As demand continues to outstrip supply, finding capacity from Asia to the US is still a major headache. It’s been a brutal few weeks—with more ahead.
The percentage of blank sailings for June now approaches blank sailings this time last year, when initial Covid turmoil slaughtered schedules. The current situation has inspired a bidding war unlike anything seen before.
Let’s take a look at what’s happening, so you can prepare as much as possible for severe disruptions.
Blank sailings slated for June could reduce capacity anywhere from approximately 25,000 to 75,000 TEU each week.
No one wants to hear this, but there will likely be more cancellations than what’s being announced. Additional cancellations may catch everyone off-guard, because they could be last minute.
The truth is vessels aren’t making it back to Asia on schedule, because of port congestion in the US and Europe. As a result, carriers have to rearrange their timing just like everyone else.
The port overwhelm isn’t just in the US anymore, either. While June sees Los Angeles and Oakland struggling with 1 to 3-week wait times, the port of Yantian is now causing delays on the origin side.
Yantian is the world’s fourth-busiest container port. A partial terminal closure, after a Covid-19 outbreak at the end of May, has led to disinfection and quarantine measures that slow productivity. Ships are skipping port calls there, and containers are piling up, placing further pressure on container availability worldwide.
It’s ugly out there right now. With vessels booked for months, last-minute space can command astronomical prices. Popular freight indices may underestimate what you really have to pay by several thousands of dollars. It’s basically a high-stakes auction at this point.
Diversifying shipping lanes as part of an overall route planning strategy could help, with some advance planning. And based on the current market, that’s more like well-in-advance planning.
Volatility makes business hard for everyone, so watch for solutions that may develop week by week. Follow updates, read blogs, and communicate your needs to your freight forwarder. With schedule reliability in flux, closely following the market for further insights is your best bet.
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