Weekly Update – 01.07.2022

Weekly Update – 01.07.2022
July 1, 2022 Hannah Marshallsay

Carriers reduce sea freight capacity from China by further blank sailings. Serious congestion and recent industrial action leads to shipping lines omitting North European ports.

European Ports Omitted Due to Strikes and Congestion

Poor schedule reliability resulting from the challenges in Asia has been driving up port congestion at key North European ports for some time. In addition there has been the recent added pressure of workers at ports in Germany going on strike over pay and increased work requirements. As a result we are seeing increased dwell times at North European ports. For example, currently there is a four-day dwell time in Antwerp rather than the normal one-day. 

In an attempt to get back on schedule, shipping lines are responding to the delays in vessel handling by temporarily cutting key hub ports including Rotterdam, Hamburg and Antwerp out of their EU rotations. Vessels being redirected to other ports such as Zeebrugge to load and unload cargo, which is hindering the usual movement of goods. 

With unions threatening further industrial action and hub ports requiring time to catch-up on clearing the congestion, we anticipate delays that will continue for some time. 

Capacity From China Reduced by Further Blank Sailings

Since the reopening of Shanghai, the backlog of containers created during the lockdown period has been systematically cleared. The manufacturing ramp-up for a predicted early peak season is proving to be a more prolonged process than anticipated. There has not been the predicted surge in demand and as a result shipping lines are reducing capacity through further blanked sailings from China which will continue through the coming weeks.

Analysts are now predicting that the peak season will begin mid-to-late July and last through Q3. The stability of the market for the rest of 2022 and beyond will be driven by multiple factors: Demand from western economies which may weaken as rising inflation hits consumer confidence; continued covid restrictions (with China maintaining its zero-covid policy) and the resulting disruption from labour shortages; recurring capacity management by shipping lines.

The situation across China is improving with all port regions registering declines in berthing delays, and vessel queues are falling. However some areas in China continue to have covid control measures in place. Below is a summary of the key areas that are currently being impacted.

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