[230621.EN.BIZ] China's Inland Providers Fight to Clear S China Port Congestion

 

NEARLY three hundred missed vessel calls through the first half of June are leaving a growing backlog of loaded containers at Yantian International Container Terminals (YICT) that the fully stretched ports and logistics industry will take weeks to clear, reports IHS Media.

According to data from project44, 298 container ships with a combined capacity of over 3 million TEU skipped Yantian between June 1 and June 15, a 300 per cent increase in blank sailings compared with the first two weeks of May.

"Though the total capacity was not meant for YICT, it could take weeks to process backlogged containers, and shippers should expect serious delays," the visibility provider said in a statement last Thursday.

"The volume of loaded export containers that were left behind has caused a severe backlog and is due to create major delays and disruptions in global supply chains."

Estimates from industry analysts put the number of export containers waiting to be loaded by carriers in the Shenzhen terminals at 300,000 TEU.

Judah Levine, research lead at online freight marketplace Freightos, said the impact of the South China port congestion was being amplified by the entire containerised supply chain operating at a deficit, with no additional capacity to throw at the problem.

"For example, Freightos.com marketplace data show ocean shipments now arriving from China to the US took 42 per cent longer than last June, and this will probably get worse before it gets better," he wrote in a market update his week.

Rolf Habben Jansen, CEO of Hapag-Lloyd, also warned that with capacity already at the limit, there would be no speedy resolution to the South China congestion.

"Demand remains very strong at the moment, and I don't think we are going to get out of this very soon. Congestion will remain an issue for the coming months," Mr Habben Jansen told a press briefing recently.

Maersk in a customer advisory last week also pointed to the difficulties of handling the congestion in a container shipping environment already overwhelmed by strong and sustained global demand.

Yantian maintains its terminal operations are back up to 70 per cent utilisation, a figure also given by HMM in a recent customer advisory. Even at that improved level of productivity, a backlog of 11,400 TEU would be building every day, according to Jon Monroe, who serves as a consultant to trans-Pacific forwarders. He wrote in a LinkedIn post that with a 16-day wait for a berth, 60-plus vessels waiting, and scores of other ships bypassing Yantian, the backlog of boxes would be significant.

Yantian reopened a fourth berth at the East Port area, which predominately serves long-haul services, a move that has reduced the yard density to 70 per cent and allowed YICT to ease restrictions on laden export containers so gate-in is now permitted seven days before a vessel arrives compared with three days previously.

A YICT spokesperson confirmed that the number of trucks allowed into the terminal had increased to 8,000 per day last Wednesday, up from 6,000 a week earlier, and this would increase further.

"It is projected that full operations will be basically regained at YICT in the last week of June," the spokesperson said.

However, Maersk said although YICT gate activity was expected to soon reach the same levels as before the incident, schedule reliability would continue to suffer as the carrier was experiencing an average waiting time of 16 days "and counting."

The Asian rotations of 19 ships operated by the 2M Alliance of Maersk and Mediterranean Shipping Co have been affected, either cutting Yantian calls completely or reducing calls at the terminal as the carrier strives to maintain its schedules. Maersk expressed concern about congestion spreading through the Pearl River Delta.

Transshipment traffic on intra-Asia services to and from Thailand, the Philippines, Taiwan, and Vietnam has also sharply declined since the congestion gridlock emerged, with regional carriers instead calling at Dachan Bay and Hong Kong, shipping sources said.

Source : HKSG / Photo : Produce Report.