![]() Slowdowns in Los Angeles and Long Beach began to radiate across the industry and other short-term shocks such as the Suez Canal blockage in March 2021, and closure of Yantian in May 2021 and Ningbo in August 2021 due to COVID-19 outbreaks, exacerbated the situation.īy December 2021, congestion had removed around 16 percent of global container ship sailing capacity when compared to September 2020 (Exhibit 4). By September 2020, the hinterland intermodal subsystems, particularly in the US West Coast, became overwhelmed and failed to keep cargo moving out of the congested terminals. Please email us at: imports from Asia poured into North American ports, cargo operations started to slow down at container terminals. If you would like information about this content we will be happy to work with you. We strive to provide individuals with disabilities equal access to our website. Idle capacity, and smaller North-South trade lanes, contributed to vessel and equipment capacity being diverted to North American import-related trade. Allocated container vessel capacity on the Transpacific trade lane-Far East and North America-increased by 31 percent between January 2020 and December 2021, which is more than three times the growth of the next largest East-West trade lane by capacity, Far East and Europe (Exhibit 3). Lockdowns in North America saw a strong rebound in consumer demand and ocean carriers captured this surge in demand by shifting vessels and container equipment to the Transpacific and Transatlantic trade lanes. Container box shortages at export locations increased rates as shippers scrambled to secure access to the limited boxes. Once China’s factories restarted, demand for containerized goods recovered by Q3 2020. This measure allowed ocean carriers to protect rates from crashing, but it failed to reposition empty containers back to Asia effectively. Ocean carriers responded by cancelling sailings and idling vessels to match the logistics supply with demand. Retailers feared a global recession and cut back orders. When China went into lockdown at the beginning of 2020, export volume slumped. Please email us at: The spike in rates is driven by a sharp reduction in effective supply, caused by congestion ![]() Average container schedule delays have doubled globally, and increased by six times on the Far East and North America trade from two days in the first quarter 2020 to 12 days in the last quarter of 2021 (Exhibit 1). ![]() Shippers that managed to find access to the constrained capacity have experienced record low reliability both at sea and on land. Shippers have struggled to locate capacity, with acute shortages of vessel space, container boxes, chassis, warehouse space, intermodal capacity, and labor. Shanghai Containerized Freight Index (SCFI) and China Containerized Freight Index (CCFI) data sourced through Clarksons Research’s Shipping Intelligence Network (SIN),. ![]() Global container shipping rates have, on average, increased to four to five times their 2019 levels while some spot markets have seen even higher rates. COVID-19 led to a boom in US containerized consumer goods demand, causing congestion, and reducing effective container logistics capacity. Global supply chains have seen unprecedented disruption, and container freight rates are at record highs.
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