. “Furthermore, with all these delays, coastal re-positioning might be impacted.

“From 3 May, the situation will be improving, and we expect empty container supply to normalise for the week of 10 May.”

The region’s equipment shortages and port congestion are flowing into intra-Asia trades, too. Last week, data from Project44 showed some 370,000 teu en route to Singapore, where, according to Maersk, there is a 1.5 day wait for vessels to berth.

Charlie Chu, executive vice president at Thai intra-Asia specialist Regional Container Lines (RCL), said port congestion was getting “much more serious” following the Ever Given incident, and “we estimate this may impact the whole supply chain for a couple more weeks at least”, he told The Loadstar.

“The main congestion is at Singapore and Port Klang. On top of this, some Chinese ports like Shanghai, Ningbo, Qingdao and Shekou are suffering with bad weather and ship bunching, which is also making the congestion more serious.”

Furthermore, he said, the slow turnaround of vessels and boxes from the US and Europe was also impacting the intra-Asia container supply.

“And some mainline operators have switched their ships from intra-Asia to the deepsea trades, which has squeezed out the capacity supply for the regional market,” Mr Chu added.

This has helped push freight rates back up to levels seen prior to Chinese New Year, he said, noting the market had been “soft” following the holiday.

Nevertheless, carriers continue to add new intra-Asia capacity. This month, RCL, with partner ONE, launched a loop between Pusan, Qingtao and Shanghai to Laem Chabang. And last week, MSC updated four intra-Asia services to offer “competitive transit times between China and South-east Asia, particularly from China to Vietnam and Thailand, and new direct connections between China and Malaysia”.

Grace Chia, commercial general manager of MSC’s regional office in Asia, said more companies were seeking to diversify supply chain risk, which was driving further growth for intra-Asia lanes.

“We are seeing an increased flow of components, raw materials and semi-finished goods being shipped between countries in Asia before the finished products are shipped out to other regions,” she said.

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