Analysts project44 said container lines blanked 298 sailings globally between 1 – 15 June with a combined vessel capacity of over 3m teu. This represents a 300% increase in one month, and while not all these blank sailings were caused by the problems at Yantian International Container Terminal (YICT) it resulted in much of the increase.
“While the epicentre of this particular breakdown is YICT, these numbers spell trouble across the maritime shipping world, and particularly for companies that rely on these routes,” said Josh Brazil, Vice President of Marketing at project44. “Even shipments not directly impacted by the Yantian situation could feel the impact, as carriers adjust their networks to avoid congestion at YICT.”
“We’re advising shippers with a China focus to get full visibility into your shipments, look for alternative ports, and do everything you can to get ahead of this event because it has the potential to create massive headaches across the global economy,” Brazil said.
Project44 said the number of blank sailings remained elevated through to 24 June, and the fall off after that is conditional on the Covid-19 situation in the port and the South China region continuing to be brought under control.
YICT operations are reported to be returning to normal. The Western terminal re-opened on 10 June having been closed since 21 May for disinfection and quarantine following a Covid-19 outbreak, while the East terminal is reported to be working at around 50% of capacity.
Project44 warned that even with operations returning to normal it could take weeks to process the backlog of containers. “In the event that Chinese authorities extend their strict containment measures, high double-digit daily blank sailing rates could extend into July, snarling supply chains that use this critical global port well into the Summer,” the analyst said.
Meanwhile continued congestion, capacity and equipment issues are driving container freight rates to ever higher levels. Drewry’s composite World Container index increased 3.4% or $231 to $6,957.44 per feu on 17 June. Shanghai – Rotterdam rates increased 6% over the previous week to $11,196 per teu, an increase of 534% on annual basis.
The consultants warned of further increases in the coming week: “Drewry expects rates to increase in the coming week due to GRI implementations, high volumes and equipment shortages.”
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