10:12pm 5th June 2022
Forwarders, traders and shippers expect the 2022 container peak season to be even more chaotic than 2021’s, according to a survey.
The Container xChange survey found that 51% expect the traditional peak season in the third quarter to be worse this year than in 2021, 26% expect it to be less chaotic and 22% expected about the same level of chaos.
The pandemic disrupted the usual seasonal swings in the container market as factories were closed, lockdowns spread and congestion followed. Faced with another disrupted year, respondents were turning to multiple strategies to get goods to retailers in time for the fourth quarter shopping season.
Container line reliability dropped to 35.8% in 2021 and fell even further in the first quarter of 2022.
Some 37.5% of respondents said they were shipping early in 2022 to ensure volumes, 25% were using alternative shipment routes and 18.8% were contracting long-term slot agreements with carriers.
Despite the difficulties in 2021 and expectation of chaos to come, 62.5% of respondents were still relying on the spot market or had no specific plans to ensure shipments make it to destination in time.
Turning back to the current situation, 58% of respondents said China’s Covid lockdowns had made it “hard to produce/ship as much product as planned.” That feedback adds to growing concerns that the release of lockdowns in China could lead to a surge of exports, further disrupting supply chains to Europe and North America.
“Predicting exactly what will happen in this year’s peak season is harder than normal because there are so many contradictory signs and intangibles,” said Christian Roeloffs, co-Founder and CEO, of Container xChange.
“One big question is whether China is going to sacrifice its zero Covid-19 policy to get trade and its economy moving again.
“If it does, then there’s every sign that we’ll see a substantial surge as backlogs of exports is shipped. If lockdown rules are relaxed soon and truckers are allowed to get back to work, then those backlogs will be arriving at the same time as peak season orders which could cause a lot of supply chain blockages at ports in Europe and the US where congestion is already widespread.
“However, there are very few indicators so far that President Xi is willing to compromise health policy to boost trade. Indeed, it might not be politically expedient for him to do so with the Communist Party National Congress set for later this year when he is expected to be endorsed for a third term. “
By Gary Howard
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