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Carriers skipping second-tier Chinese ports amid congestion, delays
Source
American Shipper
Post Date
06/04/2021

Chinese exporters are having a harder time shipping goods from second-tier ports as mainline carriers skip calls and curtail direct calls to improve schedule reliability and equipment availability. And as the two-day partial shutdown of a Yantian terminal showed, local COVID-19 outbreaks and the quarantine rules that follow are adding another level of uncertainty.

Carriers are ping calls at Qingdao, Xingang/Tianjin, and Ningbo as congestion at marine terminals builds and container services suffer delays due to congestion at US and European ports. Adding to shipper woes, recent customer advisories from Ocean Network Express (ONE) show ships have omitted calls at Busan “to mitigate schedule delays.” The South Korean gateway is an important transshipment center for cargo from ports such as Xiamen.

“The reduction in calls is mainly due to the ongoing COVID-19 pandemic and the recent Suez Canal incident. Compared with Asia, western countries have not yet gone back to business as usual, so there is a delay in ships berthing at the main ports like Los Angeles or Rotterdam,” Cliff Xu, chief utive of Rhenus Air & Ocean Greater China, told JOC.com. “This delay has affected carrier schedules and led to blank sailings, which essentially leads to a reduction in calls at China’s ports.”

The managing director of one Hong Kong-based forwarder said the ability to export from second-tier ports is “getting extremely critical.” “Currently only very few carriers have direct calls into Tianjin and Qingdao, including Cosco Shipping Lines and Evergreen Marine,” the source said.

“With westbound schedules seriously affected by port congestion and delays, carriers are deciding to skip Tianjin and Qingdao so as to catch up with the planned sailing schedule and increase vessel turnaround times,” the utive added. “Xiamen is also seriously affected.”

These reductions were highlighted in an d sailing schedule from ONE earlier this week that showed a total of 21 blanked trans-Pacific sailings in May, June, and July, including services starting from Qingdao and Xiamen.

That comes as US shippers have voiced their concern to JOC.com at the significant reduction in calls in northern China, especially Qingdao and Xingang/Tianjin, the main port serving Beijing.

Maersk highlights container shortages
Maersk announced it is omitting Ningbo on six southbound services to Australia, along with Busan and Japanese ports on several of these services. Maersk also said it is foreing two missed sailings and could slide four vessels in the coming weeks on Asia-US services as US port congestion continues to affect schedule reliability and capacity. The carrier is also mulling multiple port omissions on Asia-Latin America services to mitigate the impact of delays and improve schedule reliability.

Maersk highlighted further pain for shippers, saying the supply of 40-foot dry, high cube, and reefer containers in mainland China, Hong Kong, and Taiwan is insufficient to need demand. Shippers in South Korea, Japan, and Vietnam also faced an insufficient supply of 40-foot containers, the carrier said in a market summary last week.

“Container shortages for China less-than-container load [LCL] shipments are expected throughout May,” the carrier said. “LCL space will be impacted by general ocean capacity and schedule reliability. Lead time for LCL shipments is expected to be longer than usual as carriers are omitting ports, putting pressure on LCL capacity.”

The Hong Kong forwarder utive pointed out that some forwarders are using the booking slots released by carriers at gateway ports including Shanghai, Ningbo, and even Shenzhen, about 1,400 miles south of Tianjin and a five- or six-day trip, to truck containers from Qingdao and Tianjin to overcome the problems.

“Of course, the overall cost is very high,” the source said. “Right now, the space issue is even worse than before Chinese New Year in January and February. It’s likely the situation will not improve until the of this year and quite possibly to the next Chinese New Year in 2022.”

Forwarders are uncertain about the impact on the peak season.

“The peak season in the West doesn’t really have much effect on ocean freight, as such it is generally easier to predict the volumes,” Xu from Rhenus Air & Ocean Greater China said. “But with the space constraints this year, it may become an issue. We are monitoring the situation closely, and it is unlikely to improve this year.”

That comes as Maersk predicted that strong demand for exports from Asia would continue in the third quarter “and ocean networks are projected to be highly utilized.”

COVID-19 suspension in Yantian
Meanwhile, shippers in southern China are facing further issues this week as a coronavirus outbreak at Shenzhen’s Yantian International Container Terminal led to a two-day suspension in accepting laden export containers.

The Mediterranean Shipping Co. said in a customer advisory laden that export containers would be accepted, but only within four days of vessel arrival. The measure will on June 3 and is inted to tackle severe congestion within the terminal. Ironically, the ban caused major traffic jams outside the terminal as laden trucks waited outside.

Lars Jensen, CEO and partner at Vespucci Maritime, warned in a LinkedIn post that any COVID-19–related news from China should draw the attention of the shipping sector.

“Shippers globally, and not just from China, should follow such developments closely,” he said. “Any material flare-up of the pandemic in China has the potential of delaying the resolution of the current severe bottleneck and capacity issues in container shipping into next year.”


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