Causes and effects of the overstrained container market
18 June 2021
We are facing great challenges together. Never before has the container market been so overstrained. An accumulation of events is worsening the situation and results in us having to negotiate individual bookings more and more often. It almost seems as if we are at an auction, with the highest bidders winning the containers and the space.
Gigantic impact of problems in Yantian
To give you an idea: the impact of the problems in Yantian on container shipping has now surpassed the Suez Canal blockage back in March. The Suez Canal was blocked for 6 days. Yantian has been operating at only 30% capacity for several weeks now. At 100% capacity, the port of Yantian processes a container volume of around 36,500 a day. The backlog is enormous and is only rising. Unfortunately, the backlogs continue to grow and have not yet been eliminated. The COVID outbreak appears to be under control with no new cases reported. However, all ports in the region (Yantian, Nansha, Shekou, Chiwan) remain overloaded, so that containers cannot be removed quickly for the time being. Therefore, we still ask you to take significant delays into account.
Tariff levels keep going up
We expected the peak to be in sight when a 40ft container stood at $10,000, but the opposite is true. Local shippers in China have been offering at least $15,000 to $19,000 per 40ft this week. We can no longer predict where this is going or when it will end.
Unreliable sailing schedules
Beyond the ridiculous tariff levels, the reliability of the sailing schedules has now plummeted to almost zero. There is a reasonable explanation for this, more or less: the global pandemic means every port is battling with congestion. This means it might take 5-7 days for a ship to be unloaded and loaded. As a result, sailing schedules are completely disrupted and capacity is down, and ships are taking much longer to dock at every port, resulting in fewer sailings.
We urgently recommend you take into account 20 days of extra transit time from direct ports of call (China mainports). For shipments from feeder ports in countries such as Bangladesh, Indonesia, Vietnam and Thailand, it would be prudent to expect even longer delays. This is because these ports are mainly used via transshipment ports such as Singapore, Tanjung Pelepas and Colombo, where overcrowded ships from China dock to collect these containers.
Do you have any questions after reading this message? Please contact us.
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