China box congestion spreads

China box congestion spreads

Congestion at Chinese boxports is spreading causing serious headaches for shippers. Moreover, authorities across China are telling Splash there’s little chance of the container traffic easing this month.

According to a notice Maersk Line has sent to its clients, in addition to Shanghai’s Yangshan Port, major ports in China including Qingdao Port and Ningbo Port are also facing congestion and high yard density issues.

“We are closely working with Chinese ports to address any operational challenges, and we have been able to maintain a very constructive dialogue with our terminal partners to ensure Maersk Line existing priority. In order to maintain the stability of our ocean network, we will put contingency actions in place in the coming month including consolidating volumes and reducing port calls if this is required temporarily,” Maersk said in a statement.

Several major liners including Hyundai Merchant Marine (HMM), MOL, Yang Ming, OOCL also said in notices to clients that they are short of empty containers due to the congestion.

A spokesperson at SIPG, Shanghai’s port body, told Splash that the group couldn’t guarantee that the congestion problem will be solved in May.

An official at the China Shippers’ Association said that apart from previously reported weather and new alliance structures, the congestion has also been worsened by other issues.

“The Three Gorges Damn suspended navigation for maintenance in March, and hundreds of vessels were blocked in the upstream of Yangtze River and these vessels all went out when the ship lock opened, which intensified the congestion at the downstream ports including Shanghai,” the official said.

“Also, the shipping lines increase their rates in May, and many shippers tried to ship cargo before May, which also intensified the congestion in the short term,” he added.

According to Drewry’s latest Container Intelligence Weekly, China’s top 10 ports collectively experienced a 6% year-on-year jump in throughput in the first quarter of 2017 and the ports facing the worst of the congestion registered the biggest gains: Qingdao (12%); Shanghai (10%) and Ningbo (9%).

Drewry has found that fast growing inbound trade, bad weather, the restructuring of alliance networks, bigger ships and shippers’ eagerness to move cargo ahead of planned rate increases have all been mentioned as the reasons for the congestion.

“One theory is that Chinese ports are experiencing a sudden spike in traffic because shippers want to move cargoes ahead of expected spot rate hikes and higher annual contract terms to Europe and North America that will kick-in around May, there might be some validity to that theory, but an examination of recent trade statistics shows that China’s demand resurgence is not an overnight flash in the pan with a significant increase to both exports, and especially imports, seen since August of last year,” Drewry said in the report.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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