European and American ports ready for box congestion

Container ports across the world aside from China are set to face imminent congestion as a swathe of boxes sent for shipment from factories in Asia arrive at their import destinations.

Shipping lines started calling at Chinese ports again three weeks ago as the infection rate in China declined and production resumed. Some but not all of the schedules blanked during February were reinstated as outputs started to rise again and a lot of boxes stranded during the initial lockdown finally sailed.

However, over the past 10 days the Covid-19 impact has dramatically hit consumer demand in American and European markets and buyers started cancelling orders as non-essential retail outlets closed and commerce generally shut-down.

The inbound unwanted containers are triggering forecasts of congestion in port stacking yards and sparking debate about demurrage charges and storage policies.

Yesterday the number of blanked sailings for the coming months has rocketed over the past week with 2M partners MSC and Maersk leading the way, cancelling 21% of Asia-Europe capacity in Q2.

THE Alliance carriers have now blanked 15 Asia-Europe sailings from week 15 to week 19, slashing their capacity on this tradelane, like 2M, by 21%.

The third liner grouping, Ocean Alliance, is expected to announce similar cancellations very soon.

Writing on LinkedIn, container shipping expert Lars Jensen from Sea-Intelligence noted that there has yet to be any mass reduction announced on the transpacific trades, but it might be expected that the pandemic impact in the US would be of a similar magnitude as in Europe.

The virus has hit rates with freight rate benchmarking platform Xeneta seeing a dip of 0.5% in rates for March after a sustained period of growth, with worse to come.

Thanks to Splash 24 for the news.