The latest report released by the shipping consulting agency Sea Intelligence shows that the shortage of empty containers in Asian ports will continue this year, at least until January next year.
The biggest problem facing the container shipping industry is that some key regions, especially Asia, are facing a serious shortage of empty containers.
The short interest of empty containers is also the main reason that pushes the spot container freight market to historical highs, and it is also the main reason why shippers who want to be able to ship their products in time are very annoyed.
Some reports pointed out that due to the shortage of empty containers, the current impact on domestic exports has emerged.
Investment securities noted in exports , China's exports of most goods were transported by sea containers . The greater the export freight volume, the greater the demand for containers and the higher the freight rate. The freight rate index is consistent with the export year-on-year trend.
This year, SCFI began to increase prices at the end of May, matching the time when the European and American economies were unblocked. That is, the demand for Chinese goods increased after overseas unblocking, corresponding to the positive export growth rate from June; and the SCFI price increase has accelerated significantly. At the beginning of November, the export growth rate in November increased by 9.7 percentage points to 21.1%. From this perspective, based on SCFI's repeated record highs since December, exports remain strong in the short term.
On the supply side , under the high trade surplus, empty containers have been left without return, which has exacerbated the shortage of containers.
The China Container Industry Association stated that the average turnaround time of containers in China has jumped from 60 days to 100 days due to the reduction of capacity in the United States and Europe due to the virus, which has exacerbated the shortage of containers in China .
Some US importers have stated that they cannot receive the goods on time during the November-December shopping season. This will result in companies unable to deliver enough goods to meet consumer demand during local holidays.
Faced with this important problem of serious shortage of containers, I believe that the highest priority for everyone in the industry (consolidation industry, foreign trade industry) must be: when can the problem of container equipment shortage be solved?
In the latest market report, the shipping consulting agency Sea Intelligence modeled the overall state of the market based on advanced regional data. Through the estimation of the global container pool and global shipments, the base time required for a container to be loaded in Asia, complete its voyage, and to be loaded again in Asia is determined. Then, use Container Trade Statistics (CTS) demand data and Asia's potential empty container buffer inventory to supplement the explanation, and finally achieve the purpose of calculating the availability of empty containers in Asia.
By simulating 4 different strategies for the carrier (shipping company, etc.) to potentially solve the shortage of empty containers:
(1) Do not take any measures against the shortage of empty containers;
(2) Actively relocate empty containers on routes exported to Asia;
(3) Inject new containers to reduce the current burden;
(4) Operators actively take measures to reposition the containers and inject new containers.
The figure above outlines these strategies and their resulting impact on the availability of empty containers in Asia.
Given the above data model, SeaIntelligence pointed out that the only possible solution to this problem in January is when the shipping company has to purchase new containers and actively reschedule the return of empty containers . In fact, major shipping companies are also actively pursuing and attempting to implement strategies.
However, Sea Intelligence stated that this strategy will also cause serious problems for return shippers.
The market is therefore faced with a severe choice-either the carrier pursues the current strategy to achieve the goal of solving the container shortage in January next year, or the shipping company reduces their aggressive container repositioning strategy for the benefit of return shippers. But the result will be that the shortage of empty space will last at least until February next year, or even longer.
Shipping companies suspend bookings for Asia-Europe heading
With the lack of empty containers, shipping companies also feel that they have more than enough energy. Some shipping companies have to reduce or suspend bookings for a period of time in the future.
Not long ago, CMA CGM, the world’s fourth-largest container shipping company, announced that it would stop accepting bookings from Asia to Europe in the next three weeks. Specifically, the company temporarily suspended the 49th, 50th and 51st week of this year’s Asia-Northern Europe route. Booking.
Then, according to the Danish shipping media shippingwatch, Maersk and ONE also said recently that they had to refuse some inquiries.
The world’s largest shipping company Maersk stated in a written reply to the media, “The current situation in Asia is very tense. Due to the large backlog of containers, we have reduced the short-term cargo orders in the last few weeks of December to a minimum, and Several voyages had to be stopped (reservations accepted)."
Singapore-based ONE Shipping said that the current industry is developing very fast, and the company is no longer able to accept goods transferred from other container companies.
In reply to the shipping company, the company wrote: "It is impossible to accept new transfers from other shipping companies, but we can basically meet the needs of existing customers without any substantial cancellation of bookings."
