During the coronavirus pandemic, they had to make great sacrifices to achieve even greater things: while lockdowns on land brought everything to a standstill in most countries, our seafarers – together with terminal workers and truck drivers – kept supply chains up and running against all odds. They made sure that we had protective clothing, masks, essential medicines, food and consumer items that are transported in our containers. Crew changes were prohibited by most states during the pandemic. Even urgent medical visits were often not permitted during port calls or were only allowed after repeated insistence on part of the shipping companies and agencies or intervention by local embassies.
Confined on board the ships, our seafarers were separated for many months from their families, who had to fend for themselves at home during the threatening pandemic. We want to thank all our seafarers for their magnificent – and often involuntarily long – service as well as to share images of their life on board.
Photographer Phillip Gätz was on “Cap San Marco” shortly before the pandemic began. These glimpses of life on board were taken during the voyage from Hamburg to Buenos Aires – before masks were required and any fear of infection. A tribute to our seafarers!
RCEP heralds a new era of Asia trade. The Regional Comprehensive Economic Partnership (RCEP), which comprises 10 mainly Asian countries, will come into effect on January 1, 2022, to create a new era of ultimately tariff free trade in Asia. RCEP, comprising China, Japan, New Zealand, Australia, Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam, will become the world’s largest free trade area, handling around 30% of total global trade. RCEP will slash regional tariffs among member countries and will be eliminated for 90% of goods by 2032. RCEP will also strengthen economic and trade collaboration especially on the China-Japan and Japan-Korea trades. Efforts will also be made to standardize trading rules and procedures and remove nontariff related barriers as much as possible to reduce supply chain costs in the region.
China power shortage. Key manufacturing areas in China including Guangdong, Jiangsu and Zhejiang have been affected by electricity rationing with about 20 of the 31 provinces in China having been impacted to varying degrees. The shortages have been caused by several factors including high coal prices, unpredictable weather patterns and the introduction of tougher energy and emissions. While China has increased coal production and some of the restrictions eased in early November, Hamburg Süd has identified three measures customers can take to mitigate any disruption to supply chains.
1. Constantly monitor the supply situation to adjust manufacturing and logistics schedules;
2. Stay in regular contact with local vendors and partners, who will be able to best monitor the local electricity distribution plan so disruptions to supply lines can be addressed earlier;
3. Reach out to us and discuss mitigating actions that may reduce cargo delivery delays.
Container demand growth is likely to moderate compared to 2021 supported by strong demand from the US. The outlook is more uncertain in Europe where we have seen the demand slowing. The ocean capacity is impacted by port congestion and vessel delays with around 12%-15% of global container ship capacity effectively taken out of the market with an improvement in equipment availability in Asia.
Trade growth in the spotlight as the global economy faces multiple challenges. The global GDP outlook remains strong for 2022, led by expectations of a robust capex cycle, strong demand, rising wages, and cheap capital. Moreover, inventory replenishment will support goods trade well into 2022, and the channel shift to e-commerce is likely to keep pressure on outbound logistics capacity. But risks are increasing as rising prices and a reduction in government financial support challenge the global economy and threatens to erode demand and dampen trade. Commentators have started to moderate growth projections while raising inflation forecasts, most notably in the US. Central to the impact on trade is how consumers in the US and Europe react to higher prices and less government support. Latest analyst forecasts indicate China’s economic growth will grow by more than 5% next year despite risks posed by a rapidly slowing property sector and uncertain domestic consumer demand. Concerns over the impact on production from power supply disruptions eased in November after China increased coal production which allowed the governments to lift some of the restrictions imposed on industry.
These uncertainties have led to a normalization of global container demand growth compared with a projected 7% increase in 2021. This is based on a normalization of consumer demand as spending on tourism, dining and other services returns to pre-pandemic levels. But current demand levels on some trades, including on the Asia-North America trades, could remain stable as buoyant demand and inventory restocking continues into 2022.
Container market continues to show extraordinary volatility due to supply chain disruptions caused by port congestion, trucker shortages and changes in demand. Global container demand growth moderated to 2% in Q3, slightly lower than the 2.5% increase forecast, and down from doubledigit growth rates in H1 2021. Growth in the third quarter was mainly driven by Latin America here trade grew 14% year-on-year and North America which saw a 4% increase supported by technology products and retail goods. North America container imports from Asia rose 2.7% in Q3, while European container imports from Asia fell by 3% due to a drop in consumer demand.
The container industry remains capacity constrained as port and landslide bottlenecks reduce the amount of available vessel capacity even as the nominal capacity increased 4.2% to 24.7m TEU in Q3 compared with a year earlier due to new vessel deliveries.
