There is growing agreement in the maritime industry that current supply chain disruptions will persist throughout 2022.
Alphaliner reported a 26% surge in container ships purchased in 2021, the equivalent of 1.94 million twenty-foot equivalent units (TEUs). In the charter market, rates have reached record highs. Alphaliner said liners have acted to secure tonnage before current charters expire and for up to five-year durations. The confidence shown by the industry strongly implies a market decline is not on the horizon.
Matson’s CEO, Matthew Cox, said last month he expected Trans-Pacific congestion and consumer demand trends to persist through the October peak season at minimum. He added there would be elevated demand for its China service for most of the year. Zim’s CFO Xavier Destriau indicated in August 2021 that overcapacity threats from newbuilds scheduled for delivery in 2023 and 2024 were unwarranted.
“Congestion of land infrastructure, particularly in the U.S., will continue to adversely impact fleet efficiency. Operational constraints in the U.S. are likely to persist,” and “landside bottlenecks” would “partially offset the net fleet growth reflected in the increased orderbook,” he said.
While the Biden administration and the ports continue to focus on ways to ease the supply chain crunch, it remains to be seen if any significant progress is possible until U.S. import demand reduces considerably.
If supply chain pressures and port congestion persist into 2023, it would mean a lengthier period of much higher transport costs and much longer transit times for cargo shippers.
Congestion at U.S. ports have worsened compared to a year ago. As of February 1, 2022, there were 101 container ships idling offshore and waiting for berths at the ports of Los Angeles and Long Beach, up from 40 in 2021 (see Figure 1).