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Congestion and delays ramp up after Shanghai lockdown
Data from VesselsValue shows an almost five-fold increase in the number of ships waiting to load or discharge at Shanghai in the last 2.5 weeks (as of end of March)
Maersk sent out a recent customer advisory saying due to the impact of the lockdown, it has seen an “increased yard density” for dangerous goods and reefer containers in Shanghai terminals. It advises customers, when possible, to ship or divert the cargo to other Chinese destinations or other markets to avoid the congested port. Maersk said several vessels will be omitting Shanghai.
While CMA CGM said, “Due to pandemic control management measures undertaken by local authorities in Shanghai, it sees a ’massive impact’ on both trucking movements velocity and available trucking capacities.
It added, “These factors have a major impact on import cargo that suffer a drastically slower pick up time and therefore excessively stretched dwell time, which results in high stress on yard plug capacities.”
CMA CGM said it highly recommended cargo owners anticipate potential issues and identify rererouting options. It said it would waive the change of destination (COD) administration fee for customers who decide to COD inbound reefers from Shanghai to other alternative ports.
Commenting on China’s Covid lockdowns, Container xChange co-founder and chief executive Christian Roeloffs said, “It’s almost like in a traffic jam. Some people now stepped on the brakes heavily. This will lead to a significant bulk up in demand for freight services which will be unleashed once the factories reopen. And when the demand is back, the carriers will again not have enough equipment on the ground because not enough equipment went into China during the port lockdowns and not enough vessels are available, so that will push up prices once again.
“This will continue pushing the volatility in the market and the congestion situation on the transpacific will also not significantly improve because it’s almost like a start-stop situation. It will just come back worse than it was because the way you remove the traffic jam is not by stopping something violently and then hitting the accelerator again. It’s making sure the traffic flows at a certain speed.”
He said the impact of Covid lockdowns on key markets will have wider-reaching impacts leading to equipment scarcity in China, rising rates and a worsening traffic jam on the transpacific.
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