Global Market update

Please find a quick Global market update.

The main shiplines have indicated there is no possibility of increasing their capacity on all trade lanes. This unfortunately means we will likely face more months of inflated freight rates as the forces of demand exceed those of supply.

The number of “idle” container ships remains at an all-time low – 140 ships worldwide are not in use. I am unsure the nature or size of these vessels but they surely must be ready for the salvage yard.

With Chinese New Year underway we would normally see the start of the slow-down period, unfortunately there is no sign of relief at this time this year,

 NEW ZEALAND

  • There were approximately 1,000 empty containers exported out of NZ last week via an ANL vessel. This is welcome news and hopefully will help provide relief (at least in the short term) for the heavily congested container depots who continue to struggle with the volume of empty containers being dehired.
  • Container vessels remain waiting at anchorage for several days before being given berth to discharge at ports of Tauranga and Auckland. At the time of writing delays are also being experienced in regard KiwiRail transporting boxes from Tauranga to Auckland.
  • Southdown / Metroport site in Onehunga is operating dangerously close to maximum capacity.
  • Five (5) additional crane operators have been granted permission to enter NZ from offshore. It is hoped that once operational their deployment will greatly assist POAL to catch up on back logs.

NORTH ASIA

  • We are seeing a significant increase in FCL to LCL conversions as the supply chain adapts to the current environment. In particular Shanghai as well Taiwan showing notable increase in this type approach. I would expect this pattern to spread to other ports. It is largely driven by the lack of equipment available.
  • Equipment shortages continue to cause delays. In particular NZ and Australian destined cargoes struggle against the higher yielding more voluminous European / USA cargoes.
  • Yantian is experiencing increased road congestion as exporters desperately try to clear backlogs of orders in the lead up to Chinese New Year closures. In addition, the traditional barges and smaller vessels servicing the Pearl River Delta River have stopped accepting bookings due to COVID testing in South China and Hong Kong. Containers are now forced to travel by truck through the main ports (such as Yantian) and this is causing significant congestion at the terminals.

SOUTH EAST ASIA

  • Container shortages in S.E Asia as well India are expected to last for many more months to come. Of note this issue has had a negative impact on the Indian economy (export) as their export figures continued to fall for six months in a row. Indian exporters are calling for tighter regulations on freight rates as well asking for Govt intervention.
  • Supplier costs are increasing. This surely must flow into FOB pricing. The increases are in the form of equipment and space guarantee fees as well various other charges levied by the ship lines. For example, MSC have introduced a booking fee for cargo routed to Australia / NZ of USD 150 per container. Ship Lines are applying pressure to accept the new charges and if not accepted the lines will not entertain the booking.

AUSTRALIA

  • The Maritime Union of Australia has given notice advising the Victorian Terminal that it will be facing industrial action / disruption. This can only lead to further disruption / delay in berting and unloading cargo into Melbourne. Disruption will begin with a four hour stoppage at the terminal on Tuesday 16th February from 16:00 to 20:00.
  • No improvement in the availability of 20’ containers
  • Continued delays in regard vessel arrivals due to congestion in both Australia and NZ ports.

EUROPE

  • All our European agents/partners are operating as normal with a mixture of working from home as well skeleton crew in the office. All container yards are operating for LCL loadings.
  • There remains a large backlog of cargo that CMA are working through and they hae stopped accepting bookings for February to NZ. This of course has caused an overflow onto Maersk and Hamburg Sud. Space will remain very tight.
  • MSC are still not taking bookings ex Italy direct to Australia, this is now going via Singapore and subject to a lot of delays. This is causing overflow onto CMA which is now heavily congested especially ex Spain and Italy.
  •  Brexit backlog is still causing issues in UK where space is particularly tight.

USA / CANADA

  • Sailings ex the West Coast are being advertised as fortnightly – in reality sailings are every 3 to 4 weeks. Just yesterday the second vessel this year (2021) departed Long Beach. It was heavily overbooked. Normally we would see 4 maybe 5 vessels per week. There is no alternative that does not involve much longer transits and risk of offload via Asia. West Coast trade lane to NZ is particularly bad. A lot of tonnage has been removed from market, what remains is heavily over-booked. You need to book as far in advance as possible.
  • Long Beach Port is also a COVID hot spot and this is causing labour shortages.
  • East Coasts Ports are now becoming congested as increased cargoes were re-routed via the East which offered longer transits higher costs BUT at least cargo was moving.
  • Rail within USA for 20’s remains an issue. The USA market is based on 40’s and 20’s can be delayed while they wait for another 20’ to fill the wagon.

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