[100421.EN.BIZ] Irate Customers Rush For Capacity As Maersk Suspends Contract Bookings

 

DANISH shipping giant Maersk's decision to "temporarily suspend" spot and short-term contract bookings from Asia following the Suez Canal blockage have left forwarders and NVOCCs scrambling for alternatives, reports The Loadstar of UK.

The carrier said it estimated a loss of capacity across its network of up to 30 per cent "over multiple weeks", in addition to equipment shortages in Asia.

One UK forwarder said although he appreciated the difficulties for Maersk, he was "shocked" it had decided not to honour its short-term contracts.

"Spot is one thing, but we had a price and a volume agreed with Maersk for three months, which they are now apparently ripping up. We expected to be rolled, but not have our contracted bookings refused," he said.

Maersk makes no secret that it sees its future in increasing its share of the stable long-term contract business, compared to the extreme volatility of the spot market.

Maersk's booking stop on its spot and short-term contracts will force shippers into the arms of carriers that have less commitment to annual contracts and will likely be able to command higher spot rates.

"They might choose different ways on how to manage their booking intake - but will face the same types of constraints," said Lars Jensen, of SeaIntelligence.

He suggested some carriers would choose to accept bookings and "subsequently apologise for having to roll the cargo for a week or two".

Freightos research lead Judah Levine said: "The reduction in capacity and the resulting shortage of containers back in Asian origin ports could put renewed pressure on ocean rates."

And Forto, the Berlin-headquartered digital supply chain platform said that, prior to Suez, it had been "assumed that the enormous increase in freight rates due to the pandemic would slowly calm down in Q2.

"Now a further increase is to be expected, which will certainly continue until Q3," it said.

Meanwhile, only around a third of Asia-US east coast volumes transit the Suez Canal, thus the impact on the transpacific tradelane will be much less than for Asia-Europe, however there will be an indirect impact from the snarl-up of equipment.

Source : HKSG.