Weekly Update – 28.06.2024

Weekly Update – 28.06.2024
June 27, 2024 Hannah Marshallsay

The shipping industry remains under immense pressure due to a significant capacity shortage in the market resulting in severe vessel delays, escalating port congestion and equipment shortages.

Global shipping capacity has been restricted due to ongoing diversions around the Cape of Good Hope, with the Suez Canal still deemed unsafe due to the conflict in the region. With all vessels in the market being deployed presently, this capacity pressure, coupled with heightened demand, has driven rates to levels reminiscent of those seen during the pandemic.

Demand Exceeding Supply

We are currently experiencing an early peak season driven by Western retailers who are ‘pre-stocking’ to sidestep congestion and supply chain issues typically seen from July to September. This surge in demand has outpaced supply, with all available ships in operation. Space constraints, caused by vessels deviating from schedules and returning late to origin ports, has led to longer rotations and impacted outbound traffic from Asia, exacerbating congestion at major port hubs.

Worsening Port Congestion

Port congestion is posing significant challenges at origin ports, transshipment hubs, and destination ports, especially in the Mediterranean. Ships often arrive on unscheduled days, resulting in berthing conflicts and substantially longer waiting times due to ship bunching. While bypassing ports is usually a last resort, the severity of congestion has forced some carriers to skip ports including Singapore and Tanjung Pelepas, where waiting times are particularly long, thus causing delays and congestion at other downstream ports. Key West Mediterranean container terminals are also struggling with increased volumes of shipments from Asia destined for the East Mediterranean. Additionally, industrial action at major European ports is exacerbating the situation, with strikes significantly impacting container handling and onward rail transport. 

Equipment Shortage Challenges

Concerns about container shortages are growing as increased volumes, prolonged rotations and worsening congestion at Asian and Mediterranean ports is reducing the availability of container equipment in key regions. There are now shortages in multiple areas including Bangladesh, China, Taiwan, India, Cambodia, and Thailand. The availability of equipment varies daily, depending on vessel arrivals and the discharge of empty containers.

Future Outlook

All of these factors continue to affect the reliability of Asia-Europe services. We are experiencing significant disruption to vessel schedules, with the situation expected to worsen through July. Congestion and equipment shortages are likely to persist in the near term and may take months to fully resolve. This challenging period is anticipated to bring prolonged transit times and continued delays. Despite these difficulties, we remain committed to minimising disruptions and will provide regular updates to keep you informed.

If you have any questions or concerns regarding your shipment, please contact our Customer Service Team at 01376 533039.

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