The changing buying habits caused by the pandemic have created unprecedented peaks and newdemand patterns in global trade. This has given rise to significant bottlenecks to the entire shipping industry.
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Following a busy fourth quarter in 2020, the new year has begun with continued strong demand for cargo on TAWB. This volume increase as well as soaring demand from Asia causes issues with equipment availability across Europe, where empty boxes are turned back to Asia to fulfil demand moving on record-high rate levels. By comparison with Transpacific Eastbound (TPEB) and Far East Westbound (FEWB), where rates have skyrocketed by 300-400% (Source: Drewry World Container Index) compared to pre-pandemic levels, TAWB rates have increased by only a few dozen percentage points to date.
The equipment deficit is most severe in Turkey, Germany, Italy, Spain and Portugal for both Dry and Reefer containers. Some carriers have implemented a temporary booking stop due to lack of equipment and in an effort to recover schedule integrity. In particular, Hapag Lloyd in Germany and central Europe and MSC from selected Mediterranean origins to selected destination ports in the US and Canada. Carriers are expected to resume booking acceptance in March.
Due to the large surge in volumes, labour shortages and bad weather conditions, several ports around the world are heavily congested. In particular, Felixstowe and Southampton at the origin side, and Savannah, New York and the US West Coast ports at destination are showing increased waiting time and reduced productivity, leading to pressure on shipping capacity.
Strong demand fills up space on vessels up to 6 weeks before ETD. Despite the high demand outlook, there is no upcoming capacity upgrade in the near term due to a saturated charter vessel market.
Vessels are waiting for a berthing slot at ports significantly longer than normal leading to ships being behind their schedule, in many cases by more than a week. Given the relatively short duration of the Transatlantic service loops, the delay that vessels accumulate on their journey effectively produces blank sailings, soaking up large amounts of capacity.
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