Despite national and local governments trying to convince us that life is heading back to normal, there are indicators everywhere that this might not be the case. And, what’s happening in China isn’t staying in China—at least in terms of the supply chain. Lockdowns have impacted manufacturing, leading to blank sailings from the lack of cargo. The problems will likely beget more problems, too. This is because the lack of containers entering China during the lockdown will exacerbate the existing shortage of equipment once things open up again.
Operators are worried they’ll again face the chaos of those early days, as Chinese lockdowns are lifted. Adding to closed factories, China is currently facing a shortage of truck drivers, all of which has led to a drop in volume of 26% for goods shipped from Shanghai by sea, and a drop of 19% of goods leaving the port by truck. Unfortunately, when things rebound, further disruption is expected.
Moving north to Russia, their now months-long invasion of Ukraine has meant the cancelation of many flights to the area. And unfortunately for the air cargo industry, both countries are home to fleets specializing in extra-large cargo. Echoing the sentiments above about returning to the early days of the pandemic, this is exactly what’s happening with capacity being cut so drastically.
February saw a drop of 15% in global container volume over January, but industry analysts don’t agree on the cause. While some feel that it’s an indication of a drop in demand thanks to an economic contraction, others point to a loss in vessel capacity thanks to worsening port congestion. A comparison to pre-pandemic volumes indicates an increase in demand of 23%.
Finally, on the US West Coast, the ports of Los Angeles and Long Beach have once again delayed the implementation of their Container Dwell Fee, which was initially approved in late October 2021. Fees would be levied against ocean carriers for every container moved by truck that had a dwell time of nine or more days or containers with a dwell time of three or more days that were moved by rail.
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