6508
Views

Tight Ocean Freight Market Continues With No End in Sight

ocean freight
AAPA / Port of Los Angeles

Published Jan 6, 2021 9:29 PM by The Maritime Executive

The frenetic levels of containerized cargo movement that have driven freight rates sky-high will not likely end soon, according to a top Maersk executive. The leading ocean carriers are even planning to maintain a high level of capacity through the Chinese New Year - the low-traffic season that usually prompts a raft of blanked sailings. 

Ocean carrier tracking firm eeSea recently told the Loadstar that on all of the major trunk routes - transatlantic, transpacific and Asia-Europe - only two percent of head haul sailings have been canceled for next month, and less than one percent in the month after. Typically about one out of five sailings are blanked in February. This means that carriers are creating a big boost in available slot capacity relative to years past - though it still leaves unsolved issues with container shortages and port congestion. 

On Wednesday, AIS data showed about 30 container ships anchored off the ports of Los Angeles / Long Beach alone. The ports have been working to handle record volume for months, and the demand is not letting up: Los Angeles' volume forecast tool predicts a traffic spike of at least 50 percent year-on-year in the first three weeks of January (and 70 percent in the first week). 

The surge of cargo from Asia to the west has pinched the world's container supply as well, prompting carriers to return more empty boxes to China in order to meet demand on the highest-revenue routes. This has prompted complaints from some exporters in the U.S. and the EU, who assert that some carriers have restricted container availability or imposed unfair charges for containers in use.

“There are simply not enough containers in the world to cope with the current demand . . . The biggest gap between supply and demand right now is in the United States, followed by Europe,” Maersk CCO Vincent Clerc told Reuters on Wednesday. “It is really crazy how much we are moving at the moment, huge amounts."

Clerc predicted that there will not be much slowdown in demand in the near term, even though much of Europe is moving into lockdown. Consumers who are now stuck at home will likely continue to buy durable goods, keeping up demand for Asia-Europe shipping, Maersk predicted.