Delays of shipments from China are expected to continue after the end of the Chinese New Year public holiday due to sustained demand and capacity volatility. Port Congestion in the US, Europe and UK continues to hamper shipment arrivals.
Further Shipment Delays from China to Come
While cargo has been moving out of South-East Asia and the Indian Sub-Continent as usual in the last two weeks, the Chinese New Year public holiday has caused shipments from China to temporarily subside. To make up for the lost working weeks from the closure of factories and reduced customs and port operations, there was the usual rush of higher quantities of goods in advance of the holiday. This year’s pre-holiday push was hampered by Government imposed Covid restrictions, which particularly impacted deliveries from factories into China’s key gateway ports. As a result much cargo is still sitting in factories and warehouses and will only be able to move when factories reopen.
The next two weeks will see the reopening of commerce in China. We are expecting a surge in bookings as factories attempt to clear the backlog of goods that they were unable to deliver to ports before the Lunar New Year. It is likely that the ongoing congestion at Chinese ports will lead to carriers suspending services or changing vessel rotations at short notice to avoid badly impacted ports. Regrettably it is inevitable that there will be difficulties with the movement of cargo and shipments from China over the coming weeks.
In a normal year carriers would start to reduce shipping rates in order to keep volumes buoyant during the subsequent quieter post Chinese New Year period. However, the ongoing bottlenecks coupled with with persistent high demand for exports is leading to continued high rates on major trade lanes from China. Due to the ongoing challenges with capacity and continued high demand, freight rates are expected to remain high.
Port Bottlenecks Continue to Impact Arrivals to US and Europe
The overall problems with congestion at ports in the US, Europe and the UK have not receded with no indication of improvement so far in 2022. Vessel arrivals remain impacted by heavily congested ports where carriers continue to skip port calls in an attempt to rectify schedules. The situation at US ports is worse than ever with even larger numbers of container ships idling offshore and waiting for berths at West Coast ports than a year ago.
The key North Europe hub ports, Antwerp, Hamburg and Rotterdam are all still experiencing slow productivity of port operations which continues to force carriers to skip port calls as they seek to avoid congestion and restore schedule reliability. Due to the ongoing berthing and landside delays at the Port of Felixstowe, carriers are still changing rotations and diverting vessels into a number of alternative ports in North Europe. All of these factors mean that vessels arriving into the UK continue to be subject to significant delays.