Maersk has released the latest market information on the logistics supply chain in Asia Pacific for November, and this article captures some of the information, focusing on the latest developments in maritime transport and the world's major ports.
Compared with 2021, the growth rate of global container demand is expected to slow down in 2022. U.S. consumer demand remains strong, but the outlook for the European market is uncertain, with european container demand growth expected to slow somewhat. About 12%-15% of the world's maritime capacity has not yet fully returned to normal use, while the shortage of containers in Asia has improved to some extent.
Outlook for sea freight capacity and container conditions for the first quarter of 2022:
Due to port congestion and delays in shipping schedules, we expect that the cabin space will remain tight throughout the Lunar New Year. The current container shortage in Asia has improved as a result of Maersk's continued introduction of new containers and a series of efforts to repatriate empty containers to Asia. Before the Spring Festival, there will still be a shortage of containers in some areas, but the overall container situation has improved significantly compared with the previous months.
Asia Import and Export Demand and Space Outlook:
Although demand growth has moderated in some regions, demand remains strong overall. Due to the large backlog of orders, the export market continues to be saturated, and the space continues to be tight. The impact of the electricity restriction on China's exports is expected to be modest, but import demand in areas such as wood and timber is weak due to the knock-on effect of the power cut shutdown order.
Asian American routes • Market trends
Asia to North America: Overall demand is expected to remain strong in December. Congestion at North American ports has recently worsened, with vessel wait times in Los Angeles/Long Beach/Seattle increasing to 21 days. In order to reduce the impact of air flights and capacity shortages caused by port congestion, the TP9 route will be cancelled from November to Seattle, and Maersk will open a new TP7 route for Seattle to ensure capacity and schedule on schedule, while planning to deploy four overtime ships in December.
Europe, America to Asia: Delays and port congestion are expected to persist in December, particularly in Europe and North America. This will have a negative impact on on-time delivery of goods and return of empty containers to Asia.
Port Update
Major port dynamics in various countries
China Ports: Dalian suspended all cold chain shipments from November 8, affecting the shipment of all refrigerated cargo except for refrigerated fruits. Customers are advised to change their final destination to other non-congested ports in East and South China; barge operations in Hong Kong will be suspended between the end of December and during the Lunar New Year; and maintenance of the Three Gorges Dam from February 21 to March 23 will result in longer transport times and reduced barge capacity in and out of Chongqing and Yibin. Customers can consider inland transport/intercontinental rail as an alternative solution.
Ports of Los Angeles and Long Beach: Congestion remains severe, with about 80 container ships waiting for 25 days to dock recently.
Nordic ports: The yards operate at high loads, with multiple days of delays in almost all major ports.
Southeast Asian ports: Congestion at the port of Tanjung Parapas remains severe, with delays in cargo at some Southeast Asian destinations.
Busan Port: Congestion has improved, and the waiting time for ships is expected to be around 3 days.
Ports in Australia and New Zealand: Port strikes continue to affect Australian exports. The waiting time for ports in Sydney, Melbourne and Fremantle is up to 8 days. Affected by the epidemic, Melbourne's VICT terminal is still closed, and the number of operators is reduced. The port of Auckland is heavily congested, with a current yard utilization rate of 93%.
How to deal with the impact of power restrictions on supply chains:
Recently, several cities, including Guangdong, Jiangsu and Zhejiang, have been subject to power restrictions. Electricity shortages are mainly affected by a number of factors, including high coal prices, unpredictable climate change and stricter energy and emissions policies. Coal production has increased domestically, and some power restrictions were eased in early November.
The following three measures are recommended to help sellers mitigate the impact of power shortages on supply chains.
1) First, it is recommended to continuously monitor the power supply situation in order to adjust the production and logistics schedule;
2) Secondly, it is recommended to maintain close contact with local suppliers and partners to understand the local power distribution plan and solve the problem of supply line interruption in advance;
3) Third, adopt a matching logistics solution, thereby reducing cargo delays.
Demand for Asian-American routes remained strong
Looking ahead to the market outlook for the first quarter of 2022, Maersk said it still has a reduction in sea freight capacity due to the continued existence of issues such as port congestion and delays. It is expected that during the entire Lunar New Year, the space will be very tight, it is expected that the sea freight rate will rise, and there are shipment plans in the near future, and it is recommended to arrange in advance.
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