Container chaos will take through to Q3 to resolve: TPM

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Shippers were told they would have to wait until the second half of the year before any semblance of normality would return to container trade flows. The CEOs of three of the world’s leading global carriers – Ocean Network Express (ONE), Hapag-Lloyd and Maersk – spoke at TPM, the world’s leading container shipping event organized by the Journal of Commerce, during which they discussed the current supply chain logjam and potential routes out of the ongoing container crunch.

Jeremy Nixon, CEO of Japanese carrier ONE, discussed issues related to terminal productivity in North America, with Asian counterparts falling by up to 50 per cent due to fewer working hours.

When asked when normal cargo flows would return to the transpacific, Nixon said that because of all the ships beside or anchoring in North America: “We’re actually running out of ships in Asia.”

“Frankly, we probably have another three to four months to do this,” Nixon said, adding, “hopefully, by the second half of 2021, we should see a more stable trade.”

Nixon told TPM that liners and their clients need to get better at predicting, working out how booking patterns are going to change. ONE is developing its own predictive analysis of the movement of cargoes.

Presenting with one of his ships from the port of Hamburg, the Philadelphia Express, in the background, Rolf Habben Jansen, CEO of Hapag-Lloyd, told TPM delegates that today’s high volumes would continue for “quite a while.”

Like Nixon, Habben Jansen was talking about the tight availability of both the boxes and the ships at the moment, which combined with terminal delays created a “perfect storm that everyone needs to work through.”

“We’ll get to some kind of normalcy hopefully in one or two quarters,” the Hapag-Lloyd chief said, adding that the types of peaks seen in the market in recent months are not good for everyone, calling for a return to stability.

“It should be more or less normal again by Q3,” said Habben Jansen.

Vincent Clerc, CEO of A.P. Moller-Maersk Ocean & Logistics, the world’s largest container line, said that global supply chains had never undergone stress tests in the last few months.

As with his liner counterparts, Clerc noted underinvestment along the coast of North America as a critical part of today’s back-up box crisis.

While container lines were reaping huge profits, Clerc said that for him and his Maersk colleagues, it didn’t feel like a “big high-five moment” because of all the inconveniences clients were faced with delays and rolled-up cargoes.

The latest data from Sea-Intelligence showed that the reliability of the global schedule dropped to a record low of 34.9 per cent in January – or, to put it another way, only one in three boxes arrived on time last month – a time period when shippers were paying record amounts for their goods to be shipped.

For Asia-North America’s west coast, almost 87% of arrivals were late last month, according to the Sea-Intelligence analysis. And when they’re late, they’re more than ten days late on average.

Clerc told TPM delegates that Maersk considers the current unexpected surge in consumer demand to be temporary. Clerc said Maersk predicts a return to a more normal base – similar to 2019 levels – in the course of 2021.

The pandemic did not change Maersk’s long-term view of the industry, with “fairly subdued” long-term growth expected, Clerc said.

“I don’t think anyone expects the current level of shipments to be a new normal that will accelerate growth,” said Clerc.

The CEO of Maersk also told the delegates that within five years he expects close to 100% of the liner business to be based on two-way binding contracts.

“It makes sense that we have a clear view of what we’re going to do for each other,” Clerc said.

Ref: https://splash247.com/container-chaos-will-take-through-to-q3-to-resolve-tpm/

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