• Carrier capacity/equipment outlook for Q1 2022: We expect space to remain tight throughout Lunar New Year due to capacity reductions caused by port and vessel delays. The equipment situation is improving as we have continued to in-fleet containers and get more empty equipment back to Asia. We still see shortages in some locations in the lead up to Lunar New Year, but the situation has improved from last update. Anne-Sophie Zerlang Karlsen, Head of Asia Pacific Ocean Customer Logistics, Maersk, said “Restoring reliability for our customers supply chains continue to be our highest priority in Maersk – it is a difficult environment where congestions continue to intensify in many of the key ports, but Maersk will continue investing where it has the largest impact for our customers.
• Asia import/export demand and supply outlook: Demand remains strong overall, although we see some flattening of demand growth at certain destinations. There is a significant order backlog that will keep export markets full, but space will remain very tight. The impact on Chinese exports due to the power restrictions is expected to be minor but imports are soft in certain segments, including wood and timber, due to the ripple effect from power controls.
• Sea-Intel report highlights Oceania schedule reliability improvements. The latest Sea- Intelligence schedule reliability report has highlighted the positive impact from our schedule optimization initiatives that we have made to its SENZ service. On the Oceania-Asia trade, as being part of the Maersk group, we stands-out with a schedule reliability on SENZ service of 72% compared with the industry average of 14.3%. This was achieved by adding one vessel to build a schedule buffer, removing the Brisbane port call to build buffer and enable on-time arrival at critical ports and the ad-hoc omission of Napier port to protect schedules.
|Asia to North Europe||Vessel delays and contingencies continue to restrict network capacity in December. Demand remains strong and we expect an additional rush towards the end of December. There are expected accumulated delays on NERA 1, NERA 2 & NERA 6 services and vessel voyage numbers have been adjusted to match the actual departure weeks to improve schedule visibility.|
|Asia to Mediterranean||Delays will result in vessel sliding in December causing a capacity reduction. That comes as demand has picked up from early November especially to West Mediterranean which is unfortunately where we have our biggest capacity exposure due to delays. We finding solutions to add capacity in order to compensate for some of the lost space from vessel sliding.|
|Asia to North America|| Overall demand is expected to be strong in December. The North American ports situation has deteriorated recently with congestion at LA/LB increasing to 21 days, the same as Seattle. The loss of capacity due to missed sailings from port congestion will continue. To mitigate the impact, we will drop Seattle from the UPAS 4 service from November onwards and run a separate Seattle shuttle service to secure network capacity and improve schedule reliability. We also
plan to deploy gap loaders.
|Asia to Latin America||Demand will be strong until the end of the year. Space is still tight despite several extra loaders in the market. East Coast reliability is slowly improving, and we expect West Coast reliability to catch up early next year. We will focus on carrying non operating reefers (NORs) from southeast Asia and Taiwan.|
|Asia to Oceania||Network capacity will take a hit in December due to continued delays which has resulted in more schedule sliding. We have been able to maintain the weekly sailing of the AAUS NL for the past three months by removing five port calls in the rotation and alternating calls at Shanghai and Ningbo. But continuous and increasing delays at Asian and Australian ports have made schedules unrecoverable, resulting in a schedule slide.|
|Oceania Export||Demand remains strong in the Oceania market as New Zealand enters the peak season for exports and Australia experiences high demand with the start of the agricultural season. A favorable growing season has resulted in higher export demand. Oceania continues to experience reefer equipment shortages with a high level of demand in the pre Christmas season. Schedule sliding continue as we look to further restore reliability.|
|Asia Import||Vessel delays and port congestion is expected in Q4 especially in Europe and North America. There will be negative impact on cargo on time delivery and overall ocean capacity back to Asia.|
Greater China: The impact of soaring fuel prices on inland capacity and demand are not yet clear in Q 4 but we anticipate it might lead to increased trucking costs for Lunar New Year, we have launched the first dry port in Huzhou, Zhejiang Province, to help exporters
For China Intercontinental Rail service, capacity constraints will likely ease in November and December, allowing us to support more customer block trains in December
Japan and Korea: Due to the delayed vessel schedule and high yard density, containers are only allowed to gate in 72 hours prior to ETD. Container stowage depot, especially depot for dangerous goods are insufficient for customers.
Vietnam: Vietnam factory production are back to normal we anticipate higher demand into US and Europe in the year end Equipment availability has remained a significant challenge
Indonesia: We are seeing constant strong demand from export customers from core segments including retail and lifestyle, FMCG and industrial due to the year end rush North America, Europe Mediterranean are our top trades There will be strong demand towards the end of this year for trucking capacity Disruption to feeder schedules and a shortage of empty containers will affect customers’ transportation plans for the rest of the year and we are providing a temporary container yard for customers