North American ports may "explode" in the peak season in August! Maersk reminded to return the container as soon as possible

Shipping is busy during the peak trade season in Europe and America. At the same time, container manufacturers are increasing their production capacity. Where have all the containers gone?

According to data from the container transportation platform Seaexplorer, many boxes are blocked on the road. As of August 9, more than 120 ports around the world were in congestion, and more than 396 ships were docked outside the ports waiting to enter the port.

The reporter can see from the schematic diagram of the Seaexplorer platform that the ports of Los Angeles, Long Beach, and Oakland in North America, the ports of Rotterdam and Antwerp in Europe, and the southern coastline of Vietnam in Asia are all heavily congested.

On the one hand, containers are congested at sea; on the other hand, due to insufficient land unloading capacity, a large number of containers are piled up in inland freight centers in Europe and the United States, and the phenomenon of container loss occurs frequently. The two are superimposed, and many containers "have back and forth".

August was originally the peak season for traditional freight. The latest forecast issued by the National Retail Federation of the United States shows that the number of containers entering North America in August this year may set a new record, and container congestion will continue to transmit shipping prices.

In an interview with reporters, Huo Jianguo, vice chairman of the China World Trade Organization Research Association, said that in the past (the smooth flow of containers was due to) there were exports and imports, and now some trades have been interrupted. "After exporting, if there is no goods shipped back, the boxes may be emptied. Who will be responsible for arranging the empty boxes to be shipped back after emptying? In the process, there will be logistics problems, mainly due to technical connection problems." He said.

The United Nations Trade and Development Organization (UNCTAD) recently issued a document calling on policymakers from all countries to pay attention to the following three issues: trade facilitation and digitization of flexible supply chains, container tracking and tracing, and maritime transport competition issues.

All stakeholders in the maritime value chain also hope to take advantage of the current opportunity to promote port infrastructure and even digital upgrades. However, can such a vision be reflected in reality?

Currently, more than 120 ports around the world are stuck in congestion. According to the port performance data of IHS Markit, as of May this year, the waiting time for container ships has more than doubled since 2019. The deterioration in North America is the most serious. In May 2021, the average berthing time of North American ships was 33 hours. In May 2019, it was only 8 hours on average.

The main reasons for port congestion include blockades caused by the epidemic, delays in Asian loading ports, and inability to carry out export loading and unloading in time; import ports due to lack of manpower, surge in imports and other reasons, resulting in poor container circulation and lost containers.

For example, in countries such as Vietnam, India, and Bangladesh, port congestion is mainly caused by the continuous blockade measures adopted by the spread of the Delta epidemic.

Taking Bangladesh as an example, due to the restrictions of the epidemic lockdown measures, the Chittagong terminal yard with a total capacity of 49018 TEU (20-foot standard container) has reached 43574 TEU, and its daily delivery capacity is only 1,000 to 2,000 TEU.

At the same time, European and American cargoes were also blocked in ports. The Maersk Group, headquartered in Copenhagen, Denmark, recently stated that the situation in Southern California has “worsened” and that the number of ships at anchor has doubled in the past few weeks. On the east coast and southeast of the United States, truck transportation was delayed by two weeks, which increased the container stay time and further increased the difficulty of finding the container chassis.

According to data from the American Trucking Association, in 2019, the industry lacked nearly 61,000 drivers, and by 2028, the driver shortage will reach 160,000.

A business person who has been engaged in import and export trade for a long time explained to the reporter that due to the slow loading and unloading of many ports in West America, a truck driver may only carry one box a day. If you can find three drivers, you can carry three. In fact, there are not so many drivers.

At the same time, railway congestion has further exacerbated the delays in US import deliveries and the return of empty containers to Asia for export delays.

Maersk’s data shows that the average residence time of its containers in the United States has increased by 35%, which means that overall capacity has been reduced by 35%.

"In the past few weeks, we have begun to see a rapid increase in the average residence time of containers." Maersk said in a note, "This has exacerbated the growing shortage of chassis in most of the Midwest and the Northeast."

Maersk issued a customer consultation announcement last week entitled "Need Critical Help-Congestion Increase", in which it urged American customers to return containers more quickly.

Maersk said: "We don't expect congestion to decrease anytime soon. On the contrary, the entire industry predicts that the U.S. volume will be higher in early 2022 and beyond."

There are also stock reasons for container turnover. Affected by the epidemic in 2020, the number of voyage cancellations increased significantly year-on-year. Zhou Shijian, a senior researcher at the Center for China-US Relations at Tsinghua University, told reporters that this has led to serious overseas empty containers being stranded for a long time, reducing the efficiency of container turnover.

According to the survey data of the China Container Industry Association cited by Xinhua News Agency in January this year, only one container can be returned for every three exported containers. A large number of empty containers are backlogged in the United States, Europe, and Oceania, which affects the efficiency of container turnover.

“Affected by the epidemic in the United States, port and terminal operations are not smooth. Sometimes there will be shutdowns for a period of time. After the shutdown, the entire scheduling will be messed up and cannot be connected.” Huo Jianguo told reporters that the United States has some problems with terminal management now, and it often happens. It appears that the container exported to the United States arrives at the port, and the importer picks up the cargo. This empty container is supposed to be tracked by the terminal or the shipping company, because these boxes will be used the next time the cargo is pulled, but it is now a bit chaotic.