Shanghai congested ahead of May rate rises

4/26/2017

The world’s largest container port is continuing to struggle with congestion as shippers rush to load cargo ahead anticipated rate rises at the start of May.

The port of Shanghai has also been hampered by fog and changes in vessel schedules following the restructuring of schedules and vessel sharing agreements after the liner alliance system was rejigged at the start of April.

Some sources put current waiting times at Shanghai terminals at between 18 hours and 60 hours depending on terminal and service. However, GAC said last week that some vessels were being delayed by up to ten days.

“Now roughly 60% of the ships are delayed for 48-52 hours,” Paul Tsui, managing director of forwarding and logistics operator Janel Group told Lloyd’s Loading List yesterday.  

Port manager Shanghai International Port Group (SIPG) last week said it had rescheduled some liner calls from its Guandong container terminal and Shengdong container terminal at Yangshan Port to its Hudong, Pudong and Waigaoqiao terminals.

“We can confirm that some of our vessels have been impacted by the congestion at Yangshan Port due to seasonal bad weather,” Maersk Line told Lloyd’s Loading List.

“We are closely working with Chinese ports to address any operational challenges, and we have been able to maintain a very constructive dialogue with our terminal partners.”

Tsui said another factor in the congestion was improved access to the port of Shanghai via the Yangtze River. “The completion of river improvements along the Yangtze means vessels from western parts of China such as Chongqing can reach Shanghai more easily, which has increased the number of ships,” he said. 

“Also, freight rates are expected to increase after 1 May and shippers are trying to push their production out to avoid increased freight costs.”

He also said changes in liner alliances and schedules had affected ship operations. As carriers switched terminals, this had left some facilities overloaded with cargo and others underutilised.

“It is also the normal practice of Shanghai port to accept overbooked cargo at 120-130% of capacity,” he added. “If alliances are changing terminals, then those containers which are not able to ship as scheduled will have great difficulty moving to a different terminal.”