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Terminals around the world brace as Shanghai exhales – Splash247

With Shanghai progressively reopening, gateway terminals in western consuming nations are bracing for a tsunami of boxes to hit already congested quaysides in June as the peak season gets underway earlier than normal this year.

State media in China this week claimed the port is back operating at 95%, while prime minister Li Keqiang stressed in an online meeting with 100,000 state employees a list of priorities including easier truck movement across provinces as he leads China’s economic fightback after a horrendous spring of lockdowns affecting a third of the nation.

Sea-Intelligence says that based on current vessel deployment, carriers stand to increase capacity on transpacific substantially starting from week 22, and by a relatively smaller margin on Asia-Europe, indicating an early start to the 2022 peak season.

Shippers have learned the hard way that it’s best to be prepared during the ongoing supply chain crunch – with added concerns about Shanghai’s long lockdown and the contract negotiations with dockworkers on the US west coast.

We’re not at this point able to verify an avalanche

Drewry estimates 260,000 teu of export cargo was not shipped from Shanghai in April alone, warning in a new report of further capacity challenges in the coming months coinciding with the peak summer season.

Data compiled for Splash by Danish liner analysis platform eeSea shows the boxships bound for North America and Europe (see maps below) with eeSea founder Simon Sundboell suggesting that for the moment the feared tsunami effect was not in evidence.

“We’re not seeing major disruptions. The vessels have continued to flow through the Chinese ports throughout the crisis , only slightly slower, and possibly – unverified – with lower volumes loaded – and so we’re not at this point able to verify an avalanche or any sort of whiplash effect,” Sundboell told Splash.

A joint research paper published last week by Windward and Sea-Intelligence looked at the congestion issue in Shanghai, the world’s largest container port, suggesting that when the port does fully reopen, it will be mainly for imports of full containers, many of which contain raw materials required for the starved factories in the hinterland to function. Export containers will consist of goods produced before or during the lockdown, but held up in export facilities at the factories, or elsewhere.

“There is no way of knowing how many containers are, or can already be, stuffed and ready to move, but it is safe to say that the amount is substantial,” the joint study suggested, adding that for export operations to run efficiently, Shanghai port must first be “drained” of many prepositioned empties, which will take time.

Shanghai is now bursting with such containers, and if not cleared or substantially reduced, there may be little room for export loading movements to occur as smoothly as they normally do,” the authors of the report warned, going on to discuss the so-called ketchup effect that will hit overseas destinations when Shanghai ramps up exports, something that will be all the larger as both US and European ports are already suffering from very high congestion levels – and in the case of the US, far lower productivity with the ports of Long Beach and Los Angeles faring dreadfully in a new global port productivity report issued by the World Bank this week.

According to HSBC the time it takes for a boxship to travel from China to the US is now 104 days versus pre-pandemic levels of under 50 days.

According to New York-based Ocean Audit, a total of 690,000 teu is destined from Asia to Long Beach and Los Angeles between May 25 and July 1, up from last year’s “extreme” 646,000 teu for the same period.

Maersk said this week that it foresees the ports of Los Angeles and Long Beach soon implementing the container dwell fee, announced in October and since delayed week after week, as the ports continue to tackle congestion and brace for the delayed Shanghai boxes. The company said in a rate announcement that the likelihood the fee will be implemented “has risen significantly this month”.

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