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Lost liner capacity creating economic harm to smaller developing nations – Splash247

Research by UK transport economists MDS Transmodal (MDST), commissioned by the Global Shippers Forum (GSF), has found that global ports lost over a third of their expected capacity to ship containers during 2021, creating delays and disruption for shippers and economic harm to some smaller developing nations.

Lost capacity is a measure of the total number of containership slots that were expected to be available at the port but did not materialise because the port was skipped, or the entire service was blanked by the shipping line.

The ports of Colombo and Piraeus have been especially hard hit, with about 40% of the expected container capacity failing to arrive in the last quarter of 2021, in comparison with a pre-Covid level of between 15-20%. Felixstowe and Jebel Ali also failed to see around a third of their expected capacity.

In Asia Pacific, there were similar levels of capacity lost with Port Klang suffering a 40% shortfall and Melbourne and Tauranga down by around a third of the expected container capacity during the second half of 2021. In 2019, average no-shows at these ports amounted to between 10 and 15% of expected capacity.

“Looking at the data from 2019 Q1 onwards, we observe that carriers have been reducing the scheduled capacity offered to some ports but also reduced the level of capacity actually provided. These reductions have translated in deterioration of connectivity with some countries losing direct connections,” said Antonella Teodoro from MDST.

“[T]he collapse in service levels available to shippers at the ports affected, and in the hinterlands they serve over the period is stark,” a release from the GSF stated.

“Skipped port calls have multiple effects on shippers,” said James Hookham, a director at GSF. “They create local upward pressure on shipping rates, as shipping line agents auction-off available slots on the vessels that do call. Shippers also face unexpected surcharges for the handling and storage of delayed containers. More pernicious is the wider effect on national economies, especially those of developing nations that lose opportunity to deliver their exports, and hinder the recovery of their economy from the effects of lockdowns and Covid restrictions.”

The situation is unlikely to improve anytime soon. Denmark’s Sea-Intelligence, which has been tracking liner schedule reliability since 2011, reported earlier this month that global schedule reliability plummeted to new lows in January this year. Just 30.9% of all calls were on time in January, the lowest ever global schedule reliability number.

“Skipped ports and blanked sailings have evidently become central to the way shipping lines are managing the capacity of their heavily utilised fleets,” said GSF’s Hookham.

As the pressures caused by the Covid-19 pandemic ease the shippers body said it will be monitoring the restoration of service predictability for shippers closely.

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