Paul Edwick has been using ocean freight in his giftware business for over 20 years, and has heard all the excuses in that time. Opinions are his, and his alone – he is always pleased to hear counter views, and make corrections where facts are wrong. He can be contacted through LinkedIn and on email@example.com
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A year ago, just before Chinese New Year, I remember seeing an article from Bloomberg (or similar) reflecting on ocean freight rates, lack of containers and how the author expected it would come right after CNY 21. As we know, rates went on up higher, service levels went down lower, and the shipping lines have gone on to report ever more profit. So, what about this year’s predictions.
We use three lanes out of China to USA, Europe and Australia. Transit times are near normal – assuming we don’t get held at anchor outside NYP, a dangerous assumption as I check MyShipTracking.com.
So, what’s going on? It’s quite simple really. Averaging transit times on the major routes to West Coast and East Coast USA with those to Europe, a single ship used to make 5 round trips a year. These days it is not much more than 3 round trips – which with constant tonnage equates to reduction of a third in effective, usable capacity.
So where is all of this lost time going?
My 89-year-old mother lives opposite Felixstowe, the UK’s biggest container port. Last August, with sharp sight after her double eye cataract operation, my mother called and said that she had never realised that containers are kept in cages on board ship to stop them falling off. I had no idea what she meant, but then like my mother I had never seen a partially loaded container ship leaving port. Unless you are a docker, the only way to know about these cages is to see ships going to sea with 50-60% of capacity in use.
Later in the fall, UK media was showing huge piles of containers – thousands of them – on a disused airfield near Felixstowe. And we have plenty more disused airfields with their own piles.
Of course, this makes no sense – ships leaving less than capacity with masses of containers left behind.
Los Angeles and Long Beach were different, but the effect was the same. Getting containers to the railhead changed from a 4-day turnaround to, at worst, 67 days on one of ours. Shunted around yard after yard before eventually being loaded, there is little space to clear the empties back to China.
If that all seems implausible, the next step takes time wasting onto a new level. A Rotterdam container 3 weeks late out of Yantian arrived on its delayed schedule. What happened to that ship after the first call beggars belief. Onto Antwerp, back to Rotterdam and then ping-pong twice more between those same ports before leaving for Southampton where it went in and out of port 3 times before setting off back to China. Almost 3 weeks was lost in this dance around ports all within a day’s sailing of each other.
Will 2022 put this mess behind us
The people to sort this out are the same people who are minting profits out of the shambles.
Containers piled in the wrong place, ports clogged up, and ships making schedules were the word sub-optimal does not do justice. Until these basic handling and scheduling issues are fixed, costs stay high, service levels stay down and everyone else pays to mint those massive profits the shipping lines now see as all too normal.