Logistic News

Asia-Pacific Container Logistics Update March 2022: Port congestions, disruptions and demand patterns

March 2022 brings renewed global uncertainty in various forms. As economic outlooks fluctuate, and fresh disruptions emerge, we give you the latest picture of port congestions and container logistics in the Asia-Pacific.

Anna-Sophia Metzel, Curtis Doyle, 04 March 2022

The world of logistics has always been a fast-changing landscape. It’s why we encourage our customers to forecast their supply chains, and spot new market opportunities to stay ahead of the competition.

But even the best forecasters can be forgiven for struggling in the choppy waters of logistics today. At Twill, we know that for small-medium sized businesses, navigating these uncertain times can be daunting and we’re dedicated to helping you through. Here we’ve compiled our latest update – supercharged by Maersk – on the Asia-Pacific (APAC) market. 

Logistics Market trends in Asia-Pacific

Let’s start with an overview of the market trends in the region. These are the big topics that could influence your logistics long-term. So it’s worth keeping an eye on them:

Cracks showing in Chinese economic outlook

In China, a sharp drop in Caixin’s (a major Chinese news outlet) manufacturing purchasing manager’s index (PMI) to 49.1 in January suggested the country’s manufacturing output has lost momentum. There’s a belief that these lower figures are due to a combination of China’s push toward a zero-COVID-19 policy, restrictions ahead of the Lunar New Year and the impact of the Beijing Winter Olympics.

However, it also reflects potential weaknesses in China’s economic structure. Domestic household spending is weak, and outbreaks of Covid-19 continue to threaten disruption to manufacturing supply chains.

Schedule reliability will take time to recover

According to Sea-Intelligence’s (which provides the most comprehensive studies of ocean liner schedule reliability) Sunday Spotlight report, schedule reliability could take until the end of 2022 to normalise.

The report notes that: “The system is so far out of balance that there is no historical precedent fully describing this situation”. But using the experience of major delays and bottlenecks caused by the 2015 U

S West Coast labour dispute, Sea-Intelligence suggests that if the current system manages the same speed of recovery, delays could take 8-9 months to resolve.

What is the outlook for ocean freight logistics?

Ocean freight is at the centre of our end-to-end logistics solution at Twill – and its importance to global supply chains is undeniable. Here we delve into the key developments and destination updates in the sector:

  1. Demand returning after Lunar New Year – Overall demand out of Asia fell after the Lunar New Year due to the expected holidays and factory closures but is expected to recover quickly and remain strong in the first half of the year. Space will remain tight particularly on transpacific and European trade routes.

  2. Equipment situation is improving – Equipment availability in APAC is improving due to the proactive action taken by carries, including Maersk, last year and is expected to stay healthy across Asia up until April. We still encourage you to explore 20ft containers for your cargo where possible, to keep the situation improving.

  3. Asian ports operating well – Ports in APAC are operating well, with congestion reducing and waiting times improving. However, with the current situation in Ukraine and Russia, we are seeing significant delays in European hubs. This leads to challenges in Europe and US, with the average wait ranging between 7-14 days in Europe – and as high 40 days in the US.

In general, we see waiting times at ports in Asia Pacific are improving, but in both US and Europe we still have delays and disruption. We are getting better at predicting the delays from these disruptions, meaning that we can give our customers better information earlier for them to enhance their ability to plan better for their business. Providing our customers with this ability, is and will be a big focus for us in the time to come.

Anne-Sophie Zerlang Karlsen, Head of Asia Pacific Ocean Customer Logistics

Key destination updates for ocean freight

  • Asia to North Europe – With a brief drop in volumes due to the Lunar New Year, schedules have been improving. Volumes are now picking up, confirming that underlying demand is still very strong in Asia-Europe trade.

  • Asia to Mediterranean – Demand is gradually recovering post-Lunar New Year although there is some variation between individual Mediterranean markets. For example, demand in the western Mediterranean is weak, while in the central and eastern Mediterranean demand is stable and vessels full.

  • Asia to North America – A quick recovery in demand is expected after Lunar New Year but the North American ports situation isn’t great. Delays on the US East Coast are around a week and for the west coast up to 40 days! With no improvement likely for months, we advise you to give more lead time between ETA and actual departure time.

  • Asia to Latin America – For the East Coast of South America, service reliability is up to 90% - which is really positive. This is a little lower on the West Coast, where reliability is at 65% due to Covid-19 outbreaks. 

  • Asia to Africa – Demand from China is expected to rebound in March for African routes. Capacity for West Africa is being protected to maintain service levels, while in East Africa there will be some vessel sliding due to congestion at destinations.

  • Asia to Oceania – Yard congestion and long port delays are impacting cargo flows currently – so we advise you to give more lead times for cargoes wherever possible.

What is the outlook for inland transportation?

The story of inland transportation is varied across APAC, where some capacity is recovering; but others are feeling the pinch of wider congestions. Here’s the headlines:

  • In Greater China, landside capacity should now be fully recovered across all transport modes and transit times have improved. For intercontinental rail, there is even spare capacity between China and Europe, offering an alternative mode option; although space Central Asia is still tight.

  • For Australia and New Zealand, there are still capacity constraints in warehouses and distribution centres; this is being compounded by disruption to the rail network serving western Australia. So try seeking alternative or combined routes.

  • In Indonesia and the Philippines, there is strong demand on inland exports from Jakarta, Semarang and Surabaya as factories gear up for the peak season. It’s worth noting a pre-Ramadan rush during March-April will mean truck bookings should be made well in advance.

Where can I find more info on container logistics?

If you want to delve deeper into the news, trends and insights of container logistics – our Knowledge Hub is the place to go. Take a look and keep an eye out for more updates!

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