While Ever Green’s saga continues, many other problems we’ve been seeing for months are still weighing on the industry. Imports (and rates) are still up, but at least there have been some improvements in the longshore labor situation. To start week 16’s updates off, here’s what we’re hearing from market insiders:
“Due to strengthening demand, carriers are facing more restrictions and can no longer guarantee FAK space — even for bookings that were placed with them much earlier. In a recent Hapag-Lloyd briefing session, CEO Rolf Habben Jansen mentioned the congestion of the container line market will most likely continue until Q3. This means shipping professionals will have to manage both the ongoing issues with space and the equipment shortage between now and October unless market conditions start to normalize again.”
“Some customers are still waiting and hoping the market will improve in May, but based on recent experiences, it looks like these problems are here to stay at this point in time. For all urgent shipments, we encourage customers to consider investing in premium services and booking as early as possible. Most carriers recommend booking premium services 3 weeks before the official sailing date.”
According to FreightWaves, imports to the top 10 U.S. container ports rose 67.8% YoY. More specifically, imports to East/Gulf Coast ports rose by 48.5%, while those to West Coast ports rose by 89.5%. Last month, the top 13 U.S. container ports registered double-digit YoY growth, and in some cases triple-digit increases, which explains why some of the busiest gateways have experienced so much congestion lately based on JOC.com’s data.
At the same time, U.S. retail inventories remain well below pre-pandemic levels, and given the huge increase in e-commerce, same-day, and next-day deliveries, many companies will need to see a rebound in their inventory-to-sales ratios. And with shipping lines focusing on managing capacity to meet demand, it’s pretty unlikely there will be a significant decline in freight rates anytime over the next decade.
In other news, since more than 8,000 dockworkers have been vaccinated throughout the harbor areas of Long Beach and Los Angeles, roughly 400-500 more longshoremen per shift are reporting to the docks now in comparison to last summer. Meanwhile, it’s been reported that the aftermath of the Suez Canal blockage involved an estimated 1.9 million TEU of capacity and resulted in a cumulative delay of 1,017 days in both directions.
So, as heavy demand for container shipping rises and the difficulties of handling such large volumes increase, shippers should prepare for the current equipment imbalance to further escalate in the coming months. To learn more, check out the following article highlights: