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2022 looks set to be worse for shippers than 2021
Source
American Shipper
Post Date
01/18/2022

Continued high-level US import and problems with coronavirus outbreaks in China seem to maintain container rates and bottlenecks at top levels in 2022, writes Sea-Intelligence. For shippers deping on sea transport, the 2022 container market is very likely to become even worse than 2021, which was highly affected by delays, bottlenecks and sky-high rates, expects analyst firm Sea-Intelligence.

"2022 has clearly gotten off to a rough start, when seen from a shipper perspective. Freight rates continue to increase, as per most overall rate indices, and congestion issues appear to get worse and not better," writes Sea-Intelligence in a new on the development on the container market.

The problems are still primarily due to high demand of import in the US and to a lesser degree in Europe as well, while the export activity from these regions have decreased since 2019, pressuring the infrastructure in the US in particular. "The North American boom in import volumes is three times higher than any other trade, and it is clear to see why the US port and hinterland infrastructure remains under severe pressure," continues the analyst form.

At the same time, US export has decreased drastically, meaning that containers are pouring towards the US due to high import but are unable to be used for transport the opposite way in a similar manner, leading to lack of capacity in other places. According to Sea-Intelligence, the latest data shows that 104 container ships were waiting outside the ports at Long Beach and Los Angeles in order to unload. The problems are therefore not likely to diminish for the time being.

Furthermore, the uncertainty regarding new outbreaks of coronavirus, especially in China, must be taken into consideration. "To add insult to injury, the risk of shut-downs in China is significant, due to the combination of a zero-tolerance policy towards Covid and an Omicron variant which is much more contagious than previous variants," writes Sea-Intelligence.

The problems in China have caused trucks to queue up on the border to Vietnam and a considerable decrease in ship traffic on the Yangtze River, where pilots have been s into coronavirus quarantine. The supply chain issues will keep the rates high this year, estimates the analyst firm. "It is extremely unlikely that rate levels will revert back to normal," the states, however foreseeing continued growth for the carriers as well.


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