Container shortage remains serious

According to the Industry and Trade Information Centre under the Ministry of Industry and Trade, shipping firms’ reports showed that shipping costs in Europe would remain high until the end of the first quarter this year because of increasing demand.

High demand for shipping goods from China is producing high pressure on facilities at seaports in Europe. Marine shipping costs are expected to increase in February 2021. Shipping firms recommended goods owners to book the service as soon as possible to ensure that their goods would be transported as planned schemes.

Sources of service supply are reportedly limited, particularly when the COVID-19 pandemic is developing complicated in major markets. Logistic suppliers in Europe reported the shortage of frozen containers and 40-feet dry containers, especially in Germany, Italia, Spain and Portuga as well as the shortage of deports and terminals in Turkey.

Activities on the commercial route from Asia to North America between January and mid-February which coincides with the Asian Lunar new year celebration are usually slowdown. However, increased volume of goods to serve increased consumption during the festive period and the shortage of facilities led to serious congestions at major ports in Europe and the UK.

UK’s seaports so far have not solved the congestions. Delay rate increased in some important ports in northern Europe due to reduced capacity. In January 2021, the seaport congestions were not reducing on the west coast of the US, posing difficulties for transportation on EU-North America routes.

In a recent statement by the World Shipping Council (WSC), on January 18, 2021, more than 30 container vessels stayed awaited at the US’s San Pedro Bay due to congestions.

Delays in receiving and handling these ships will lead to delays in exports to the US and moving empty containers to Asia.

The congestion is so severe that some shipping lines have decided to temporarily stop arriving at ports of Los Angeles and Long Beach for some of the service routes, such as Hapag-Lloyd removed Long Beach from the route linking the Mediterranean area with North America.

Due to port congestion, two of the three east-west shipping alliances are suspending trips between Asia and Europe.

Specifically, the partners of the 2M Maersk Alliance and the Mediterranean Shipping Company announced the cancellation of 4 ships on the Asia-Europe route during the Lunar New Year in mid-February 2021. Hapag-Lloyd and THE Alliance will vacate one vessel per trip on the three Asia-Mediterranean links in late March 2021 and early April 2021 due to disruptions at some seaports as the pandemic is developing complicatedly.

Such decisions reflect a similar move by Hapag-Lloyd and THE Alliance on trans-Pacific trade. Hapag-Lloyd said the delays and disruptions have become so severe that they will vacate 21 trips between Asia and North America by February 2021 to restore schedule integrity.

Hapag-Lloyd has said it will skip trips on THE Alliance's MD1, MD2 and MD3 services between March 26 and March 2, 2021, as part of its rescheduling program to deal with serious port congestion and global shipping delays.

Hapag-Lloyd has listed alternative booking options for each available trip, and Maersk said it will secure alternative routes to minimize the impact on customers. Maersk said the removal of inefficient stops will contribute to restoring the continuity of the schedule in response to severe port congestion and equipment constraints in global supply chains.

Also due to congestion at ports in Europe and North America, data from Sea-Intelligence Maritime shows that the punctuality rate of carriers on Asia-Nordic routes has dropped to 40 6% in December 2020 compared to 83% in December 2019. The average ship delay in December 2020 was 6.4 days, an increase of 3.24 days compared to December 2019.

The punctuality for Asia-Mediterranean services ships was 40.5% in December 2020, down from 81.5% in the same month in 2019 and the delay time was 3.99 days while the recorded delay time in December 2019 was 3.61 days.

According to WSC, in Vietnam, the shortage of empty containers caused higher shipping costs. At the same time,  export volume usually increases sharply at year-end, making ships wait at some domestic ports.

Fortunately, the Government of Vietnam is controlling the COVID-19 pandemic well, so port congestions in Vietnam are not so serious as those in other countries. Goods owners in Vietnam have not had to pay Port Congestion Surcharge (PCS) while those in China, UK, South Africa, Australia and New Zealand are paying the surcharge. Besides, shipping firms still regularly send empty containers to Vietnam to serve export activities.

According to Vietnam Seaports Association, the volume of exported products via northern seaports ( hai Phong and Quang Ninh) and HCM City Port and Cai Mep-Thi Vai Port in the south in December 2020 increased 19.8 per cent and 5.4 per cent respectively compared with the same period of 2019. This is a positive signal for Vietnam’s exports in early 2021./.