The container shipping industry has suffered an unprecedented supply chain challenge with cargo delays reaching all-time high levels and at least 37% of containers worldwide being rolled over, according to analysis by consultancy Ocean Insights.
[s2If is_user_logged_in()]Cargo delay statistics show how the bull run is causing havoc on the market, with surging rollover rates across major ports during December and most major carriers seeing increases in delays, according to Ocean Insights.
Industry analysts say that it is “one of the strongest bull-markets for container carriers seen in the last few decades.” The outcome is massive, as a 30% collapse in demand for container shipments in Europe and the US at the outset of the pandemic led to a subsequent 30% increase in demand with unprecedented negative market conditions.
Data released by Ocean Insights highlights how extensive delays have been, which ports and carriers are experiencing difficulties and a timeline of market volatility.
“As the Covid-19 pandemic threw global markets into disarray, consumer behavior changed dramatically, leaving the carriers as well as shippers stranded, either with goods they could not sell, or, in the second half of the year, with goods that cannot be moved,” explains Ocean Insights in its report.
“The latter crisis stems in part from a lack of containers, as the pandemic has caused box repositioning problems,” Ocean Insights added, noting that “Today, even if a beneficial cargo owner (BCO) can get an empty container for their cargo, there is no guarantee that the cargo will make it onto a ship.”
The latest figures from Ocean Insights showed that most major ports are experiencing elevated levels of rollover cargo from November to December. Rather than cargo flows diminishing in line with historical seasonal precedent, there are growing levels of demand during a period that usually sees a decrease in volumes.
This in turn is forcing further delays to cargo, which is increasingly lying stranded at the quayside, according to Ocean Insights analysis, which calculates the rollover ratio for carriers as the percentage of cargo carried by each line globally that left the port on a different vessel than originally planned.
“Of the 20 global ports for which Ocean Insights collates data, 75% saw an increase in the levels of rollover cargo in December compared to the previous month,” said Ocean insights’ chief operations officer, Josh Brazil, who added, “Major transhipment facilities such as Port Klang in Malaysia and Colombo in Sri Lanka recorded 50% or more of cargo delayed, with the world’s largest transhipment hub in Singapore and leading primary ports such as Shanghai and Busan rolling over more than a third of their containers, last month.”
Industry experts are now warning that the cargo surge could last well into 2021, with a strong likelihood that the prevailing conditions will continue throughout the first half of the year.
Moreover, reefer containers have attracted the recent concern for rollover cargo with a number of ports in China to report a lack of power points that are needed to supply electricity to the reefer boxes.
Overall rollover levels increased to 37% month on month in December, averaged across the ports surveyed, which includes facilities in all the major cargo regions of Europe, the US, and Asia as well as less cargo intensive regions such as Latin America, according to Ocean Insights, which added, however, that Latin America accounts for a significant proportion of the reefer trade with the US, Asia, and Europe.
While rollover levels can vary considerably from 62% in Italy’s Gioia Tauro, owned and operated by the second-largest container line in the world, MSC, to just 22% in Salalah in the Middle East, it is important to note that Shanghai’s 37% rollover level is likely considerably higher in actual container numbers than Cartagena’s 56% rollover rate.
“Meanwhile, the extra loader policy, seen in South Korea’s Busan Port, which saw a 4% reduction in its rollover levels in November, has, for the most part, lost those gains with a 3% increase in December,” noted Ocean Insights’ report.
Brazil explains that “This indicates that the levels of cargo are still rising while the extra loader capacity which has been deployed to meet the raised levels of demand appears to be having little effect.”
Furthermore, the major ocean shipping companies have also marked an overall increase in rollover values from 35% in November to 37% in December, while three of these lines saw more than 50% of cargo left at the departure port.
2M Alliance partners, MSC and Maersk, managed to stem the rise of rollover cargo month on month, both recording the same level of rollovers in December as in the previous month.
In addition, Ocean Insights has described as “the one statistical outlier in the pack” the South Korean carrier HMM, which has joined the THE Alliance in April, and managed to limit its rollover cargoes to less than 30% in all but two of the subsequent months; until December when the previous month’s figure of 23% more than doubled as the carrier saw a 26% increase in cargo rollover, reaching 49% for December.[/s2If]
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