From Evergiven to the heaps of magnificent California harbors
This year was the year of the shipping queue for container ships waiting in line for weeks on the Suez Canal or off the coast of Los Angeles / Long Beach, Savannah and Shanghai.
COVID has played a major role for the second consecutive year. It is spurring a recovery in import demand in the United States, a stagnation in port operations in Asia, and an unprecedented rate boom for liner operators and container ship owners.
The following is a review of the 2021 coverage of container shipping by American shippers, one of the most important years in the history of this sector.
Evergiven stuck in Suez
Evergiven was stranded sideways on the Suez Canal on March 23, blocking traffic in both directions for six days. More than 350 vessels were anchored and waiting at peak times (The story here).
The world is fixed.
Evergiven has become a social media meme (The story here) In the surreal waves of tweets and TikTok videos. The needy shipper faced a few weeks delay in shipping to Europe and the East Coast (The story here).
LA / LB logjam
The Evergiven accident turned out to be a side show compared to this year’s main event, US supply chain congestion. Imports reached record highs in 2021 as a whole (The story here), And backups range from national ports to their inland transport. The epicenter is Los Angeles / Long Beach, which processes 40% of US imports.
The line of ships waiting at the anchorage off Southern California exceeded 30 in January (The story here) And peaked at 40 on February 1st. Previous records of anchoring vessels off Los Angeles / Long Beach during the 2014-2015 labor dispute exceeded by April (by April).The story here).
The procession fell to the lowest of only nine container vessels in late June, spurring expectations that congestion would be overcome. As the peak season surged, that hope was quickly shattered. The number of queues started to increase again. The record for February 1 was exceeded by the end of August (The story here).
By late October, 80 container vessels were waiting at more than double the level of the first quarter (more than double the level of the first quarter).The story here). By early December, 96 (The story here) And by mid-December 102. As of Saturday, 97 box-shaped vessels were still waiting at sea.
The fallout from the Evergiven incident lasted for several weeks. The situation in LA / LB has been going on for a year now and there is no end to it.
Stratosphere container charges
The high demand that caused the port congestion also increased fares (The story here). In addition, as freight rates rose, so did the demand for charterers, and charter fees reached record highs.
According to transportation consultant Drewry, spot rates on the West Coast of Asia (excluding premiums) have more than tripled from $ 4,000 per unit worth 40 feet earlier this year to more than $ 12,000 per FEU in mid-September. ..
After that, the price was reduced, but not so much. They have stabilized and are now back again (The story here).
Charter fees have also risen throughout the year. Short-term interest rates peaked in September at an astronomical $ 200,000 per day (“The story here). Like the spot rate, the charter rate has been pulled back from its peak, but is now rising again (The story here).
Soaring fares are Maersk (The story here) Zim (NYSE: ZIM; The story here).
Drewry predicted in July that liner shipping would make $ 100 billion for the entire year. In October, Drewry raised its forecast for this year to $ 150 billion and further to $ 150 billion in 2022 (The story here). This month, Drewry raised its 2021 forecast to another $ 190 billion.
Reiner uses huge plunge profits to pay off debt, return capital to shareholders, and grow the company. Some carriers are expanding into logistics, technology, and air freight (The story here).
Government intervention
As port congestion worsened, there were concerns about shortages and out-of-stocks affecting American consumers (“The story here). Soaring fares have spurred concerns about inflation (The story here). As a result, the supply chain crisis has gained a higher political position and has attracted attention from both Congress and the Biden administration.
The House of Representatives introduced the Maritime Transport Reform Act in August and passed the bill this month (The story here). The Senate is currently preparing a companion bill.
If the law is enacted in 2022, it will transfer the burden of proof of detention and delinquency charges to the carrier, making it more difficult for the carrier to refuse US exports. Lars Jensen, head of consultancy Vespucci Maritime, warned that “please be aware of what you want” and argued that such a law could have serious unintended consequences ()The story here).
Meanwhile, the ports of Los Angeles and Long Beach, backed by the Biden administration, threaten to impose highly controversial charges on long-stay import containers (The story here When here).
The tariff was announced on October 24, but implementation has been delayed since then, and port authorities have made progress. I was late 7 times on Monday. The number of long-lasting containers has dropped significantly since the plan was first announced, but progress has been stagnant recently (The story here).
China, Asia, COVID
Beyond Evergiven, the major developments in container shipping this year have its roots in COVID. That is, changes in purchasing patterns, government stimuli, or pandemic precautions that disrupt the supply chain.
In addition to the import effect (US port congestion and record high freight rates), it also had a significant impact on Asian exporters.
China has emerged as one of the biggest winners of the COVID era due to the surge in export demand (The story here). China also benefits from almost complete control of container equipment manufacturing. Only 3 Chinese companies manufacture 8 out of 10 new containers (The story here).
Major risks to the United States, which is highly dependent on imports: The occurrence of COVID in other Asian countries such as China and Vietnam can have a significant impact on the entire Pacific Ocean.
This year’s turmoil includes the closure of China’s Yantian Harbor in June (The story here); Closed factory in Vietnam in July (The story here); And in August, China’s Ningbo port was partially closed (The story here). In September, a factory in China was shut down due to a power shortage (The story here), The line of container ships off Shanghai and Ningbo is larger than the line of container ships off Los Angeles / Long Beach ()The story here).
Unlike the United States, China has a “zero COVID” policy. That is, in very few cases it closes the entire city and harbor. Given the high prevalence of Omicron variants, China’s policy could lead to the closure of more ports in 2022, reflecting what happened in the salt pans earlier this year. Omicron can also expand the consumer buying patterns seen in the first two years of the pandemic and keep fares high ().The story here).
As with 2021, the top shipping stories in 2022 may be primarily related to COVID.
Click on other articles by Greg Miller
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https://ift.tt/3429c1D From Evergiven to the heaps of magnificent California harbors
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