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COVID-19 sparks' extreme storm 'in Global Shipping supply Chain

As the COVID-19 continues, shipping companies continue to face overstocking and ship delays at ports, and international supply chains become increasingly tense, global trade is facing the risk of disruption.

 

 

The container shipping industry, a pillar of global trade, is under severe pressure from a combination of threats to staff health, isolation measures and the need for social distancing, soaring consumer demand and factory disruptions caused by blockades in some countries and regions, shipping companies say.

 

Lars Mikael Jensen, head of east-west routes and marketing for Maersk line, said: "The global container trade is facing an 'extreme storm'.Outside Asia -- the US and European markets have seen increased demand for restocking, while COVID-19 has not yet been contained globally, there is insufficient capacity for ships, containers, card collection, and ports, warehouses, and terminals to operate efficiently, which has had a serious impact on global supply chains."

 

Lars Mikael Jensen: "The congested ports, the ships having to wait in the anchorage, the shipping schedule is delayed, and this creates a vicious circle in the logistics supply chain."

 

The situation at LA and Long Beach, two of the busiest container ports in the US, was included in the report by the Marine Exchange of Southern California on Tuesday, when 17 container ships were moored for berths.Four more ships are due to arrive later in the day, but only three will make it into port.According to the latest available data, the port imported a record 506,613 containers in October, up almost a third from the same month last year.

 

Rolf Habben Jansen, chief executive of Hapag-Lloyd, said: "The current market situation is very special.A sustained COVID-19 outbreak could quickly disrupt port terminal productivity by forcing large numbers of workers into isolation.We've already seen an example of 600 people being quarantined at the port, and within a week, 10 ships would be unable to reach shore."

 

Separately, CMA CGM announced last week that it would not take new bookings until the last week of December, but Philip Edge, chief executive of Edge Worldwide, a UK-based freight forwarder, said the delay "will only compound the problem" and lead to higher freight rates later.

 

In fact, pressure has been building since COVID-19 began.As the epidemic began to spread, global trade shrank at an unprecedented rate and shipping companies canceled hundreds of shipping dates.As trade has rebounded in recent months, so has demand for goods shipped from Asia, and shipping lines are operating at close to full capacity.Spot rates for container Freight have doubled since the middle of the year, according to the Shanghai Containerized Freight Index, driven by COVID-19 and a boom in cross-border e-commerce.Freight rates from Asia to the US west coast have risen sharply in recent months and are now at record highs.

 

Although Heberot has increased capacity by more than 250,000 TEU this year, Mr Haben Jensen says the damage associated with the outbreak continues: "Too many containers were put in the wrong place because of the chaos earlier this year."