Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today, I would like to talk about the theme of, “154 container ships offshore at the ports of Shanghai and Ningbo in China.”
Currently, there is a lot of talk about the 60 to 70 ships which are waiting off-shore at ports of Los Angeles and Long Beach on the west coast of North America.
However, at the ports of Shanghai and Ningbo, 154 ships, which is double that number, were confirmed to wait off-shore as of the end of September.
In addition, 242 container ships are waiting offshore at ports all over China.
Daily Logistics Radio by IINO san in 8th Oct. 2021
The Reason of Severe Congestion at Ports in China
Why is this occurring? Let me explain each of the factors.
First of all, Ningbo terminal was closed in September, which reduced the operational capacity for cargo handling. Furthermore, typhoons not only made loading and unloading impossible at the port, but also caused significant delays in the ship’s schedule.
China to North America route increase in number of ships
The other possible reason is that the number of ships on the China to North America route is increasing.
Number of flights : China – North America route
January 2021: 48 ships
September 2021: 68 ships
It is as many as 40% increase in flights in six months!
Shipping companies will be adding ships to this lucrative route. Not only existing companies, but also new ones have entered the market.
Decreased Efficiency due to the Smaller Size of the Vessel
Also, the size of the ships that were used is a little smaller than the usual ones. The average size of the ships so far is about from 7,125 TEU to 8,601 TEU, and there is the difference of about 1,500 TEU in container volume.
In addition, it takes time for ships to berth. This downsizing of ships has resulted in lower loading efficiency, and more ships being used, which caused congestion in the ports.
Shortage of Pilots in China
In addition to the downsizing of ships, the shortage of pilots in China is probably another reason. A pilot is a professional who docks a ship at a port.
Their role is to maneuver tugboats from the container ship to berth safely and reliably at the port. However, in China, a 14-day isolation is in effect after pilotage services by the reason of tightened quarantine for corona.
The Cause of Space Shortage
If the congestion situation occurs not only in North American ports but also in Chinese ports, it makes sense that there has been a shortage of space so far.
Until now, I had thought that the growing consumer demand in North America was causing logistical congestion at North American ports and inland. However, it turns out that congestion was also occurring in China.
Equilibrium between Supply and Demand. Does demand Lean towards Air?
Currently, production activities are restricted due to power shortage in China, but there are also restrictions on the supply of container’s space, so in a sense, I think that the balance between supply and demand has been achieved.
However, cargos will need to be delivered for the Christmas sales in North America, so I personally believe that the demand for air will increase in the future.
It is difficult to predict market conditions due to the combination of various factors, but I will continue to provide information.