Shortages of empty containers and voyage cancelations could persist for several more months and drive up freight rates, with the arrival of the peak sales season and lingering congestion at ports in Europe, the US and China, said the local branch of DB Schenker, a leader in supply chain management and logistics solutions.
“Empty container shortages are worsened by port congestion in Europe and the US, and recently, by China’s Yantian port backlog,” Schenker Taiwan vice president Antoine Bouin told an online news conference on Monday.
Ongoing disruptions at ports in southern China would have a more serious effect on the market than the earlier Suez Canal incident in late March, as Yantian port in Guangdong Province’s Shenzhen handles 24 percent of China’s total exports, Bouin said.
Photo: AFP
A COVID-19 outbreak caused Yantian port to close for a week last month, and subsequent controls and access limits have seriously reduced operations, he said, adding that congestion at Yantian spilled over to other ports in Guangdong and Asia.
As of last week, more than 50 vessels were waiting to dock, and 300 vessels skipped Yantian between June 1 and 15, he said.
The port is back at normal capacity, but the backlog is likely to take several weeks to clear, Bouin said.
Significant flow imbalances also added to shipping chaos in light of high volumes moving from Asia to Europe and the US, but low volumes coming from Europe and the US to Asia, he said.
Port congestion, berthing delays, flow imbalances and the slow return of empty containers have caused shipping lines to skip some of their regular trips and pushed global shipping schedule reliability to a historic low, he said.
Freight rates are likely to remain high for the rest of this year, Bouin said.
For Taiwan, freight rates and the container situation would be slightly better, as the arrival of new megaships at Evergreen Marine Corp (長榮海運) would help, he said.
Bouin said that companies should draw up accurate forecasts of volume for next quarter, plan together with shipping lines and make capacity commitments to secure space.
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