China Lockdowns US West Coast Congestion Pressure Shipping Lines Cover

China Lockdowns & US West Coast Congestion Pressure Shipping Lines

A combination of Covid lockdown caused delays in China and congestion along the east cost of the U.S. has forced alliance carriers to announce blank sailings on transpacific routes, which is placing heavy pressure on smaller independent lines.

The news of the blank sailings follows on last week’s reports of skipped sailings to Europe while carriers attempted to mitigate the effects of the Covid lockdowns in Shanghai that have lasted over a month.

Initially carriers recommended shippers deliver containers to ports not impacted by lockdowns, but that has been increasingly difficult to do as lockdowns have been imposed on a growing number of cities.

Data released last week shows a significant contraction of factory activity over the previous month, which means its anticipated that even when the lockdowns end it’ll take time for manufacturers to reach pre-lockdown output.

Furthermore, expert bookings out of China are at about 50% of normal. This has pressured ad-hoc and newer carriers from pushing ahead with business plans. That’s because many of these carriers rely on the spot market for bookings.

Retailers attempting to launch their own standalone services between Asia, Europe, and the U.S. are facing difficulties. According to brokers, some of the ships for the retailer standalone services have been sublet to major shipping lines because its more profitable.

As carriers continue to cancel voyages, such as Maersk and MSC canceling four Asia-US voyages during weeks 21-25 and Maersk stating that, “Our Asia-North America network continues to accumulate delays due to terminal congestions and vessel incidents,” it’s anticipated that some cargo while shift to the airlines.

“I expect possible ex S.E. Asia export air cargo to increase from the China lockdowns seeing as there’s less cargo and less vessels to export the products,” commented Stefan van der Sluys, CEO of Best Global Logistics Thailand.

BGL will continue to monitor the transpacific traffic situation and provide timely updates to its customers as the situations progress both at Chinese ports and along the U.S. west coast.

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