COVID's EFFECT ON CONTAINER SHIPPING INDUSTRY
Due to Covid-19, the problem of occupancy in equipment and ports, which has been continuing from the autumn of 2020 to the present, has greatly affected and continues to affect all parties in the sector. Due to quarantines, online shopping has significantly increased production and trade worldwide. Fearing that their supplies would not be met when the quarantine continued, the consumer pushed the manufacturing and shipping sectors into an expansion that they were not ready for. Agencies, ship owners, ports were not ready to meet this trade supply, and as a result, there was congestion in ports and unplanned positioning in the container sector.
As we all know, the production center of the world is China. To meet the increasing demands of the consumer, manufacturers in China purchased materials from all over the world. These backlogs in Chinese ports have led to container shortages all around the world due to the country’s export closure. This container shortage has pushed agencies to increase freight rates by more than 200%.
When China opened its export doors, it needed more containers, which pushed agents to position empty containers at Chinese ports. While we, shippers, could not find equipment around the world and pay expensive prices even when we found it, agents had to send the equipment to China empty.
But the equipment problem was not the only thing that hurt the shipping industry. As you know, as the pandemic continued, all companies reduced the number of their employees in the field/office, which caused congestion in ports. Incoming vessels could not be discharged on time, containers discharged from vessels could not be unloaded on time, and goods were leaving the ports late. This situation caused a great imbalance and delays, especially in the transshipment ports.
Even nowadays, delays of 30-45 days occur especially at the transshipment ports to Latin America.
Agencies wishing to eliminate these backlogs at the ports and continue their operations have closed their voyages to ports with congestion. In ports where the voyages continue but with delays, blank sailings increased and the calling points of the ships were changed.
With so few voyages, equipment, and port availability, it was impossible not to have allocation problems. Agencies reduced their heavy tonnage 20DC acceptance, and the demand for allocation on vessels increased with decreasing voyages. Even if you agree on everything with the shipping line, and container stuffing is done, the equipment cannot be loaded on the ships, bookings are delayed for weeks.In summary, the pandemic situation has expanded world trade to a point where it was not ready.