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Container rollovers set to continue after December rise

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Container rollovers look set to stay and seasonal patterns in container logistics are gone, according to Project44.

The supply chain visibility company forecast a stabilization of container markets in 2022, albeit with continued high demand, and the caveat that the omicron and other variants of COVID-19 could bring further disruption.

Project44 considers a significant improvement in ocean freight conditions in the first quarter as unlikely due to COVID-19 outbreaks; rollovers are expected to continue into 2022 as empty boxes are returned to Asia and lines struggle to adjust to port congestion.

“Global container roll-overs increased sharply from November to December, reaching 45% for December due to port congestion and Asian manufacturers need for empty containers to fill and export in January and post-Lunar Chinese New Year,” said Project44. The 45% figure was a high for 2021, where the range fluctuated between 38% and 42% prior to December.

The typical annual cycle for the container market used to bring a quiet end to the year, which followed a busier period when distributors and retailers stocked up for the holiday season. Since the pandemic’s outbreak, the usual supply and demand fluctuation in goods has been rocked as delays and congestion affect the flow of goods at a time when consumer habits and demands changed rapidly.

“There is no longer a typical pattern for movement of inventory and other goods,” said Project44, adding that the current peak season is stretching for two years compared to the usual few-months during normal annual cycles.

Beyond the headlines for the whole supply chain, situations are quite different across the world.

Easing congestion in Hong Kong, Yantian, and even delay-plagued Long Beach and Los Angeles compared with rising congestion in key European port Rotterdam. Rotterdam was struggling with delays to inland logistics and insufficient storage capacity, a situation the port expected to remain throughout 2022.

The short term may offer some reprieve for struggling ports as Chinese New Year—typically a period in which Chinese manufacturers down tools—approaches on February 1.

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