Will enough containers get where they need to be? It’s a crucial question for the world’s ocean shipping network — a question that’s increasingly difficult to answer given how nebulous demand has become.
A shortfall of containers means cargo can’t move. At the same time, repositioning empties fills up ship slots and creates pricing pressure for full containers on the same vessels.
The empty-repositioning challenge was created by the enormous number of blanked (canceled) sailings from China to the U.S. and Europe in the weeks following Chinese New Year, when the coronavirus outbreak brought Chinese exports to a near standstill.
Normally, container ships bring loaded containers on headhaul runs to the U.S. and Europe. The boxes are emptied and then used for backhaul export cargoes from the U.S. and Europe.
The blanked sailings slashed the number of boxes arriving on headhaul routes, and at the same time, impaired the ability to return empties via the backhaul routes.
Alan Murphy, CEO and founder of Copenhagen-based Sea-Intelligence, told FreightWaves, “With the blanking of sailings due to headhaul volume shortfalls, there are a lot of containers in destination regions that will not get their intended return trip back to Asia, either laden with backhaul cargo or for empty repatriation.”
Problems caused by the lower number of empties returned to Asia “will be somewhat balanced by the fact that a lot of headhaul cargo did not move, leaving empty containers in Asia that are ready to go now,” Murphy explained.