Global Rice News

As logistics are predicted to be challenging well into the second half of 2021, Twill provides the latest updates on ocean freight shipping and equipment shortages in the Asia-Pacific region.

he last nine months have been some of the toughest the logistics industry has ever faced. We understand the difficulty that comes with planning your cargo shipments in such turbulent times; it requires quick-thinking based on the best possible information – which is why we are working hard, to keep you informed and up to date. Here we equip you with the latest from the Asia-Pacific – beginning with an update on the important route between Asia-Pacific and North America:

Strong and sustained demand impacting Asia-North America trade

As you may have experienced, if you have tried to trade to or from North America in recent months, the sustained and strong demand being seen globally is being felt particularly strongly on the US coasts right now, creating a lot of congestion. Right now, there are more than 50 vessels waiting outside these ports to berth, and we expect that this situation will continue, as the present infrastructure cannot support any additional vessel capacity.

The reasons for this are not only around demand but also the impacts of the Covid-19 pandemic, which remains unpredictable, resulting in labour shortages and lower productivity at ports in areas hit by the virus.

Now, a Covid-19 infection at Ningbo port in China, the world’s third-biggest port, has led to the closure of one of its terminals, the Meishan container terminal. While the shipping port remains operational, there is an impact on the transportation of cargo to and from this port. This is a similar situation to the one earlier this year at Yantian Port, where Covid-19 outbreaks caused partial closure of the port.

We are also experiencing a movement from just in time to just in case supply chains to be able to react to markets changes – as Eva Yan Liu, North China Team Lead at Twill, outlines:

“According to the Wall Street Journal, inventories are at their lowest levels in 10 years, despite retailers making a big effort to build up stocks. That means that the demand for space is forecasted to continue through this year and possibly even longer. We are also seeing a change in approach to supply chain management, from a just-in-time model to just-in-case.”

— Eva Yan Liu, North China Team Lead at Twill

At the same time, alongside port congestion, vessel capacity remains strained. The current global idling rate is around 1.0 – 1 .5%, a steep drop from 10.6% we saw just 18 months ago in Q2, 2020 – which means there is a shortage of vessels available for charter, impacting the ability of carriers to increase capacity.

Port update – heavy typhoon season adds to the disruption

Looking back to the Asia-Pacific, the difficulties and disruption of recent months have been strained further as a heavy typhoon season in China has created the latest challenge to supply chains. In Yantian Port, drop-off services were paused due to a typhoon alert and elsewhere Shanghai’s Yangshan port, and other nearby ports, evacuated ships as Typhoon In-Fa hit the coast. As a result, Yantian, Ningbo and Shanghai ports have experienced disruptions and are now congested with a wait time of 3 days.

On the destination side, there are wait times of 10 days in Antwerp (Europe); between 6 and 12 days on the North American West Coast ports of Long Beach, Los Angeles, Oakland, Seattle, Vancouver and Prince Rupert. We see slightly shorter wait times of 3 to 5 days on the East Coast ports of Savannah and Houston and 3 days in the South African ports of Cape Town and Durban, where shipping is also facing disruptions.

Source/Credit: https://www.twill.net/knowledge-hub/logistic-news/asia-pacific-shipping-update-august/