Some good news for a change, sort of.
In the next few weeks, a surge of containers is expected to wing outwardly across the world as Shanghai finally opens up for business. After its severe lockdown, restrictions have been easing across many districts opening up the port that has been only working in a ‘closed loop’ since March. This slow emergence has been carefully crafted so as not to create a tsunami, more a trickle to a flow of essential goods the world has been waiting for.
However, (and isn’t there always a however), with a critical amount of pent-up orders ready to ship it is expected we could be heading back to a period of significant under capacity. UK ports and hauliers, having been at a lower ebb recently, are now preparing themselves for record levels of imports over the next few months.
There still however remains the problem of port congestion. Experts are forecasting that port congestion will ease in 2023 but will not return to pre-pandemic levels. This means we are still some way off overcapacity which would result in the lowering of rates. So for those companies wondering when we might see prices fall away there seems to be no respite on the horizon for some time yet.
Needless to say, container lines have been busy during the pandemic increasing their containership fleets as rates soared and their bank accounts filled. This will come as short shrift though for the many freight forwarders who have been bearing the brunt of seemingly unfair charges such as detention and rent which ultimately have been passed down to their clients.
During this period of volatility it’s been suggested shipping lines have been levying high container detention fees on customers who’s boxes return late, despite the lack of capacity being the key driver. Some carriers are even reducing container free-time making the problem worse.
All in all we should be glad things are starting to move again and we look forward to a sustained period of open flow. There is one thing however, it’s still going to cost us in the pocket.
Next up, drum roll……………..CDS!