Yang Ming chief financial officer Peter Su said today he believes container shipping has become so chaotic that it is hard to explain port omissions and skipped sailings to shippers
Mr Su said: “Ships have had to detour round the Cape of Good Hope because of the Red Sea situation and this has hindered operations, because it has tightened the availability of ships and containers.
“This is beyond any shipping company’s control.
“The market has become chaotic to the point that it’s impossible to explain skipped sailings . Obviously, arrivals in South-east Asia have been delayed because of port congestion, and for liner operators, omitting ports is a last resort.”
Alphaliner’s data shows that so far this, 1.48m teu of newbuildings has been delivered, out of 2.2m teu expected. However, cargo demand has still exceeded supply, with almost all available ships in use.
Mr Su said: “It’s been estimated that the Red Sea crisis will reduce supply by 15% to 20%, compared to capacity growth of circa 10% this year. Every Asia-Europe string now needs two to four additional vessels, at least.
“The inadequate number of vessels has affected revenue from Asia-Europe services. We must continue to pay attention to geopolitics and inflation. With the Q3 peak season, bookings for July are as high as for this month, and demand is obviously higher than in the same period last year. However, geopolitical tensions can’t be predicted and how long the market will stay prosperous must be reviewed every month.”
And Mr Su said the current upswing in freight rates could be a short-term occurrence, as there were “too many uncertainties, as nobody can predict when the Houthi attacks will stop”.
Linerlytica analyst Tan Hua Joo said that despite talks of a possible ceasefire between Israel and Hamas, a market normalisation would not happen in the short term.
He said: “The correction will only come about when ships return to Suez and the supply shortage is resolved. This could be months away.”
There is more on the ‘feverish’ container shipping sector here.