From FreightWaves, November 11:
Trans-Pacific eastbound cargo could be capped by container capacity limits
“It seems like containers are the new gold these days,” marveled Nerijus Poskus, global head of ocean freight at Flexport.
“Container availability in Asia is extremely limited right now,” added Flexport Head of North American Ocean Freight Jan Hinz during a company webinar on Tuesday. “It’s causing a lot of hardship for our customers and the shipping industry as a whole.
“We have heard anecdotal reports out of Asia that some ships are sailing with open slots simply because there is no equipment — even though there’s demand to fill the containers,” said Hinz.
Flexport’s warnings mirror last week’s headline-grabbing comments from Nico Hecker, director of global container logistics at Hapag-Lloyd.
“We are currently seeing a ‘black swan’ and are experiencing the strongest increase in 40-foot [container] demand following one of the strongest decreases in demand ever,” Hecker said. “Almost three out of four containers in our 40-foot fleet are currently deployed … and therefore not available.”
The trans-Pacific eastbound market is in the thick of a record-setting bull run. The California port system is buckling, with delays tying up even more containers and making the equipment shortfall even worse. Imports appear set to remain at peak levels at least through this month, and probably into Q1 2021, due to holiday cargoes and inventory restocking.
But shippers can’t get all their cargo to the U.S. if liners don’t have not enough empty boxes in China.
Not enough or not enough in right place?
“It’s not really a shortage. It’s more that the containers are out of position,” Ocean Audit founder Steve Ferreira told FreightWaves.
“Because of strong growth in places like Africa and South America — the more minor trades — the containers are out of position.
“They have to go on another leg, to a neutral place like the U.S., where they are gathered up and sent back over to Asia.”
Lars Jensen, CEO of SeaIntelligence Consulting, told FreightWaves, “It’s a confluence of two events. One clearly being the sharp uptick in demand growth. The other is the time-delayed effect of the many blank [canceled] sailings a few months ago. The blank sailings led to severe disruption in the normal repatriation flow of empty containers. The impact of that is being felt at the same time as demand has heated up.”....
....MUCH MORE
Was the FT's Izabella Kaminska sending a coded message on coming opportunity back in July with, as far as I can remember, her one-and-only Further Reading link on shipping containers?:
https://ftalphaville.ft.com/2020/07/01/1593587289000/Further-reading/"The Box" is an interesting read, highly recommended. Levinson does a good job describing what the introduction of containers did to old-school shipping and the societies living off it.
Elsewhere on Wednesday,
-- Another autopilot fail for Tesla.
-- And some more about Tesla’s insurance strategy.
-- Short-sellers turn their attention to J2 Global.
-- Ice is getting innovative.
-- The Fed may be forsaking the purpose of stress-tests.
-- One man and some metal boxes revolutionized global trade.
-- The pandemic has a far-reaching political role.
-- Will Trump weaponise some antique Chinese debt for his trade war?
-- Oh, and there’s another virus out there with pandemic potential.
