COVID-19 Ocean Freight Update [Updated: 24th February, 2020]
Container Shortages Continue to Impact Freight Rates and Bookings
Following the slump in global shipping last spring, which left millions of shipping containers either out of position, or stranded in countries that import from Asia, manufacturing recommenced in China, challenging carriers to meet the resumption of demand.
Container Demand Outstripping Availability
With the holiday season approaching, container demand has soared further, compounding pressure arising from:
- The ongoing need to transport personal protective equipment (PPE)
- Anticipated and actual demand for refrigerated equipment for vaccine shipping
- Volatile ecommerce trade flows
- Global reductions in air freight capacity
Ocean freight rates have spiked, especially along transpacific trade lanes, as a result of the continuing issues with out-of-position containers.
In Asia particularly, carriers have sometimes been unable to fulfil freight bookings, primarily because of container availability problems.
New Container Supply is Stalling
Despite an increase in the price of new 40-foot containers, from $1,600 to $2,500 per unit, over the last 12 months, manufacturers cannot keep up with the demand. They say they are currently unable to satisfy orders for new boxes.
China Hit Hardest by Container Shortfalls
In China, it’s clear that a container shortage exists, with all ports and shippers suffering the effects. The ports of Ningbo, Shanghai, Xiamen, and Shenzhen, though, are the most severely impacted. Ocean freight rate hikes are an inevitable outcome of this situation.
To try and prevent shippers from experiencing bottlenecks, either at production facilities or at the ports, we’re working as closely as possible with Chinese ports and individual carriers to make containers available, to verify their availability, and to identify alternative solutions where possible.
Verification of availability has become critical, due to restrictions imposed by some shipping lines on the release of empty containers for departure from Chinese ports.
Container Shortages Elsewhere
While China, along with the USA has been heavily impacted by container shortages, they are not the only countries facing the issue. Thailand too, is experiencing shortages, as is Vietnam, where shortages are impacting Ho Chi Minh City severely. Australia is another country to suffer from port congestion as its peak season for shipping approaches.