Congestion at international ports is the “most important” factor behind constrained container recycling rates, argues shipping analysts at Drewry.
In a webinar on 9 February, John Fossey, Senior Analyst on Container Equipment at Drewry, said containers are just not getting to delivery points in a timely manner, highlighting issues in Europe and North America constraining container availability.
Fossey noted that major Southern Californian ports including Long Beach and Los Angeles are under “unexpected pace and sustained demand” due to the e-commerce boom from the COVID-19 pandemic, as well as disruption to shipping lines and national or regionalised lockdowns being levied across the industry.
“Containers are just not getting to the point needed in a timely manner,” explained Fossey, noting that a surge in longshoremen on sick leave, containers used as temporary storage units, and congestion in warehouse capacity has also factored into longer turnaround times for container shipping.
“The most important factor has been port congestion. We have seen 30 ships waiting at anchorage to get to Long Beach and Los Angeles ports.
“Typical 65-day turnarounds can go to 100-day turnarounds with these significant supply chain issues,” he continued.
Stabilisation possible for 2H2021
Despite the lamentation of container restrictions due to under-pressure ports, Drewry is buoyant on the sector reducing turnaround times in the near future.
“We at Drewry believe this is a temporary situation that will eventually correct itself,” Fossey said. “We do see into Q2 2021 some kind of normality coming back to the system.”
Container production output is expected to jump by 40% in 2021, accelerating fleet growth to 6.5%. Drewry analysis showed that 4.3 million TEU will be produced in 2021, similar to that of the record-setting year of 2018.
Analysts at Drewry stressed that the much-read reports on constraints on containers “has nothing to do with” investment in equipment and more from the fallout of the impact of COVID-19.
Fossey said that direct investment from shipping providers as opposed to leasing containers “works better” for long-term availability of containers for the logistics sector.