Sea freight market update: equipment and space shortages
Equipment shortages have been causing a lot of chaos around the globe. At the moment, the sea freight market is experiencing hardly any trade lane that is not impacted by blank sailings, port congestion, shortage of equipment, and roll overs.
Particularly the situation across Asia (e.g. the ports of Xiamen, Ningbo and Shanghai) is a major challenge, where high-cube containers are in especially short supply. This is caused by the low volumes of goods from Europe or the U.S. compared to previous years. In fact, the return of empty containers from the U.S. to China has grown in average by six to ten days.
As a result, the flow of containers is considerably imbalanced which forces some carriers to reposition equipment and to replace the widely used forty foot container by non-operating reefers, forty-five or twenty foot containers as leasing or buying new containers is not possible anymore. This shortage of equipment leads to vessels departing from Asian ports without being fully loaded.
Besides the trades between Asia and North Europe resp. North America, also Intra-Asia lanes are highly affected. Rates have strongly risen in the past days / weeks as carriers prioritize trade lanes with higher margins.
This global situation was caused by a large number of blank sailings earlier this year which triggered a domino effect in the market. Besides these effects, blank sailings are also caused by carriers installing scrubbers as a consequence of the introduction of the global sulfur regulations of the International Maritime Organization (IMO) in January this year. In the second quarter of 2020 these works were delayed by lockdowns which is why carriers are now eager to have them carried out.
Currently only twenty percent of the vessels are equipped with scrubbers. In consequence, the allegations that the carriers are keeping the space short in order to increase their margins and profits is not entirely correct.
It is expected that this challenging situation will persist all the way through the first quarter in 2021. For that reason, DACHSER recommends to provide accurate forecasts to secure equipment and space in time. For further questions get in contact with your local DACHSER Air & Sea Logistics sales contact.