Monday, 29 May 2017 16:00

New Vessel Alliances Cause Severe Disruptions in China and Possible Service Changes Locally

Currently, ports in China are struggling with some congestion issues. While it may be easy to blame the changes stemming from the new shipping alliances, unusual inclement weather, larger vessels, and cargo owners expediting shipments ahead of rate increases added to the congestion issues. As a result, turnaround times are slow, and some ships are waiting to enter the ports. Most of the congestion problems are at Shanghai's Yangshan Port but spread to Qingdao and Ningbo as well. However, this congestion could also come from these ports inability to handle increased volume. Overall, China’s top ports saw a 6% increase in the first quarter of 2017. Coincidently, Shanghai, Qingdao, and Ningbo are not only experiencing congestion but are also have the largest increase in port volume.

These new alliances led to delayed transitions to intermodal trains, dislocated chassis, extended truck turnaround times, and congestion at U.S. West Coast Ports. Longer turnaround times add pressure at these ports because of the limited space and time to unload and stack the greater volume of containers arriving on larger vessels. As these ports continue to become accustomed to the larger container volume from mega ships and the new alliances, the issues should subside. Typically, dilemmas at West Coast Ports should serve as a warning for their East Coast counterparts, but U.S. East Coast Ports reported minimal problems with the new carrier services. Surprisingly, U.S. Ports on both coasts have not yet experienced any significant delays from the restructuring.

Thus far, the Port of Boston has not experienced any disruptions. Boston began servicing new ships from Asia under the new alliances in May with ships from the Ocean Alliance and THE Alliance making their debut at Conley Terminal. While these vessel transitions seem relatively smooth, shippers should expect a period in which some ships have delays or are off schedule. As the restructuring continues, many traditional lanes could change as ships are allocated to new routes. Shippers using the Port of Boston need to be aware carriers will be evaluating services to smaller ports to increase their efficiencies. For example, the 2M Alliance, mainly comprised of services from MSC and Maersk, could look to re-evaluate weekly service from Italy to Boston and reroute with new services via Rotterdam. For questions regarding the new vessel sharing agreements, please contact your OCEANAIR representative.


 
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