Insufficient capacity, no extra space
In addition to high freight rates, this boom in the Pacific has also brought practical challenges. Shippers and logistics companies may have to wait up to four weeks to ship their containers from Asia to North America.
Carsten Trolle, Chief Executive Officer of DSV's American Airlines and Maritime Business, explained that simple bookings take longer to complete, so other routes and solutions need to be considered. He said the biggest problem at the moment is insufficient capacity.
The problems on the market can be traced back to the outbreak of new coronary pneumonia in many ways. As the market expects a sharp drop in demand, container liner companies have withdrawn a large amount of capacity from the market. However, the outcome of the matter was not so bad at all, but because shipping companies reduced the number of ships in operation, this resulted in an extremely hot container market, first in the Pacific region.
So much so that Trolle said that prices have been "out of control." He said: “Because there is no empty space on the ship at present, it has been delayed by two, three, or even four weeks. I cannot guarantee that the container will be shipped out because there are more containers than there are spaces.”
Several shipping companies are now redeploying tonnage in the Pacific. The latest news released by Maersk to customers on Monday pointed out the problem of too few containers and asked customers to return empty containers.
The Ministry of Transport of China has previously stepped in to inquire about the carrier's capacity and prices. The Washington Federal Maritime Commission (FMC) also held a meeting last week to investigate the situation.
At present, the three major alliances have pledged to resume suspension of the trans-Pacific trade route in October. In view of the recent continued strong demand for trans-Pacific routes, Maersk, one of the 2M alliances, announced last week its plan to resume the suspension of sailing from Asia to the west coast of North America. COSCO Shipping and its subsidiary Orient Overseas (OOCL) also Announced the resumption of suspension of trans-Pacific routes. At the same time, Hapag-Lloyd, a member of THE alliance, told customers that it will resume all remaining suspended voyages on trans-Pacific routes to the west coast of the United States in addition to five voyages next month.
Maersk has indicated to customers that the TP8 (Orient) and TP11 (Elephant) routes previously suspended in the second quarter have also resumed. At the same time, it is expected that the number of shipping interruptions during China's Golden Week this year will be lower than normal. Maersk said in its customer consultation that it expects strong imports to North America to continue until at least November.
Source: Shipping Network