Freight News, Sea

Don’t blame us for chaos, say shipping lines

[ January 14, 2021   //   ]

Ocean carriers are taking all available measures to improve the speed and efficiency of cargo movement and employing all available vessel tonnage, insists the World Shipping Council. The unparalleled disruptions to the international supply chain experienced over the last year are not caused by one party in the chain but the result of sudden and radical changes to the demand for goods due to the impact of the Covid-19 pandemic.

Shippers’ groups, including the UK-based Global Shippers Forum have been critical of the industry’s approach in recent months, and have called for the EU’s block Exemption for shipping line consortia to be reevaluated.

However, argues WSC: “ When demand dropped some 20-30% in the second quarter of 2020, carriers curtailed services and idled vessels. However, as cargo volume rose, carriers redeployed those assets as quickly as possible.”

It says that Alphaliner figures show that the inactive fleet was at just 2.5%, including ships under repair.

Further, says WSC, carriers are sharing capacity to maximize efficiency. “Vessel sharing agreements are extremely important during times of high demand for vessel capacity. They ensure that all available slots are used even when an individual operator does not have sufficient demand from its customers for a particular sailing. With a vessel sharing agreement, that capacity can then be made available to other partner carriers to offer to their customers.”

Contrary to some suggestions, carriers are not abandoning capacity investments for the future and the global order book for new container ships is now 10% of current global capacity. 

WSC points out that the pandemic has severely affected access to containers and equipment: “As inland transportation, port and warehousing operations have been hit by lockdowns, labour shortages and volume overloads, the positioning, use and return of containers within the global supply chain has slowed. In addition to maximizing vessel capacity, carriers are working to improve access to container equipment. They are speeding the repositioning of excess empty containers and purchasing, leasing, repairing, and dispatching all available containers. Unfortunately, more containers are simply not immediately available, so all steps must be taken to improve the utilization of the existing container fleet.”

Delays on land have a direct impact on carriers’ ability to dock and unload ships and to provide empty container equipment. WSC said: “It is important that all users of the equipment, including customers and inland transportation providers, promptly return empty containers in order to make that equipment available for the next customer.”

Despite action to increase vessel capacity, demand for capacity far exceeds supply which puts upward pressure on rates. WSC concludes: “Shippers and forwarders are understandably not pleased, but one must not forget that this is the same market fundamental that kept rates very low for several years. History shows that rates fluctuate over the years as supply and demand shift, moving from high levels fairly quickly as market conditions stabilize.”