China Port Congestion:
Delays are continuing in Shanghai, Ningbo and Shekou/Yantian ports and have now extended to Qingdao port following recent typhoons and vessel bunching. Vessel schedules are now running behind schedule between 10-13 days across the board from main China ports with little relief in sight.
Typhoon “Narra” hit Southern China last weekend compounding the situation and it is understood some 4,000,000+ containers are delayed at present.
Another Typhoon, “Saudel” has hit landfall today, Shanghai port has been closed for at least two (2) days, this will further affect East China in coming days with impacts to vessel berthing and departure delays, depot and terminal operations restrictions, trucking delays and a continuation of cargo rollovers all of which will add to already congested ports. Apart from Shanghai, ports in Ningbo, Xiamen and the surrounding area are expected to be affected by this latest weather event.
As a result of port closures and congestion, many feeder barges are stranded unable to offload their containers from inland ports. Some lines are now omitting Shanghai and/or Ningbo as the waiting time is just too long for vessels to be idle. Factories are working hard to meet peak season demand and new orders.
This is also adding to the backlog of cargo. Lines are not looking at adding extra charter vessels to clear the backlog as the delays involved do not make a daily charter viable. The small number of charter vessels that are available at present are being added to the more lucrative China-USA, China to India or China to South America routes where rates are substantially higher than China to East Coast Australia-New Zealand.
More broadly, the global container market is being hit simultaneously by extreme weather, port congestion, geopolitical disruptions, vessel rerouting, trade tensions and additional tariffs. The combined effect has removed a substantial amount of effective capacity from the market. If the estimated loss is around 700,000 TEUs, that would be equivalent to roughly the whole capacities of Hyundai Line’s current fleet or more than two-third of Evergreen’s. Against this backdrop, the market chatter regarding freight rate increases in September across almost every major trade is hardly surprising.
The situation is also affecting shipments to Fremantle and Adelaide, with MSC Line cancelling their last two (2) direct sailings from Shanghai and rolling all containers, this has put added pressure on other transhipment services that operate via Singapore with delays now around two weeks in connecting with the West Coast service.
To add to all the above pain, Southern China ports have invoked their ETB-7 rules for dropping containers to the port, if shippers deliver full loads back to the port too early, huge additional costs may be imposed.
Nansha port is also experiencing berthing delays due to a large number of vessels diverted from other ports,while extensive congestion has hit inland feeder vessels in the Pearl River Delta,severely disrupting transhipment to/from inland areas.
Naturally there are flow-on effects to other areas, the above is also causing delays in Taiwan, Korea and South-East Asian ports.
Indonesia in particular is facing a severe space shortage with very strong bookings continuing to add to the congestion and delays.
The GPSM Customer Service Team are constantly monitoring the situation and looking for alternative options where possible and they will keep updates coming to all clients as soon as new information is to hand.