- China’s Covid lockdowns increase congestion at the US east coast port.
- Chinese delays prove to have only one positive impact that is providing some breathing space to the US and Europe ports however, manufacturing might take time to flourish post-lockdown.
- Merchants’ plans to launch separate services from Asia to North Europe and the United States take a back seat.
- The first vessel affected by the network adjustments has been forecasted to be the 11,078 teu Grete Maersk.
Lockdowns in China have impacted challenger carriers and retailer-chartered services, says the report put forth by The LoadStar – making sense of the supply chain.
Lockdown Impact
Scrapped Sailings
Due to a combination of Covid shutdown cargo delays in China and congestion at US east coast ports, alliance carriers have announced blank transpacific sailings — and independent lines are feeling the heat as well. The Asia-US cancellations come after a handful of North European and Mediterranean sailings were cancelled last week. Carriers juggled their networks to lessen the impact of Shanghai’s Covid lockdowns, which lasted more than a month.
Cargo Delays
Carriers are advising shippers to transfer containers to ports that are not under lockdown, but as the virus spreads, lockdowns have been implemented in dozens of Chinese cities.
Schedules from China are “a whole disaster,” according to a carrier contact, and it will be “some time before we have a ship back on schedule.”
“The only positive aspect of the Chinese delays is that it will offer ports in Europe and the United States some breathing room,” he added. However, as we saw with the Suez Canal blockade, “they will be swamped once more by a freight influx.”
Merchants’ Plans troubled?
Data released on Saturday in China revealed a steep drop in factory activity last month, implying that even if the restrictions are relaxed, manufacturing will take some time to recover to pre-lockdown levels.
Export bookings from China are just 50% of usual, according to anecdotal accounts to The Loadstar, a drop in cargo availability that has thwarted the business strategies of ad-hoc and new challenger carriers that rely on the spot market for the majority of their bookings. Furthermore, merchants’ plans to launch separate services from Asia to North Europe and the United States may be shelved. Three ships chartered by Tailwind Shipping for a service for German discount retailer Lidl have recently been sub-let, according to brokers.
For example, brokers report, one of the ships earmarked for the independent service, the 3,800 teu Merkur Ocean, has been fixed with Hapag-Lloyd for six months at $61,000 a day.
Journey Cancellation
Meanwhile, turning their attention to the transpacific, 2M members Maersk and MSC, along with their co-operation agreement partner Zim, announced today that four scheduled Asia-US east coast journeys will be cancelled between May 21 and June 25. This was “due to the continuous adverse market condition causing congestion and scheduling delays throughout the supply chain,” according to MSC. The voided transpacific sailings are referred to as “slidings” by Maersk, who adds that the intended journey numbers would be altered accordingly. “Due to terminal congestion and vessel mishaps, our Asia-North America network continues to collect delays,” it said.
Network Adjustments
The 11,078-teu Grete Maersk will be the first vessel to be affected by the network changes, sailing from Yantian on the MSC/Maersk/Zim Empire/TP12/ZBA pendulum loop via the US east coast on June 11th.
The 6,266-teu MSC Damla will now depart Shanghai on the VSA partner’s Lone Star /TP18/ZGC loop on June 20. In addition, the 6,750-teu MSC Vanessa will sail from Xiamen on the Pelican/TP88/ZGX transpacific loop on June 11th, while the 8,204-teu MSC Bilbao will sail on the Emerald/TP16/ZSA RTW loop on June 22nd.
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Source: The LoadStar
