Data from the Container Availability Index shows a shortage of equipment in the US and northern Europe has worsened due to the coronavirus
“Equipment imbalances and empty container repositioning is a problem that costs the shipping industry US$20Bn annually, but due to the Coronavirus it “got even worse for most carriers or NVOs (non-vessel operating carriers)”, said Container xChange, the company behind the Container Availability Index (CAx).
“Especially in the US or Europe, companies are starting to experience frequent equipment shortages in several areas... This is a direct result of the ocean carriers’ blank sailing strategy which is triggered by low/no volumes on major shipping routes. Based on ocean carriers’ comments and the Container Availability Index, it is expected that this trend will continue," the company report continued.
Container xChange’s CAx forecasts supply and demand in container logistics for the biggest port locations up to three weeks in advance. Taking millions of containers tracked through the Container xChange online platform into account the index has shown that, compared to 2019, containers are piling up in China. It shows values of 0.47 (20DCs), 0.94 (40DCs) and 0.71 (40HCs) for week 10 2020 in Shanghai, China – an increase of 47% compared to the same week in 2019.
Container xChange points out that China more often faces shortages, but the current situation means there is a deficit of containers in North America and Europe. CAx values for Hamburg, Germany dropped by 33% to 0.07 (40HCs), 0.45 (40DCs) and 0.47 (20DCs). For Los Angeles, US, with CAx values of 0.25 (20DCs), 0.19 (40DCs) and 0.11 (40HCs) and Chicago, US with 0.02 (20DCs), 0.01 (40 DCs) and 0.11 (40HCs), the shortages are “even worse and the forecast says it will not get better soon”.
The uptick in blank sailings forces mainly NVOs to hold empty equipment longer than usual, incurring more demurrage and detention charges as well as chassis fees or repositioning equipment, where available, in addition to possible interchange fees. Additional surcharges and costs include peak season surcharges (PSS), container imbalance surcharge (CIS), congestion surcharges (CNS) and general rate increase (GRI).