Container shippers plan for Lunar New Year disruption
Ocean supply chain problems such as high rates, COVID-19 outbreaks and port congestion continue to grow. It is common practice that factories shut down during the Lunar New Year, and this is likely to cause further restrictions for some shippers. In previous years, many workers travelled over the holiday period to visit family, however this may not be allowed due to the zero-covid policy in place.
Shippers are planning ahead to avoid any potential disruption, as shown by a survey conducted by Container xChange. Data shows that 60% of respondents said that they have placed orders early this year ahead of the Lunar New Year festivities. Some of them are also using shipper-owned containers, splitting multiple containers or buying more equipment.
The reduced output in Asia may also allow for some pressure to be lifted on the industry, according to Johannes Schlingmeier, Container xChange CEO. Schlingmeier said that “it could allow container lines to get vessel schedules in slightly better order which could improve the equipment availability situation globally and especially in China.”
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Plans for a green corridor for the world’s busiest trans-Pacific shipping lane
The ports of Shanghai and Los Angeles, along with shippers and cargo owners, are planning to switch to zero-carbon fueled ships by 2030, as well as reducing emissions along the world’s busiest container shipping route. An implementation plan for the green shipping corridor is expected to be delivered by the end of the year.
This partnership is focused on the adoption of low- and zero-carbon fuel ships throughout this decade, with the first ship of this kind expected to set sail in 2030. The trans-Pacific corridor is the busiest container shipping lane in the world, making it an ideal shipping lane to focus on for one of the first green corridors, C40 Cities said.
The cities of Shanghai and LA and C40 Cities initiated the Green Shipping Corridor, and the project has many members, including A.P. Moller – Maersk, and Aspen Institute’s Shipping Decarbonization Initiative. Dan Porterfield, president and CEO of the Aspen Institute said that “it is inspiring that the U.S. and China have come together in this way to address the climate impact of this crucial global industry.”
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Air cargo challenges and high rates set to continue
The recent World Cargo Summit’s Air Cargo Market Update and Outlook shows that strong air cargo rates are set to continue for 2022 and possibly beyond. Niall Van De Wouw, managing director at CLIVE Data Services, said the company’s data comparing the fourth quarter of 2021 to the same period in 2019 showed that rates continued to increase on a global level, on average two and half times as high as pre-Covid.
Covid-related labor shortages have also proved to be challenging for the industry. Abel Alemu, managing director, Ethiopian Cargo & Logistics Services noted that this “will keep capacity tighter for longer” and this may result in “persistently elevated airfreight rates.” Alemu also pointed out that ground handling staff shortages are particularly worrying.
Air cargo congestion has been fueled by the ongoing ocean freight issues among other things. The industry has no control over these factors, so uncertainty over the sustainability of growth remains, said Van De Wouw. He predicts that “things will get worse” before they get better, until flight frequency increases, which may not happen for some time.
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