Port congestion at SHANGHAI terminals has accelerated over the last few days and has now reached the point of critical. Services are now being impacted for all carriers, with a knock-on effect to other Chinese ports, as exporters look to switch bookings to alternative ports to avoid delays, in particular, NINGBO and QINGDAO. All of these ports are ranked in the World’s top 10 and have seen the highest volume gains year on year. Further afield, ports in South East Asia and the Indian Sub-Continent are now suffering similar problems as a direct result of being on co-operating schedules.
A combination of issues listed below, rather than one single problem, has led to this situation which is expected to continue throughout MAY and with a real possibility that things will deteriorate before they get better.
• Unpredictable weather conditions, (dense fog).
• Transition to the restructured alliances.
• Implementation of larger vessels.
• Volumes being stronger than expected.
• Ningbo port omission by certain carriers
• Container equipment shortages
• Empty Hanjin containers taking up vital port space.
Carriers have taken steps by reducing agreed customer space allocations in an attempt to handle a lesser number of bookings effectively. No doubt that while this period of uncertainty exists it will give strength for market pricing to remain high as subsequent roll pools are created with the backlog of containers awaiting export. From their side, Shanghai International Port Group has announced that they are already taking necessary actions to enable normal port operations as soon as possible.
Sandford will monitor the overall situation and issue a further communication update at the earliest opportunity, however delays should be expected and planned for in the interim.