In reality, these problems are a combination of a worldwide driver shortage, equipment shortage, Covid-related port congestion issues, box carriers’ disregard for signed contracts And all of this is set within a framework of record exports from Asia into the US.Īlthough several small box carriers are now opportunistically moving cargo from China into the EU and USWC, they run into the same port issues as the big box carriers, so cargo is not necessarily moving inland any quicker.Īnother issue is that big box carriers are buying both port facilities and freight forwarders, enabling them to maintain their stranglehold on both rates and services. There is no reason to think container rates will drop back to pre-covid levels, surcharges will disappear, or schedule reliability will improve as supply chain problems worsen.Įven though the photos of the vessels waiting off Los Angeles/Long Beach are frequently used as visuals to describe the global supply chain disaster, the truth is far more complex. Here is our take on the 2021 box market and outlook beyond the current supply chain debacle. Now more than ever, there is a need for shippers to quantify the short-medium-long term factors affecting the box market to rebuild a viable supply chain. In addition to consumers experiencing product shortages and higher prices, it appears a box ship is responsible for causing a recent oil spill that fouled 40+ kilometers (24+ miles) of the California coastline. Coca-Cola is shipping 60,000 MT of product in bulk tankers instead of boxes. Maersk announced they are cutting or withdrawing services to multiple small ports, while other carriers announce more blanked sailing. Shippers are desperate to pay more to secure deliveries or get ahead of the key trading periods such as Christmas.
With COVID-19 disruptions, port congestions, strong demand, and maxed-out capacity, a series of events have worsened the global supply chain situation so far. The development followed a 2.2% increase in August and an unprecedented 28.1% jump in July.
In September 2021, the contract market Xeneta Shipping Index (XSI®) revealed a monthly increase of 3.2% MoM. They might not be far off the mark, as our short-term market Xeneta Shipping Index (XSI®) documented a 900+ percent rate increase in the past year itself. Reuters said it best when they titled their most recent article on the supply chain disaster " Containergeddon.
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