AISL: No empty container shortage but there’s deficit in vessel space

There is no shortage of empty containers in the Philippines although space on mother vessels is in short supply, Association of International Shipping Lines (AISL) president Patrick Ronas told PortCalls in an email.

Since last year there have been global issues with equipment shortage, but more particularly in Asia, due to a confluence of factors, but primarily due to COVID-19 pandemic. A new analysis by Drewry consultancy said cargo shippers may have to endure the current very high freight rates for some time as the container logjam is seen to continue at least until the second quarter of this year.

For the Philippines, however, Ronas explained the prevailing situation has little to do with shortage of containers since the Philippine market suffers from imbalanced trade in favor of imports. About 80% of containers being moved out of Manila are empty containers and only 20% are used for export.

“Shipping lines move the empties out otherwise they will be deemed as overstaying and lines have to pay unreasonable fees to customs. Therefore, there is no shortage of containers. What we have is a shortage on the space on the mother vessels,” Ronas said.

He explained that a shipping line will not release a container to the shipper if the shipping line is not able to secure a space for it on the mother vessel that call transshipment hubs such as Hong Kong, Shanghai, Busan, Singapore, and Kaohsiung. Otherwise, the containers will be “rolled over and storage fees can accumulate, which shippers will not be prepared to shoulder.”

These transshipment hubs are currently rolling over containers as there is not enough vessel space to load them or clear them from the port, Ronas noted.

He explained further that the lack of vessels in transshipment hubs has been affected by congestion in ports where vessels originate, like the US West Coast and some ports in Europe.

Currently, there are ships in the US waiting from four days to a week just to dock, affecting schedule reliability and leading to further delays.

The issue on shipping space will most likely be resolved by the second quarter after the Chinese New Year rush, Ronas said.

On the reported increase of freight rates due to the global container shortage, Ronas said it’s best shippers check with individual carriers “as no carriers’ situation is the same.”

He said: “There are carriers who are global and there are some that are focused on regional movements. A global carrier who deals in the Philippines may shift their focus on other markets or trades and therefore the price point may differ.”

As for blank or cancelled sailings, Ronas explained some carriers are expected to execute blank sailings only to recover lost schedules or try and regain schedule reliability brought about by congestion in some ports. He noted there are reports all available container vessels are already on the water.

(For the full article, please visit PORTCALLS)

Close Menu