Trade lane chaos from alliance reboot may last until June

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Dive Brief:

  • Ships and containers moving from pre-alliance schedules to new hubs has proved nearly disastrous, with stranded containers neglected at various terminals between Asia, the Middle East and Europe, The Loadstar reported Thursday.
  • Those in the know expect the chaos to prevail throughout May and into June, at which point it’s hoped that normal scheduling will resume. Underlying factors include ultra-large container vessels running off-schedule and crowding the port at Shanghai.
  • Forwarders are extremely frustrated with the lack of communication from both carriers and terminals. Liner shipping as a whole has even been called a “black hole” leading to unhappy shippers and distressed end consumers.

Dive Insight:

Prior to the implementation of the redrawn calling port routes, cargo shipping’s new Alliances were meant to provide stability to a broken market, limit overcapacity, and create transparency. Instead, according to shippers, prices have risen dramatically, capacity has been cut to the point of absurdity, and congestion is rampant. Instead of transparency, shippers subject to conditions in Shanghai have fog, both literal and metaphorical.

Poor planning is believed to be at the heart of the situation. The launch of at least 70 new services, which affected countless vessel sharing agreements, has created endless opportunities for inefficiency. Tensions are boiling over thanks to the situation and lack of transparency.

The European Shippers’ Council recently denounced the carriers involved in the current upset, believing them to be uninterested in fulfilling their obligations. Worst of all, the council reported that exports “have been waiting for up to 8 weeks” to be loaded, while “carriers provide no guarantee whatsoever” all products will be shipped while at the same time continuing to raise spot market rates.

In addition, shippers have long memories and the latest problems are but the latest. If carriers are to truly differentiate themselves, they should realize greater customer service, visibility and transparency are highly demanded in the industry.

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Filed Under: Freight
Top image credit: Peggy Marco, Pixabay

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