October 23, 2020
Rogue Wave? An Update on the Extraordinary Peak Happening in Ocean
We all know 2020 has been a tough year. The pandemic threw a wrench into global trade but it didn’t succeed in shutting it down. Now, however, crazy conditions like ‘Shipageddon’ and an unusual super peak happening in ocean are surfacing—just when we thought peak season was leveling off. Following are some observations and insights regarding current market conditions.
Demand has outgrown supply since May and severe space constraints are evident. Normally, after Golden Week, things slow down through November. But with the present circumstances, this will likely continue up to Chinese New Year (CNY).
Until now this never-ending peak season has been driven by carriers’ blank-sailing programs. But, things have changed: Nearly all capacity is fully deployed and the space constraints are predominantly due to record-high demand and container equipment shortages out of Asia. As a result, it is taking longer from Cargo Ready Date (CRD) until cargo is finally shipped, which shows that supply and demand are becoming even more imbalanced.
That imbalance is amplified by terminal and warehouse congestion, chassis shortages, and COVID-related workforce issues, which is resulting in equipment being held back at destination. In fact, many carriers have even reduced US export volume to trim the turnaround time of equipment back to the main ports.
This challenging situation underscores the need for transparency and agility to shift gears and switch to alternative plans. Read more about how Flexport Ocean Services can help tame rogue waves and keep shipments afloat.