European Equipment Shortages
As we have been detailing on our COVID-19 update page, the lack of cargo departing China is creating equipment imbalances in all parts of the world.
Exporters rely on a steady supply of import containers to load for export, whether back to Asia or elsewhere in the world. These exports take on many forms—raw materials for manufacture, finished goods for sale or agricultural products for consumption half a world away.
The outbound container volumes from Asia—and China most specifically—ensure an available supply of containers in markets such as the EU and United States.
According to Global Trade Magazine, “This is a direct result of the ocean carriers’ blank sailing strategy which is triggered by the 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, if not only worsen.”
With little or no exports from China and with the number of blanked sailings, no containers are moving anywhere in the world and this includes loaded and empty boxes at key European seaports.
In Hamburg, the HHLA terminal is over 100% capacity (currently operating at nearly 120%) and have implemented a rule that export containers cannot be delivered more than 48 hours prior to the export vessel’s arrival.
One of the two largest shipping companies in the world now faces not just a shortage of containers in Europe, but a near total absence of them leaving them unable to accept export loads leaving the EU.
While many shipping lines are trying to reposition empties to areas of higher demand, it’s a bandage on the shortage. TOC and ProTrans expect to see equipment shortages until mid-April, though the cargo community is working diligently to employ the corrective actions necessary to keep cargo moving if at all possible.
In the event of an outbreak in the US or MX, the entire TOC team will be able to work remotely—the impact of an outbreak will be more significant on active warehouse handlers and employees and truckers/drivers
Some ports have announced slow down days. For example, in Baltimore, “Due to current declines in international container volumes, Seagirt Marine Terminal will be closed on the following days:
- Thursday, March 5th
- Tuesday, March 17th”
Another issue is the increase in rates for air freight shipments as flight cancellations are coming in from flights out of Italy and South Korea.
Other pricing impacts, among others but not limited to:
- Recovery adjustment surcharges for exports from US to all worldwide destinations (widely published since last Friday 28th)
- Import – Equipment Imbalance Surcharge
- Emergency Surcharge for Inland Pickup in Europe
The best thing that TOC can give our customers—and that our customers can give us—is information. We will continue to advise on equipment availability, sailings and the conditions at the ports. In return, we kindly ask our customers to continue to be as transparent and forthright with us in their forecasting, production schedules and equipment and space requirements.
While we do not control the carriers or the equipment they are responsible for positioning to move cargo, by giving them the best possible information we can try to protect and ensure that TOC and ProTrans customer bookings are accepted, containers are available and cargo sails as scheduled.
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