China box congestion spreads to other ports

4/27/2017

Container port congestion in China is spreading up and down the coast as new liner alliance schedules added to poor weather cause disruption to container shipping operations.

As reported in Lloyd’s Loading List yesterday, Shanghai’s Yangshan terminals are now experiencing lengthy delays and vessel queues at anchorage waiting to enter terminals building by the day. The most congested facilities at Shanghai are now suffering from berthing delays of at least two days and sources suggest this is now having a serious impact on feeder service schedules.

A customer notice by Maersk Line released today said that as well as striking the world’s largest container port, public terminals in Qingdao and Ningbo were also now “facing congestion and high yard density”. Qingdao, 700km north of Shanghai, and Ningbo, 200 km to the south, were ranked the world’s eighth and fifth-largest container terminals in 2016, respectively, according to data compiled by Lloyd’s List.

Maersk said the primary cause of port congestion in China was the “large phase-in/out exercises from the reshuffling of alliance networks starting in March”, but added that unstable weather in the northern hemisphere in spring had also caused delays and reduced terminal performance.

“We aim to provide a further update about the terminal situation in due course,” said Maersk. “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 to ensure Maersk Line existing priority.”

The line also suggested that delays at Chinese ports could continue for a prolonged period. Maersk told customers that in order to maintain the stability of its ocean network, it would put contingency actions in place in the coming month “including consolidating volumes and reducing port calls if this is required temporarily”.

The customer advisory added: “Maersk Line will devote all of our efforts to minimize the impact to our customers. Our teams will provide you first-hand information in case any adjustment is required to your shipment schedules.”

Lloyd’s Loading List reported yesterday that the world’s largest container port Shanghai was struggling with congestion as shippers rush to load cargo ahead of anticipated rate rises at the start of May. The port 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. Sources earlier this week put waiting times at Shanghai terminals at between 18 hours and 60 hours depending on terminal and service. However, some sources said last week vessels were being delayed by up to ten days.

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, and lines including Maersk confirmed that some vessels had been impacted by the congestion at Yangshan Port “due to seasonal bad weather”.

Forwarding sources 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 meant vessels from western parts of China such as Chongqing can reach Shanghai more easily, which has increased the number of ships, one forwarder told Lloyd’s Loading List

“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 added.

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.”