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Asia Pacific

Asia Pacific Market Update

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The Latest Industry Update

Vessel delays are expected to continue to cause capacity shortages. Sea-Intelligence Maritime Analysis says “the effect of vessel delays continues to worsen. Globally, we are now at a point where 12.5% of capacity is effectively removed.” Hamburg Süd has lost some vessel positions due to extended delays. Despite all vessels being deployed, effective capacity is severely limited by port congestion. Currently more than 10% of the global container fleet is waiting for berths to become available. To reduce the impact from the current disruption, we are deploying extra vessels where possible, both to cover some of the lost vessel positions and meet demand but also to speed up the flow of empty containers back to Asia. We continue to in-fleet extra containers and invest in new containers.

Vietnam lifts some COVID restrictions. The Vietnamese government lifted some COVID-19-related restrictions on October 1st including the need for employers in the worst affected provinces to provide accommodation for employees. This requirement will be assessed at a provincial level on a case-by-case basis. Truck drivers crossing different regions are still required to show a negative PCR test. We are monitoring the situation and we expect disruption to manufacturing and logistics to continue primarily as testing and vaccinating workers is taking time. We have seen a significant increase in volumes through North Vietnam as customers shifted production from the South.

Market Update

Trade growth, supported by consumer spending and corporate capex, has meant continued strong demand for logistics services in the third quarter which is likely to run into the fourth quarter peak season. This is reflected in buoyant container shipping and airfreight volumes even as vessel schedule delays and capacity shortages create headwinds for shippers. Vietnam and Australia are emerging from lockdowns which are a positive development.

The combining factors of increased demand and extended delays that are tying up capacity are still in place. However, we believe trade growth likely stabilized in Q3 based on the global composite purchasing manager’s index (PMI). It hit 53 in October, which was the fifteenth straight month of growth, but container demand growth moderated to 2.5% in Q3, down from double-digit growth rates in H1 2021. Global air cargo volume, based on cargo ton kilometers (CTK), increased by 26% in the three months to August compared with 2021 and by 9% compared to 2019. Strong demand in the US, especially for retail and tech goods, continues to drive trade flows; in Q3, Asian imports into North America climbed 2%. Asian imports into Europe slipped by 0.5% in Q3, but were unevenly distributed in different markets. We see further port delays through Q4, which will reduce available capacity.

Demand for logistics services remained strong in Q3 and is likely to continue into Q4 following high levels of consumer spending and corporate capital expenditure in the US. Nonetheless, sales in Europe have plateaued in Europe. There are still shortages of semiconductors and production bottlenecks that are thwarting the ability for companies to rebuild inventories, especially in the US and Europe. The supply-side of the logistics industry, as mentioned above as the continued ripple effect from COVID-19 (container availability, limited capacity availability for both air and sea, port congestion and warehousing capacity) continue to challenge supply chain management services.

Ocean Update

Cargo demand, although predominantly in North America, remains strong across the globe. Port congestion is causing severe backlogs in all destinations, reducing effective capacity and ultimately resulting in tight space for all trades ex Asia. While power restrictions in certain provinces in China may slow production, demand remains high.

We expect equipment availability in Asia to remain tight in the coming months. We see a gradual improvement in the equipment outlook as we increase the flow of empty containers into Asia and revise vessel schedules to boost reliability. This chart below shows the current equipment status traffic for main loading ports in Asia. (Note: The equipment forecast is based on the supply and demand forecast, any increase in demand or supply delay would cause an earlier supply gap)

* Green color indicates the equipment availability is enough to cover demand forecast; Yellow color indicates it’s tight to cover demand forecast; Red color indicates it’s insufficient to cover demand forecast. (Note: The equipment forecast is based on the supply and demand forecast, any increase in demand or supply delay would cause an earlier supply gap)

