Only slowing demand can solve Asia's container backlog

        Freight forwarding Worldwide Logistics said that unless trade volume slows, ports on both sides of the Pacific will not be able to alleviate the current congestion that is damaging port facilities.

　　 Due to the cargo backlog, Asian ports are running out of space and equipment. The backlog of about two to three weeks is hurting ports in China and Southeast Asia. Jon Monroe from all over the world said that these ports were “far behind” and could not keep up with the increase in demand before the demand for goods fell.

　　 I once heard that the ship was not fully loaded. Think about it, if they delay orders because they do not have equipment, the backlog of orders will only cause greater congestion and extend the backlog time of orders. Currently, there are two to three weeks of container backlog at Asian terminals.

　　Monroe said that in some Asian ports, the lack of equipment is so serious that even those shippers who have purchased quality services cannot find containers.

He went on to explain: "Shipping companies have used this pandemic to increase freight rates and add new freight rates because it is difficult for companies to bring products to the market at high prices. Some importers simply ceased business. This year we saw a series of The introduction of surcharges has increased the spot level of FAK over all types of freight."

　　 According to Monroe, Hapag-Lloyd has suspended U.S. exports to China. He believes that "it is only a matter of time before other shipping companies follow suit."

　　 In addition, importers hold these containers until they are shipped back to the carrier. "Because the eastbound (U.S. import trade) container ratio is 2:1, and the westbound ships cannot hold so many containers, the remaining containers will only return to Asia when the volume drops." When the containers arrive in the United States At the time, a large number of importers kept the equipment for 10 to 14 days, making the average stay outside the terminal 8 to 10 days," Monroe added.

　　 Container Trade Statistics (CTS) shows that in the first eight months of this year, the container throughput from the Far East to North America dropped by 2%.

Darron Wadey of the Dutch consulting firm Dynamar said in an interview with Container News: "The capacity of the trans-Pacific route is contrary to our intuition." He said the data showed that from September 19 to August 20, the east coast of the United States The capacity of the United States increased by 16%, while the capacity of the West Coast of the United States increased by 8%.

　　 Normally, lower demand will lead to lower interest rates, but Wadey said, "We can see that this did not happen."

　　 Dynamar believes that there are two potential factors to consider. First, the capacity calculation assumes that the service runs at full intensity and frequency.

"As we know, shipping companies manage (trans-Pacific) capacity by cutting one route, one route, and another. Therefore, the capacity "growth" observed in July 2020 is virtual, not actual. Yes, and it’s actually overestimated. By canceling skipped voyages, the comparison of supply/capacity in 2020 and 2019 should be closer to parity, although parity is unlikely,” Wadey said.

　　 Demand fluctuations also played a role. There was a significant difference between the first 4 months of this year and the next 4 months.

         Wadey explained that, according to CTS data, compared with the first four months of 2020 and the same period last year, trans-Pacific traffic dropped by 9% year-on-year, but from May to August, the traffic volume actually fell year-on-year. An increase of 4%.

         Coupled with the problem of container logistics-we don't think there is a shortage of containers themselves, but they are no longer where they are needed-this may explain why Far East-U.S. freight rates will rise; after April 2020, demand growth will be much higher than Capacity development.

　　According to an analysis by Dynamar, changes in house prices from the Far East to the West Coast of the United States reflect these changes in transaction volumes. Dinard said that in the first 17 weeks of 2020, as of the end of April, house prices fell by 11% year-on-year. Since then (until week 43), it has risen by an average of 105%.

　　 "Similarly, the latter situation can only be the result of sales rebound and capacity management during the four-month period, and equipment availability problems have exacerbated all this."

　　 Monroe seems to admit that Dynamar’s analysis believes that the container imbalance is not caused by the surge in container demand, but by the ship operator. "If the shipping company did not continue empty shipping and the containers started to jam at the docks of origin, the situation would not get so bad. They knew what they were doing, and they had done it before," he claimed.