Equipment shortages could remain a feature of the container shipping landscape for up to two years, pushing shippers to use those supply chain providers still able to secure adequate capacity, according to one logistics major.

Alwyn Mendonca, MD of GAC Hong Kong, said the container shipping demand rebound had been so rapid that the entire industry had been caught off balance.

“No doubt, the fact that there are fewer boxes has helped some freight rates to double since the beginning of the year,”.

“However, researchers suggest that 6 million new boxes are needed, and that’s equivalent to about two years of production.

“Hence, in spite of carriers now placing orders for new containers, there is very little hope that the current shortage is going to get better.”

Read full article at Ifw website

The price of containers has hit a 20-year high as a result of a shortage that has reached “critical” levels. 

Analyst AXS Alphaliner said the current price of a new 20ft dry box had increase from US$2,000 per unit at the end of last year to $2,750 today. 

The analyst’s figures show this is the highest price since 1991 and far above the average for the last 10 years of between $1,500 and $2,400. 

As a result, Alphaliner said it expected demand to outstrip supply during the third-quarter peak season. 
Alphlaliner said: “Container manufacturers are facing difficulties in restoring full capacity following the cutback in production of dry containers since October 2008. 

“Capacity at the main container producers has been cut back significantly since late 2008, as production lines were shut and twin-shift operations reduced to single shifts. 

“Although annual production at the two largest container manufacturers, CIMC and Singamas, is over 3.5 million teu, they are expected to produce only 1.35 million teu this year.” 

The growth in demand is reflected in sales figures from CIMC, which is reporting orders for 102,900teu in just the first quarter of this year, compared with 60,400 teu in the whole of 2009. 

Output of new containers this year is expected to reach between 1.5 and 2 million teu this year, well down on the 4.2 million teu produced in 2007 and the current fleet of 5 million teu. 

Fowarders and shippers are expecting a tough peak season and fear the shortage of containers will result in further price increases and delays to cargo. 

Read full article at Ifw website

Online shipper forum The Shippers’ Voice has hit out at shipping lines’ decision to introduce surcharges to cover the cost of the container shortage. 

MD Andrew Traill said he could not understand why lines had to introduce surcharges – either incorporating them into peak season surcharges (PSSs), or adding “equipment premiums” – for box shortages. 

He said this should be covered by the normal rate shippers pay, and there was no need for extra costs. 

“Surely investment in equipment would be part of the normal business investments carriers would make, the costs of which would be incorporated into the freight rate, along with other costs such as offices, personnel and ships,” Traill said. 

He highlighted Maersk Line, which has announced a record PSS of US$750 per 20ft container, $1,000 per 40ft and $1,200 per 40ft high-cube on westbound services to Northern Europe from 15 July. 

Read full article at Ifw website

Transpacific carriers have begun to increase capacity on the trade, following the start of new annual contracts, according to analyst AXS Alphaliner. 

The Paris-based firm said carriers had added 50,000teu of weekly capacity to the trade, representing a 17% increase in slots, since January. 

Alphaliner said the increase in capacity on the trade was larger than that introduced to the Far East-Europe trade. 

“The surge of service re-launches and capacity upgrades coincides with the beginning of the new annual Transpacific contract season,” the analyst said. “A total of 14 transpacific services were launched in April and May, of which four are replacement loops. 

“These services introduced a total of 37,400teu of additional weekly capacity, at a time when space had become extremely tight on the transpacific.” 

Read full article at Ifw website

The key driver increasing collaboration in the supply chain is reducing cost, rather than the environmental benefits it brings, according to new research.

In a recent survey by analyst Transport Intelligence (TI), 64% of respondents said the main driver for collaboration was cost reduction, while 25% cited efficiency and just 8.7% said having a greener operation was the main factor.

Speaking at the Shippers’ Voice seminars at this week’s Multimodal exhibition, TI CEO John Manners-Bell said companies that collaborated in order to reduce empty running did so to reduce cost, and any environmental benefit was simply a by-product.

Read full article at Ifw website