Current situation in the container shipping industry
7 July 2020
As an addition to the article we published in April, we would like to inform you about the current situation in the container shipping industry. It is an open secret that supply and demand have been unbalanced since the outbreak of the corona crisis. Currently, a large part of the total container fleet is out of action, and more challenges are presenting themselves. The integration of scrubbers and the arrival of various countries of origin that are coming out of lockdown is resulting in extra workload. With peak season on the horizon and the persistent shipping capacity shortages, booking your cargo early has become even more important.
Shipping capacity, scrubbers and extra workload
These are challenging times in the world of sea freight from the Far East. As a result of the corona crisis, all shipping companies took drastic measures and were forced to put their shipping capacity on hold, because this is cheaper than sailing with half-empty ships. That way, they also tried to sustain the rates which, despite the massive lack of cargo, they managed reasonably well.
The reopening of countries of origin that were in lockdown before, such as India, Pakistan and Bangladesh, is resulting in extra workload. In addition, the integration of scrubbers means many ships are currently out of action in shipyards.
Unfortunately, this does not concern just a handful of ships. A large part of the container fleet is currently out of action. This will unfortunately result in even more strain on the rates in the peak season than usual.
What can you do?
We have noticed that booking capacity is difficult. Shipping companies are simply fully booked quickly. If you can instruct your supplier to submit their booking early, this can be anticipated more rapidly. We recommend taking into account at least 14 days for a planned departure.
If there is no other option, because a specific shipment is urgent and there is no more room, it is still possible to ship it via the spot market. Of course, the corresponding rates are a lot higher than the given rates (differences up to several hundreds of dollars). As time goes by, these rates may increase even further. In these cases, we will always contact you to discuss the possibilities, and we will not book anything without your permission.
We want to be honest about this. Despite your and our investments, it is impossible to avoid blank sailings and roll-overs. The unforeseen situation we currently find ourselves in is, unfortunately, not at its end yet. Nevertheless, another challenging peak season is awaiting all of us. We are convinced that, with each other’s support, determination, mutual understanding and the quintessential Dutch go-getter attitude, we will be able to make the most of the current market!
If you have any questions or comments, feel free to contact us. We are happy to help you.
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