Global
Shippers’ Forum (GSF) director James Hookham has enlisted the help of
consultants to find the missing tonnage, while Xeneta’s chief analyst Peter
Sand believes he may have found some of it at least.
It is not easy to hide an ultra-large
container ship (ULCS), let alone hundreds of them and therefore shippers are baffled as to why there is a capacity shortage
on the extended Asia to Europe trades that is now sending ripples through
supply chains around the globe and sending freight rates through the roof.
146 ships are due for delivery in Q2
according to MDS Transmodal yet Xeneta expect spot rates to rise to $5,170 per
feu on 1 June, up 57% within this month, while East Coast freight from Asia
will increase 50% to $6,250 per feu.
Asia to Europe spot rates are also
climbing steeply, up 63% in May to North Europe, $5,280 per feu, and $5,985 per
feu to the Med, up 46%.
“On 1 June,
spot rates will reach a level we haven’t seen since 2022 when the Covid-19 pandemic was still
wreaking chaos across ocean freight supply chains,” said Sand. He added: “There
is a cocktail of uncertainty and disruption across global ocean freight supply
chains at present and this is fuelling the spot rate increases.”
Volumes into regions not previously
thought of as high import regions, such as the East Coast of South America,
East Africa and the Middle East are seeing huge volume increases according to
Sand, who emphasised, “there are a lot, a lot of boxes going into the Middle
East”.
It is unclear exactly what is
happening, but one theory is that “China is expecting more tariffs after the US
elections, whoever is the president,” said Sand, “so that could be the case,
but it is difficult to verify.”
A more prosaic challenge that has
added to the global congestion was the carriers’ early response to the Red Sea
crisis. Sand believes that in the early stages, in an attempt to maintain
schedules ships were cutting port calls at Yokohama and Busan in Asia and again
in Gdansk and Hamburg. With ULCSs
entering fewer ports they were discharging and loading more containers at the
terminals that they were calling at.
“Jumbo ships are the problem, ports
and terminals are better at handling more calls with less cargo, keeping an
even flow,” explained Sand.
Since the Red Sea diversions have
taken place some key ports have not only had to deal with larger amounts of
cargo, but also an increase in vessel traffic as feeder ships are necessary to
process the increased transhipment cargo.
Hookham does believe that shippers
“are looking to get ahead of the challenges, to have a better peak season.”
That said, shippers were not
expecting the scale of rate increases that they are seeing now, and are
wondering what has happened to the “glut of capacity” that has already been
delivered?