Container shipping 2021 to date

From December 2020 there has been a surge in container shipping demand that has affected all trade lanes worldwide to a large extent.

We are still passing through a perfect storm of ships initially taken out of service at the start of the pandemic for refurbishment and container orders cancelled as the expectation was that Covid would cause the market to collapse. The reality was the opposite with the majority of people still working, many from home and with a lot of new disposable income due to a lack of commuting, holidays & socializing costs that they would normally spend a lot of money on.

The result has been that the market has increased by 5-6% rather than contract by roughly the same amount as was predicted. Another factor that has compounded matters is that ports have had their capacity restricted due to staff social distancing measures. The UK ports have been especially affected, Southampton for example at one stage had ships queuing to unload for up to two weeks, though this seems to be easing considerably. Recently Hamburg port seems to have had the same problems, though not as serious as seen in the UK, with one ship taking a week to unload rather than the normal 2-3 days, which wrecked our container delivery plans. This does though seem to be a short-term issue for Hamburg. It is also worth pointing out that the USA is the same, with the average wait at anchor for a ship from China to be unloaded being 7 days in April 2021 which amounts to a lot of ships and containers out of circulation.

Space remains tight and rates reflect the current lack of space with shipping lines in effect auctioning space weekly in China, whilst suspending all contracts negotiated in Europe. Controversially they have been cancelling bookings made weeks in advance if rates have subsequently increased then re-selling the same space. This space crunch is affecting companies across the board and as noted in an article in The Times today a third of washing machines are out of stock at ao.com, the country’s largest white goods seller. Similarly, 3 out of 5 printers are out of stock at printerbase.co.uk, a large specialist seller of printers also due to lack of supply.

This picture is not uniform though with the crunch currently being felt at the ports of Ningbo and Shanghai where space is at an extreme premium, Qingdao is less affected.