101 ports are blocked, and liner congestion spreads across the world!

Global liner container transportation has been out of balance, with port congestion, container supply mismatches, and freight rates hitting records repeatedly.

Data from Seaexplorer, a container shipping platform created by Kuehne+Nagel, shows that 101 ports around the world have reported disruptions such as congestion. According to a report from Dexun’s digital department, the number of vessels waiting in line for berths reached 350 at one time, and then fell to 304.

Port congestion is becoming a global problem

This year, first of all, there was a long queue of container ships in the two ports of Los Angeles and Long Beach in the United States. In the case of port congestion, as many as 40 container ships were waiting for berths in early February.

In late March, the "Ever Given" carrying 20124 containers stranded on the Suez Canal for nearly a week, causing delays for hundreds of ships travelling to and from Asia and Europe.

During the period, some ports in some countries may be shut down due to the epidemic or strikes, which put more pressure on the already congested routes and ports.

Recently, affected by the covid-19 epidemic, my country's southeast ports such as Yantian Port have been forced to join the ranks.

In recent weeks, shipping congestion seen in important export regions has spread to other important hubs and continues.

The number of container ships waiting for berth in Singapore has increased by 37.5% in the past week. It is reported that many shipping companies, including COSCO SHIPPING and CMA CGM, have decided to skip Singapore Port and not call in order to make up for the delay in Yantian Port. There has been a queue of ships in Asian internal ports such as Laem Chabang.

Ports on the east coast of the United States have also encountered various disruptions.

Also to curb the development of the epidemic, Malaysia has been completely blocked from June 1-14. Although port cargo operations are allowed, furniture factories are prohibited from operating, and more than 2,000 containers of export goods in the furniture industry are forced to be stranded.

South Korean ports are also facing a large cargo backlog. In Busan Port, which accounts for more than 70% of the container throughput in South Korea, a large number of containers are stacked one after another, leaving only narrow passages to allow vehicles to pass through.

Maersk, the world's largest container shipping company, discussed the tense nature of global supply chains in an earlier article and warned that this has become the new normal. "The trend is worrying, and constant congestion is becoming a global problem," Maersk said.

The influence of Yantian Port continues

At the end of May, due to the impact of the epidemic, Yantian Port closed some operations, and the blank voyage data of Shenzhen's main ports (including Yantian) surged.

It is reported that from June 1st to 15th, 298 container ships with a total capacity of more than 3 million teu crossed Shenzhen, and the number of blank flights increased by 300% within one month. The number of export containers has caused a serious backlog.

In the past two weeks, the 7-day average residence time of export containers at Yantian Wharf doubled, reaching 23.06 days on June 15; the average residence time of imported containers was lower at 5.96 days. During the same period, shipping companies were avoiding ports.

According to Refinitiv's ship tracking data, as of June 17, more than 50 container ships were forced to stop at sea outside Yantian Port and were unable to enter the port for unloading.

After many routes were cancelled, lack of containers has also become a major problem for South China ports. China's export container freight rates have soared, and their prices far exceed the return freight rates.

Australian transporter Neolin once warned, “The decline in port production efficiency may cause serious empty container challenges. Shippers who have important orders and plan to export by sea in southern China’s ports in the next two weeks should prepare a response plan or move to nearby areas. Port, or have to consider air transport."

According to the latest data from ContainerxChange, a German container rental trading platform, Yantian Port, Shekou Port and Nanshan Port are facing the most serious shortage of containers. Over the past five weeks, the import of empty containers at Yantian Port has decreased by 19%, while Nanshan Port and Shekou Port have decreased by 16% and 30% respectively.

Jon Monroe, founder of Jon Monroe Consulting, a Washington consulting firm, said that the port congestion effect of Yantian Port and the impact on other alternative ports have had more impact on trade than the Suez Canal blockage.

"As of now, the number of berths in production in the Yantian Port Area has reached 9, and 8,000 export heavy containers of ETA-7 are received daily, and the daily throughput is nearly 24,000 TEUs. The overall operating capacity of the port area’s terminals has recovered 70%... On the premise of good epidemic prevention and control, Yantian Port is expected to basically resume production levels by the end of June."

my country's epidemic prevention and control efficiency has been quite high. However, considering that Yantian Port is the fourth largest port in the world and the third largest port in China, and it is responsible for more than 1/3 of Guangdong Province’s foreign trade imports and exports, and 1/4 of the country’s trade with the United States, the daily container handling capacity can reach 36,000 TEU. The slowdown of its operations will have a significant impact on international logistics and global supply chains.

It is reported that the blockage of the Suez Canal affects Asia-Europe trade more, while Yantian Port mainly affects Sino-US trade. A manager of Maersk Group said that the products sold by Wal-Mart and Home Depot, the first and second largest retailers in the United States, will be affected.

Jonathan Gold, vice president of supply chain and customs policy of the American Retail Federation, said that of its more than 16,000 members, more than two-thirds said that the supply chain must be delayed by 2-3 weeks.

Maersk and ONE updated the voyage plan of the South China port

Maersk

Maersk said that the current average waiting time in Shekou, Nansha and Hong Kong is between 2-4 days, but as more and more airlines ignore Yantian, this number is expected to rise. Deciding which port to call is always aimed at minimizing supply chain delays.

current situation:

1. The density of Yantian Port's storage yard dropped to 60%. It is expected that ship delays of more than 4 days will continue in Yantian Port in the coming week.

2. The yard density of Nansha Port reaches 100%. It is expected that ships in Nansha Port will continue to be delayed for 4-5 days in the coming week. Only 7 days before the estimated time of arrival of the vessel, and the trucking company has confirmed that the trucking company has booked in advance for the inbound full container at the terminal, can the inbound export container be accepted. Taking into account the high density of the Nansha Port yard, export containers will be restricted from entering the port from June 21 until further notice.

3. In Yantian and Shekou, the no-load supply of 40GP and 40HC has been negatively affected due to a large number of ship delays and port jumps. Maersk encourages customers to modify to 20GP as an alternative.

Maersk announced its ship sailing plan for the rest of the month, and 19 mainline services were affected.