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Hapag-Lloyd Expects Red-hot Container Market To Stretch Into Q3

Hapag-Lloyd expects red-hot container market to stretch into Q3

Source: PortSEurope
Hamburg, Germany (PortSEurope) February 22 – The domino effect from port congestion and the resulting containers shortages will continue to be felt from North America to Asia, Hapag-Lloyd CEO Rolf Habben Jansen said at a virtual press conference. The German container line’s head believes that the red-hot container market could stretch into Q3, 2021 – into or after summer in the northern hemisphere. “Today there
is fairly extreme port congestion. Given the severity of the problem, the likelihood that this will be resolved soon I don’t see as very high,” Jansen said. “I would say that (the first half of 2021) is going to remain challenging. Fixing these port delays, even if they’re caused by understandable reasons, it tends to take time. Terminals are very big operations, and when you have a yard that gets really congested and you can’t move it (containers) out quickly onto the ships or inland, that does tend to impact your productivity”.  He said that the unprecedented demand for imports and COVID-19 outbreaks among longshore workers have compounded the problem and further slowed the flow of goods; schedule reliability is at a very low level; the delays at arrival have really gone up. Hapag-Lloyd has seen average delay on arrival grow from 43 hours in January 2020 to 125 hours this year. The dwell time of the container is double what it is normally and then there is another delay on the rail side. According to Jansen, in some ports, because of the lack of manpower, priority is given to laden cargo over the empty containers, which is understandable. But that means you end up sailing back to Asia with a ship that’s not entirely full because the empty boxes remain on the terminals. That was very much the issue in the fourth quarter of 2020. Container shortages further poke holes in supply chain flow. “Every box that is basically available is also in use,” Jansen said. The demand for imports from American consumers beginning last summer also was far bigger than anticipated. “When the (coronavirus) pandemic hit us almost 12 months ago,” he said, “everybody predicted that volumes would not only sharply decline in Q2, 2020 but it would only very slowly get back and in a best-case scenario would be reasonably close to 2019 toward the end of the year. In reality in H2, 2020 demand was much stronger. We’ve seen growth that we’ve not seen for a very long time”. The idle fleet is pretty much zero, today every ship that is available is sailing, Jansen said. Hapag-Lloyd has added 300,000 TEUs of container capacity since March 2020 and moved some capacity to meet demand on the Asia-Europe and trans-Pacific lanes. We’ve deployed 52 ships to get additional empty containers back to where they belong and, to give you a little bit of flavor, in a normal year, that would always be a single-digit number,” he said. Copyright (C) PortSEurope. All Rights Reserved. 2021

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