The congestion at the Yantian port has extended to neighboring ports, which have been heavily burdened by the cancellation of a large number of ships calling at the heavily congested Yantian port - delays at Nansha and Shekou continued to increase.
Due to congestion at Yantian port, empty flights rose 300% in the first half of June, and container shipments continued to soar to unprecedented levels.
According to project44 analysts, 298 global container liner trips with a total capacity of more than 3 million TEU were halted between June 1 and 15, representing a 300% increase in the number of trips stopped in a single month. While not all of the air traffic is due to Shioda International Container Terminal, its impact is clear.
Josh Brazil, project44's vice president of marketing, said: "While Yantian Port was the epicentre of this incident, these numbers spell trouble for the entire shipping industry, especially those that rely on these routes. Even freight that is not directly affected by the situation in Yantian will be implicated as operators adjust their networks to avoid its congestion."
As of June 24, the number of empty voyages was still rising, and will decline after that, depending on how the epidemic continues to be contained at the port and in southern China, Josh Brazil said.
Maersk said that as of June 21, the density of caryards in Nansha had reached 100 percent, and it expected ships at Nansha port to continue to be delayed for another 4-5 days in the coming week. Nansha will only accept export containers loaded seven days before a ship's expected arrival time, and only if the trucking company has confirmed advance bookings at the terminal. Supplies of 40-foot containers at Yantian and Shekou remain tight, with Maersk advising 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 rules to accept only locks with full export cargo four days before a ship's expected arrival time.
Shekou Port, which includes Chiwan Container Terminal, Mawan Container Terminal and Shekou Container Terminal, has tightened its rules to accept export bookings only within four days of a ship's arrival. For Yantan itself, Maersk reports that Terminal East is operating at about 54 per cent of normal capacity and is gradually recovering, with yard density down to 60 per cent. Maersk expects flights in Yantian 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 been canceled 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 warns that even when operations return to normal, it could take weeks to clear the backlog of containers. "If the Chinese authorities extend their strict controls, the daily double-digit empty traffic rate could extend into July, throwing the supply chain at the world's key port into chaos well into the summer," the analyst said.
At present, the freight market is facing a variety of problems caused by cargo backlog, ship delay, port hopping, container and space shortage. Once the port resumes normal operation, it is expected that there will be a surge in export demand in the next two to five weeks, as well as a chain reaction due to the interruption of empty container allocation back to South China, and the subsequent impact of this incident will last for more than half a year.
Ryan Petersen, CEO of Flexport, said there is no single solution to the shipping delays roiling the global economy. Resolving the global shipping delay "may take some time," especially with the holiday season and Christmas approaching.
At the same time, persistent congestion, capacity and equipment shortages are pushing container rates ever higher. Drury's World Container Composite Index rose 3.4%, or $231, to $6,957.44 /FEU on June 17. Shanghai-rotterdam prices rose 6 percent from the previous week to $11,196 per TEU, up 534 percent year on year. Drury expects rates to rise in the coming week due to GRI implementation, high output and equipment shortages.
Congestion in southern China has led to congestion surcharges imposed by shipping companies, FAK and premiums all continuing to rise. In the week ended June 18, S&P Global Platts said premium service charges for shipments from North Asia to the U.S. Pacific coast were $9,000 - $10,000 per FEU. Shipping rates to the US Atlantic coast (transatlantic to the US East) are significantly higher than those across the Pacific, with all premium bookings costing more than $15,000 /FEU, but sources say the rates are closer to $18,000 to $20,000 /FEU. "Premiums are approaching FAK rates in March and April," said one North American shipper. The inland container flow at the destination port is slow, the empty class increases, the freight rate rises further, even if the premium service can not guarantee the shipping space. We recommend booking four weeks in advance.
Asia - USA (Trans-Pacific) : North America West/East Coast shipping space tension; Due to a combination of port congestion, schedule delays, capacity imbalances, inland traffic delays, and continued strong demand for imports from the Americas, several shipping companies announced increased GRI and PSS starting in July. A further rise in freight rates in July is certain. Need to pay attention to: because of port congestion, capacity in short supply, empty container rotary pressure increases; The shipping company is limited to cargo at inland points.
Asia-europe route: Europe and Mediterranean market demand is strong, the capacity is very tight, SCFI index European line rose steadily, freight rates 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 operations have been slow. Ships have cancelled the docking at Yantian port, and some cargoes have been shipped north from East China. In the coming weeks, the shortage of containers in the East China market will be further aggravated. Freight rates will continue to rise.