COVID-19 breakouts in major ports in Vietnam and China are “causing havoc” for supply chains – and sky-high container demand is set to continue, A.P. Moller-Maersk (Maersk) has said.
In its August 2021 Asia Pacific market update, container shipping demand will remain strong into the fourth quarter of 2021.
Container demand growth continued to run ahead of supply growth in Q2 2021, driven by the combination of strong US goods consumption, increasing expected container demand by between 2-4% year-on-year for 2H 2021.
Maersk noted that these gains were reflected in the 18.7% increase in global container trade in 2Q 2021, with inbound regions including North America, intra-Asia, west Central Asia, Latin America, and Europe seeing double-digit growth in container trade compared to 2020.
However, recent flare-ups of COVID-19 continues to present challenges across Asia Pacific, with Vietnam extending the lockdown in Ho Chi Minh City until mid-September; national lockdowns in New Zealand; and Ningbo-Zhoushan Port reeling from suspensions to operations.
“A persistent COVID-19 flare-up across the southern provinces of Vietnam is creating havoc for supply chain with trucker shortages and factory closures exacerbating terminal congestion,” Maersk wrote.
“Empty container availability across [Vietnam’s] northern provinces remains extremely tight. Severe equipment shortages are expected in the coming weeks in the southern provinces as factories start to reopen and manufacturing starts to ramp up.”
Lockdowns in southern Vietnam’s manufacturing heartland, imposed from 26 July, have been extended until 15 September. A Saigon Newport survey showed that some 66.5% of manufacturers around Ho Chi Minh City have halted production.
“Surges in demand for cargo space keep the fleet active and global idling container ship fleet remains low. But uncertainties over the easing of capacity constraints, equipment shortages and port congestions make it challenging to predict when the disruptions and imbalance in demand and supply will normalise,” Maersk wrote.
At Ningbo Meishan Island International Container Terminal (MSICT), a COVID-19 outbreak means operations of container gate-in and gate-out has been suspended from 11 Aug . Maersk has a VSA service AC6 (Asia- South America) at MSICT and all AC6 vessels in August will omit Ningbo.