Asia ocean westbound update

Further to our correspondence in July outlining the ocean market, we thought it pertinent to provide an update on what is currently an extremely challenging marketplace. In the following piece, we hope to provide some context to the current challenges as well as outline how SEKO are managing the situation and ensuring minimum disruption to our valued customers.

On an extremely positive note, the industry is seeing a very strong bounce-back on volumes after the lockdown from COVID-19 as customers re-open their supply chains and start to import in earnest again. This however is creating huge demand in a market where carriers have made major withdrawals of capacity. To provide some context, across the 3 major ocean alliances, there is currently in excess of 20% capacity withdrawal in August against the same time last year, with demand estimated to be up to 10% higher for the same period. It is therefore no surprise to see this delta create huge space crunches across all the Asia ports moving cargo westbound, especially into the UK. Some carriers have roll pools in excess of 6’000 TEU’s and have advised customers they cannot accept any more bookings for the next 2 weeks until there is control over the surplus. Other carriers are also highlighting that they expect shortages of hi-cube containers in the coming weeks due to draft issues in Hamburg - meaning containers are offloaded for export from Europe and not available at the Asia origin ports.

These issues are facing all carriers, NVO’s and BCO’s industry wide with reports in the industry media that even though clients are paying heavy premiums, they are still facing delays of up to 4 weeks to move their containers. Please click here to read an article in last week’s Loadstar highlighting the current industry challenges.

So, what are SEKO doing to mitigate disruption for our clients?

Hopefully the above has highlighted the challenges to everyone involved in importing from Asia currently but there are ways we can navigate these together. As we have continued to highlight, the real key to success through this period is working collaboratively with our clients to provide as accurate forecasts as possible to the carriers. We have worked hard over the years with clients in terms of accurate forecasting and it is extremely appreciated by our ocean carrier partners so they can plan the upcoming vessels accurately.

This tri-party collaboration enables us to have more flexible space guarantees than many of our competitors and enables us to plan for the shortfalls in space requirements ahead of time. We cannot stress how important this process is to expedite cargo as swiftly as possible from the origin ports. Even with this process in place, it is inevitable that some containers will not move on the intended vessel, especially if carriers decide to stop accepting bookings to reduce the roll pools. In this situation, your dedicated SEKO representatives will work with you where we can to decide which containers are the most important, so we can prioritise these shipments. We therefore ask for your help to work with us to provide accurate forecasts from each port for the coming weeks to minimise disruption.