Container Shipping Capacity In 2020

Throughout 2020 there have been cuts to container shipping capacity worldwide and from China in particular as shipping lines match supply to demand. Although demand has increased recently, it is neither easy nor straightforward for shipping lines to add additional ships, especially at short notice. It is anticipated that there will be a severe shortage of container capacity on ships from China to Europe especially, which will only ease after the Chinese New Year which starts in January 2021.

Plan Shipping In Advance

It is important to plan ahead and book container space at least 14 days prior to a ship departing, if possible. Many carriers are imposing surcharges due to this peak season, or, alternatively increasing their basic freight rate. On top of this you should expect to see congestion surcharges from Mid-November, as shipping lines seek to recover their costs for ships queuing to dock at congested UK ports – as per our previous news article.

Slow Unloading At Ports

We are also experiencing slower unloading of ships at UK, primarily due to restrictions on staff working due to the current pandemic. This means you should allow extra time from the ship arriving, to you receiving your container, or part load delivery. You may notice delays of between two and five days.

Air freight

Air freight is seeing a similar surge and as normally the majority of airfreight flies on passenger aircraft, (most of which are still not operating) there are also delays and rate increases as the backlog builds up. It may be the case that the sea freight situation is causing some imports into the UK to divert from sea freight to air freight and we hear (for example), Apple have decided to send all production by air for the time being, including their new iphone12. Therefore please prepare for longer transit times than you may have expected as well as increases in prices, at least in the short term.

For all Air Freight or Sea Freight enquiries, please contact us for help and advice.

The post Demand For Shipping Space From China Has Increased appeared first on K&L Freight.

Over Capacity Freight Shipping

One of the big causes of over capacity has been the increase in the size of ships, with all major carriers ordering ships in the 18000 – 22000 TEU unit size (TEU = twenty foot equivalent unit). To put this in perspective, ten years ago the biggest ships had a capacity of around 10000 TEU.

Logic would dictate that as the container shipping industry worldwide is not expanding to any appreciable extent and there is already over-capacity, it would not be sensible to order any new ships until some of the oldest ones came to the end of their working lives and were sent for scrap.

In 2016 this logic held good and there were no new orders of large ships of + 18000 TEU size. There was an overall increase net increase of capacity of 280000 TEU across the world though, all smaller ships used for feeder services and small trade lanes.

Orders Of Large Ships

In 2017 shipping lines decided that ordering large, new ships was a good idea after all and so 20 new ships were ordered over 18000 TEU capacity. Along with these large ships many smaller ships were ordered too so a total 671000 TEU capacity was ordered. This is way in excess of the amount the ships being scrapped and so there has been large next increase in capacity.

Whilst rates are holding up on the run up to Chinese New Year, which is no surprise to anyone in the trade, the excess in capacity post Chinese New Year is expected to put a downward pressure on freight rates.

If you would like to know more about shipping from China or anywhere else in the world, get in touch with our import and export experts on the phone on +44 (0)1606 ​272​ 880, via our contact form, or the instant chant button the the screen.

The post What is going to happen to sea freight rates in 2018? appeared first on K&L Freight.