26 Oct Update on the Exceptional Height of Ocean Freight
We all know 2020 has been a challenging year. The pandemic has thrown a wrench into global commerce, but it has not threatened to close it down.
Crazy conditions such as ‘Shipageddon’ and an unusual super peak occurring in the ocean are now, however, surfacing just when we thought the peak season was leveling off.
Any observations and perspectives concerning current market conditions are below.
What’s going on
Demand has outgrown supply since May, and significant space constraints are evident. Normally, after the Golden Week, things are slowing down through November.
But under the present circumstances, this is likely to continue until the Chinese New Year (CNY).
Until now, this never-ending peak season has been powered by carrier free sailing programs. But things have changed: almost all capacity is fully deployed and space constraints are mainly due to record high demand and shortages of container equipment outside Asia.
As a result, it will take longer from the Cargo Ready Date (CRD) before the cargo is actually delivered, which indicates that supply and demand are becoming much more unbalanced.
That lopsidedness is compounded by the terminal and storage clog, suspension defects, and labour force issues related to COVID, which ensures that the gear is kept to an objective standard.
In fact, several haulers have also reduced US shipment volumes to manage the turnaround season of the gear back to the primary ports.
This difficult circumstance underscores the requirement for straightforwardness and readiness to change gears and change to elective plans.