On Monday (6th), foreign media used multiple charts to interpret the status of the global shipping supply chain after China’s unblocking. Analysts worry that after China fully unblocks, the tsunami of container ships will flood global routes such as Europe and the United States.
China’s Shanghai will not be fully unblocked until mid-June. Currently, it is restricted by the “dynamic clearing” epidemic prevention policy. The Beijing authorities strictly control inter-provincial travel, and truck transportation continues to be blocked, slowing down the development of China’s manufacturing and logistics industries.
The chart below shows that China’s shipments to the U.S. so far in May are 30% lower than the same period a year ago, despite the lifting of lockdowns in Shanghai, China.
This comes at a critical time for U.S. West Coast ports, with the annual contract between International Terminals and Warehouse Union (ILWU) workers and the Pacific Maritime Association (PMA) expiring on June 30, and West American dockworkers are negotiating a contract swap. If talks break down, the risk of strikes at the West American docks escalates. U.S. importers readjusted their supply chains first, leading to a worsening of the backlog of goods at ports in the east of the United States.
According to Peter Sand, an analyst at Xeneta, a Norwegian freight rate analysis platform, the volume of imported containers transferred from ports in the eastern United States has hit a new high, while the freight rate in the spot market for container shipping is still at an all-time high.
Bethann Rooney, director of operations at the Port of New York and New Jersey, revealed that the port is expected to see a surge six to eight weeks after China reopens, with imports from China accounting for 29.6% of the total port of New York and New Jersey, while the Port of Los Angeles Imports at the Port of Long Beach and New York are twice as high as those of New York and New Jersey, and it will be difficult to absorb the surge in container volumes that follow if the container delays are not reduced or the containers are emptied in the coming weeks.
MarineTraffic general manager Alex Charvalias said the Port of Savannah, Georgia, was severely overcrowded with containers and the situation was deteriorating, with each ship spending up to 10 days in port on average.
The chart below shows that on-time arrivals have improved in 2022, but are still only significantly worse than the performance between 2019 and 2020.
Andreas Braun, director of marine products at Crane Worldwide Logistics EMEA, said European exporters were facing a shortage of empty containers for export, but there were fears of a strike in Hamburg, Germany’s largest seaport, as terminal operators and intermodal operators became more involved. The coordination is getting worse and worse, and the situation in German ports is expected to deteriorate
Braun pointed out that once the backlog of goods in China is shipped globally, the port will get worse, there will be fewer empty containers and rail freight services will be disrupted.
Jacques Vandermeiren, CEO of Antwerp, the largest seaport in Belgium and the second largest port in Europe, recently said that after China restarts, the tsunami of container ships will submerge global shipping routes.
FreightWaves founder and chief executive Craig Fuller recently warned that the start of merchant shipping from China to the world would destroy everyone’s summer.