Hamburg Süd Trade Lane Market Overview
Trade Comments
Asia to North Europe The market is significantly impacted by congestion at both origin and destination ports. Ocean capacity remains tight primarily due to port omissions and vessel slidings. We are making ad hoc port omissions and changes in rotation to recover schedule reliability.
Asia to Mediterranean We are seeing delays in most ports in the Mediterranean and are adjusting schedules to reduce the effects of the delays. We expect capacity to remain tight in Q4 due to port congestion and schedule delay. We are doing our utmost using internal transfers to mitigate cargo delay.
Asia to North America We expect to operate a full network in the coming months, but the overall North. American ports situation has deteriorated recently. Consequently, the loss of capacity due to missed sailings is set to continue. We have deployed additional sailings to US west and east coasts to secure network capacity and offer additional options. That said, we highly recommend customers allow more lead time between vessel departure and actual arrival time, including additional buffer time for inland moves.
Asia to Latin America We expect a full network with but with cargo backlogs in warehouses and terminals in Asia. We suggest customers consider shipping dry cargo in NORs [non-operating reefers] rather than dry containers where possible.
Asia to Oceania Delays at origin and destination ports continue to impact the network and the Q4 capacity outlook remains tight. We continue our focus on restoring schedule reliability by rationalizing our network. Temporary port stoppages combined with industrial action and COVID cases continue to cause disruption and the need for ad-hoc contingencies and port omissions to recover schedules. We expect a full network due to capacity lost from sliding sailings and recommend our customers to plan ahead.
Oceania Export Delays at origin and destination ports continue to impact the network and the Q4 capacity outlook remains tight. We continue our focus on restoring schedule reliability by rationalizing our network. Temporary port stoppages combined with industrial action and COVID cases continue to cause disruption and the need for ad-hoc contingencies and port omissions to recover schedules. We expect a full network due to capacity lost from sliding sailings and recommend our customers to plan ahead.
Asia Import Port congestions and vessel delays particularly in Europe and North America are causing reduced capacity and delayed arrival back to Asia which is impacting feeder connections in our hubs. We’re trying utmost to minimize missed connections.

Major Ports Updates

Ports in China are working well with some disruptions from weather, i.e. typhoons affecting South China.

Ports in South East Asia such as Vietnam (Haiphong, Da Nang, Qui Nhon), Malaysia (Kuantan), and Philippines (Cebu, Manila, Batangas and Subic) still face feeder capacity bottlenecks and restrictions for new bookings. Port of Tanjung Pelepas is seeing increased congestion.

Port of Busan has seen an improvement in congestion levels with vessel waiting times forecast to be around 3 days following the implementation of contingency measures.

Port of Los Angeles and Port of Long Beach continue to be severely congested with +60 vessels waiting at anchorage with lengthy waiting times of 8-17 days and 15 days respectively. All large vessels are limited to 4 gangs in LA, so for large vessels the waiting time is expected to be 11-20 days in total.

Port of Seattle continues to struggle with long waiting times of 28 days.

UK ports are experiencing port congestion and inland moves are heavily affected by driver shortages. We have been working tirelessly to reduce the yard density and as a result, Felixstowe gate has reopened for empty returns as of Friday Oct 15th noon. However, the situation remains critical, and we are reviewing further ocean network actions. Click here to stay updated on Maersk global advisory regarding Felixstowe and current supply chain challenges.

Landside Transportation Update

Domestic road and rail freight demand declined slightly due to the Golden Week holiday and power restrictions. Trucking capacity in China is expected to be impacted by continued increases in diesel prices. Our intermodal team is monitoring the situation closely and has domestic railway solutions connecting inland with ports.

Congestion issues in Busan and competitive rates have also made relay services more attractive. Due to the delayed vessel schedule and high yard-density, containers are only allowed to gate-in 72 hours prior to the ETD.

Customers are having a difficult time to find container stowage depots, especially for dangerous goods.

Import demand is ramping up as the peak season approaches and retailers stock up for the Christmas rush. Australia is still faced with potential industrial action in ports. Our teams will continue to provide customers with contingency connections to ensure timely landslide services in case of port omissions.

Most factories in South Vietnam have restarted production. We anticipate strong demand from Vietnam and Cambodia into US and Europe, although a sudden production surge from reopened factories could cause capacity challenges. Equipment shortages in North Vietnam could ease by the end of October as production normalizes and imports are back on track. Trucking capacity is expected to be under pressure in as factories rush to meet holiday demand. Equipment availability in Cambodia is tight.

Most factories in South Vietnam have restarted production. We anticipate strong demand from Vietnam and Cambodia into US and Europe, although a sudden production surge from reopened factories could cause capacity challenges. Equipment shortages in North Vietnam could ease by the end of October as production normalizes and imports are back on track. Trucking capacity is expected to be under pressure in as factories rush to meet holiday demand. Equipment availability in Cambodia is tight.

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