Weekly Update – 21.06.2024

Weekly Update – 21.06.2024
June 21, 2024 Hannah Marshallsay

The shipping industry continues to face significant pressure with multiple factors including vessel delays, port congestion and equipment shortages intensifying the situation.

The global supply of shipping space and containers has been constrained due to the now well established diversions around the Cape of Good Hope, with the Suez Canal still not offering safe passage due to the on-going conflict in the region. The lack of sufficient capacity combined with a surge in demand has continued to push up rates, hitting levels only previously seen during the pandemic.

Early Peak Season

The demand increase is attributed to an early peak season. Demand continues to be stronger than usual with retailers shipping their Christmas cargo earlier and building stock due to the longer than anticipated lead times. Companies have been trying to secure space to mitigate potential delays and ensure shelves are stocked for the festive period.

Port Congestion

The Red Sea crisis is continuing to perpetuate congestion across key port hubs. Ships are frequently arriving at ports on unscheduled days, leading to berthing clashes and significantly longer waiting times as a result of ship bunching. This disruption has led some carriers to skip calls at Singapore and Tanjung Pelepas, where waiting times are particularly severe, resulting in congestion and delays at alternative ports downstream. Utilisation levels at major West Mediterranean container terminals have also risen as large volumes of shipments from Asia destined for the East Mediterranean are being trans-shipped. Industrial action at key ports in Europe is also exacerbating cargo movement, with transport worker strikes heavily impacting container handling and onward rail transport. All of which has worsened port congestion globally and impacted the reliability of Asia-Europe services.

Equipment Shortages

Increased volumes and congestion at Asian and Mediterranean ports are impacting vessel schedule reliability, reducing available capacity and decreasing the availability of container equipment in critical regions. Longer rotations and worsening port congestion in Asia is causing equipment shortages in several areas, including China, Taiwan, India, Cambodia and Thailand. Equipment availability varies daily based on vessel arrivals and the discharge of empty containers.

Outlook

We are experiencing significant disruption to vessel schedules and longer transit times. The situation is expected to worsen over the remainder of June and throughout July. Congestion and equipment shortages will persist in the near term and could take months to resolve fully. This challenging period will likely result in extended transit times and ongoing delays for some months to come. Despite these difficulties, we remain committed to minimising disruptions and will provide regular updates to keep you informed.

Should you have any questions or concerns about your shipment, please get in touch with our Customer Service Team on 01376 533039.

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