12 July 2021
It has been a turbulent year for logistics so far. As the disruptions of COVID-19 continue to reverberate through the industry, the impacts have been wide-ranging – from bottlenecks and partial or complete port shutdowns; to a change in a very way, companies do business, shaking up demand and the traditional way of doing things in the process.
In our last Asia-Pacific (APAC) update, we noted that 8-10% of cargo capacity around the world is currently absorbed by delay as a result of this disruption. With busy seasons approaching and important holidays around the corner – it’s never been more important to have a handle on your logistics plans and forecasting.
Slow progress at Yantian Port, South China
The Asia-Pacific is a hub for logistics activity around the world and none more so than Yantian Port – the third-largest port in Asia and one of the busiest for exports out of the region. It’s for this reason that disruptions and closures at the port have had such an impact on capacity and congestion in recent months.
The good news this month is that we have started to see daily improvements in the terminal – but challenges remain, particularly due to issues at the nearby port of Nansha which had been taking on some of the overspill from Yantian; as well as wider equipment shortages in South China.
On another positive note, Yantian terminal has started to accept laden gate-ins (cargo to be checked in for shipments) that are ETA (Estimated Time of Arrival) -7 days and are currently moving 11,000 containers a day. Yard density at the port has been reduced down to around 50% and terminal productivity is now up to 75% of normal levels. At our last check, terminal waiting times remain at four days.
With equipment shortages continuing, we foresee particular shortages in empty 40ft General Purpose and 40ft High Cube containers in the coming weeks, caused by significant vessel delays and omissions. So, if you need to export containers from Yantian, we encourage you to change to 20ft containers in the short term.
Network and schedule reliability to/from the Asia-Pacific region
The world of logistics is deeply interconnected – with delays or disruptions at one port causing a ripple effect to others around the world. That makes maintaining strong network reliability across key trade routes really important.
Starting in North Europe there has been an improvement in schedule reliability. In the UK, ports are showing busy yards, but for now, there is little or no delay for vessels berthing in Felixstowe. In Germany, the Port of Hamburg continues to be particularly congested, which is why our services remain diverted to Bremerhaven until mid-August 2021 – to keep cargo moving.
Elsewhere, in Antwerp, which has seen the highest waiting time across Europe, there is currently a three-to-four-day delay in berthing. In Rotterdam, this delay is only one or two days, depending on the terminal – and in Gdansk, the situation is relatively smooth, with modest delays and a stable yard. Finally, at the Port of Le Havre in France, vessels are delayed due to late arrivals, but waiting times to berth are more or less normal.
In the Pacific, the peak trading season is fast approaching, and this month (July) will see even stronger demand. US imports from Asia in the first months of this year grew by a record high of 40.2% year-on-year – suggesting that port congestion may get worse as a result of the peak season before it gets better. This is supported by Bloomberg, who recently reported the congested and delayed shipping situation is expected to continue through to Christmas.
“While Yantian is on track to recovery, there are still significant backlogs to be cleared. In addition, the upcoming peak seasons will stretch the current situation. Equipment shortage is not only at 40-foot containers but also 20-foot containers. Our teams at Twill are working hard to find solutions for your business. We encourage you to look for supply chain opportunities up to North China.”
The inland transport situation
Amidst the busy status of ocean freight, it’s important not to forget inland transport options – whether road, rail or barge – as an alternative solution to keep your supply chain moving.
In the case of Yantian port, where pressures are particularly strong right now, Maersk trucking services will be running from Shenzhen to Xiamen. These will not be continuous services but run depending on the situation. Alongside this, Maersk’s Sea-Rail service between Ping Yan and Yantian has resumed and will also be available depending on the situation and demand. In addition, a new barge service is also available between Zhongshan and Nansha which can be paired with trucking services for a combined logistics solution.
While we hope these new services will alleviate constraints, ground transport in the region is not without difficulties. An increasing number of carriers are diverting calls to Nansha Port, resulting in severe challenges managing road congestion and maintaining efficient handling of ‘gating-in’ laden containers. And with the upcoming Tokyo Olympics and Paralympic Games, expect to see some congestion around Tokyo port, that will impact delivery and turnaround times.
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