Shipping supply chain disruption cannot be resolved in a short period of time

Supply chain disruptions could last up to six months even after sea container trade returns to "normal" post-pandemic.

No one knows yet when pre-pandemic liner business will return to relative normality, but it will take several months of delays for the global network to return to pre-pandemic operations. That was the poignant message from John Fossey, senior analyst for container equipment at shipping consultancy Drewry, in a webinar hosted by the firm yesterday.

Container productivity has fallen by 20-30% due to labor shortages, anti-coronavirus measures, port congestion and full warehouses. Fauci said some of the containers are now being used to increase storage space and are therefore removed from the supply chain.

Although containerized trade grew by 6.5% in 2021, the highest level since 2009, it fell short of the 8% Drewry forecast last September. Analysts at the company have lowered their demand forecast for 2022 to 4.6% from 5.2% in September last year. Rising inflation poses a major risk.

Container holdovers and a rebound in trade have boosted container demand, driving container production soaring last year to a record 7.2 million TEUs, almost all in China. Later this year, two new manufacturing plants in Vietnam will start production, possibly adding another 1 million cases of capacity.

At the same time, airlines are spending a portion of their huge profits on new owned equipment, Fauci said, and their share of the fleet is expected to increase to more than 51%, reversing the marginal dominance of leasing companies in previous years. status.

Fossey expects new container prices and lease rates to rise to record levels in 2021, although some easing is expected between now and 2025. Tank container prices rose the most, from less than $13,000 in the fourth quarter of 2020 to $22,000 in the same period in 2021.

The rate of return on long-term container leasing has risen to around 10%.