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Congestion continues to plague the container shipping markets. Logistics giant Kuehne & Nagel’s new Global Disruption Indicator shows that global teu days spent waiting was 11.56m on January 19 not far from a peak of around 13m at the end of December. The cycle time for ships going from port A and back to port A remains high. The Flexport Ocean Timelines Indicator, which measures elapsed cargo days from production line to delivery, has expanded from 50 days in 2019 to 110 days in January this year. On January 20, Yantian port, on the Pearl River Delta, restricted the number of laden containers that can enter the port, and allowed containers to enter only up to four days before they are due to be loaded, to ease quayside congestion. Yantian says that the number of ships arriving has fallen by 40% this month and delays have risen to more than seven days on average. Container terminal operators clearly have much investing to do as they have not kept pace with the growth in global lifts or the increasing complexity of intermodal transport. Liners and forwarders need to do more to increase the total number of shipping containers in circulation and increase the laden days per container. None of this can happen without more data, which points to further digitalisation. Box tracking and cargo monitoring is bound to grow in importance. Demand for ocean transport of containers is rising fast still. Basis data from Container Trade Statistics, about 1m teu more were being lifted every month in 2021 compared to 2019, with the 2021 average around 15m teu per month. Given that January and February are usually low points in the container year, it is reasonable to expect growing demand to further pressurise infrastructure during the rest of 2022. Hinterland costs continue to rise too, as logjams and rising fuel prices bite. In the US, DAT Freight and Analytics reports that the national average dry van spot rate on January 15 was $2.78 per mile, 63 cents higher than a year ago. Containerised imports to North America reached an estimated 3.02m for December, an all time record according to analysts at Shipping Strategy. The ongoing bottlenecks in the global supply chain continue to support containership freight and time charter rates, though some have come off their September 2021 peaks. The headline Freightos Baltic Exchange Global Average Rate was $9,680 on January 21 compared to $4,204 a year earlier and $9,293 a month earlier, indicating that the slide in the last quarter of 2021 has ended. Spot business may increase this year as Maersk leads the way on cutting contract availability to mid-size forwarders. This has left up to 4m teu of cargo already looking for spot availability, which may drive freight prices up again. China-US west coast has already risen 8% this year, opening at $14,070 on January 1 and rising to $15,145 three weeks later. China to North Europe has been steady at $14,365 on January 1 and $14,578 on January 21. Europe to east coast of North America has rebounded 14% so far this year from $6,197 to $7,045. American consumption is driving this market, which means that Chinese New Year may have limited impact this year on freight rates and volumes. If the pandemic recedes, demand may rise but debottlenecking may lower the heat in the freight market. Against that, the second half of each year is usually busier and more profitable. It makes sense for liner companies to limit contracts for now, because freight rates could just as easily rise as fall. In the time charter markets, the sub-panamax sector remains very firm. For instance, this month, MPC Container Ships fixed its 3,586 AS Nadia for a year with delivery in July 2022 at $61,000 a day. It has also fixed its 2,824 teu Carpathia to Pasha Hawaii for three years for $42,000 per day starting in September 2022. Greek owner Euroseas reports this month that it has chartered its 2,788 teu EM Astoria for three years from February at $65,000 per day for year one, $50,000 for year two and $20,000 in year three. The ship is currently completing a one-year charter at $18,650 per day. These are astonishing numbers which will motivate the liners to keep freight rates high enough to cover the cost of chartered-in tonnage. But as new tonnage joins the market from the second half of this year – with over 500 orders placed last year – this market surely will not last forever.

Congestion keeps box rates flying

Astonishing figures are being reported in the opening weeks of 2022.

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