In recent times, due to factors such as typhoons, epidemics, and shortage of terminal labor, congestion at major container ports in China and the United States has become increasingly serious, and the number of container ships waiting to be berthed outside the ports continues to set new records.
Shanghai and Ningbo have become the new “kings of congestion”
The latest data from ship consultancy Vessel Value shows that there are a total of 427 container ships queued at global ports, with the supply chain crisis having worsened by 14% since the beginning of September. The company said there were no signs of improvement as more ships were heading to the port.
Previously everyone thought that the Long Beach area of Los Angeles in the United States was the world’s largest blockade.
Now, the latest data shows that the number of container ships waiting to berth in Ningbo and Shanghai is twice as many as that of ports in the US West, reaching 154 ships! The Los Angeles and Long Beach areas, which have far exceeded the 73 berthed container ships, have become the new “king of congestion” in the global shipping industry…
The number of container ships anchored near Shanghai and Ningbo has surged in recent weeks. Among them, there are 74 ships waiting to berth outside Ningbo and Zhoushan, equivalent to 306,538 teu, an increase of 48% in just one week. Currently, China has 242 container ships waiting for berths.
Whether it is due to the huge export volume, Typhoon “Sandu”, or the impact of the epidemic, the increasing congestion at China’s ports will become another unknown for trans-Pacific trade. Card.
Congestion at Chinese ports has slowed export volumes, which is not a good thing for U.S. importers, but it can temporarily relieve pressure on the ports of Los Angeles and Long Beach.
In June this year, after the business volume of Yantian Port in China was severely reduced due to the outbreak of the epidemic, the number of ships berthed in San Pedro Bay, California, temporarily decreased. After a temporary relief of congestion, a large number of delayed goods soon appeared.
Two major factors causing congestion on both sides of the Pacific
A major driver of congestion on both sides of the Pacific is limited land transport capacity (terminals, trucks, rail, warehousing) but highly flexible maritime vessel capacity.
Although the number of ships worldwide is limited, operators can move ships to where they are most profitable. The trans-Pacific route has become the most popular route at the moment, with spot freight rates including insurance premiums reaching US$20,000/FEU.
As ship operators pile up more capacity across the Pacific, congestion intensifies, delays increase, shippers’ incentives to pay premiums are bolstered and freight rates are at historically high levels.
According to eeSea data, the number of Far East-West Coast routes has surged from 48 in January to 67 this month. In comparison, the number of services on this route remained fairly stable last year at 42-46.
In addition, container ships from other routes have also been deployed to serve as “temporary workers” (ships performing one-time voyages). In some cases, multiple “temporary” ships will also make multiple round trips.
Another reason why transpacific traffic congestion is increasing – not only are there more ships, but they are also getting smaller, which means more ships are needed to transport them Same freight volume.
According to eeSea data, the average capacity of ships serving the Asia-West Coast route was 8,601 TEU in January and is currently 7,125 TEU, a decrease of 17%.
American Shipper recently analyzed the average capacity of ships currently berthed or drifting away from Southern California, compared with the peak berthing period in the first quarter on February 1 , found a similar drop: average vessel capacity dropped from 8,060 teu to 6,184 teu, a decrease of 24%.
Some operators have increased capacity on transpacific routes by purchasing ships in the second-hand market or leasing ships in the charter market. Most of the boats available for purchase or lease in 2021 are smaller sized boats. And smaller average ship sizes will certainly slow things down further.
What is the future direction of route services?
Ship operators can put as many ships as possible in the transpacific region to chase record spot rates, leaving shortages on other routes, but ultimately this lack of The balance should correct itself.
When the anchorages near Los Angeles/Long Beach filled up in the first quarter, carriers were unable to get enough ships back to Asia in time to load cargo, so they had to “blank” sailings (with a large number of sailings canceled), thereby reducing congestion in the second quarter.
Given the extreme anchorage conditions near China and Southern California, it seems likely that there will be another blank sailing situation in the fourth quarter, which is a worrying prospect for U.S. importers.
Even companies like eeSea that track blank sailings can’t say how the fourth quarter will pan out.
In the first half of 2020,When carriers are flying empty due to a drop in demand caused by the pandemic, they announce sailing cancellations months in advance, providing an important signal to the market. This year, there is much less notice, as the blank sailings are caused by congestion rather than a drop in forward demand. </p
