19-07-2021 Port congestion data reveals disruption upside for containerships, says Clarksons, By Gary Dixon, TradeWinds
Clarksons Research is putting greater emphasis on tracking port congestion, as its figures showed one-third of the boxship fleet was tied up in terminals during April. Analyst Trevor Crowe said inefficiencies in the supply chain had led to notable “disruption upside” for containerships, as well as bulkers, with rates at record levels in some markets. Capturing the scope of disruption from port congestion is a challenge, he admitted.
“Indicators derived from vessel position data are not always a perfect reflection of what’s happening on the ground but can be helpful at an aggregate level,” Crowe said. “Our port congestion indices count the daily volume of capacity in port; tracking that gives some indication of the scale of the bottlenecks.” Container demand has rebounded faster than Covid-19 issues have eased in key regions, Clarksons Research said. This has led to a shortage of box availability, with the return of containers hampered by disruption, and major port congestion deriving from efficiency issues related to local pandemic restrictions and vessels waiting for boxes.
At a “hot spot” such as Los Angeles/Long Beach in the US, daily vessel capacity in the first six months of this year averaged about 375,000 teu, up by more than 160% on 2019 levels. There have also been huge backlogs in southern China, particularly at Yantian and nearby ports. The share of total containership capacity in port has increased from an average of 29.2% between 2016 and 2019 to 31.8% since the start of 2020, and 33% in April this year. “That’s absorbing an extra 2.5% of fleet capacity, 0.6m teu, equivalent to 25 ‘megaships’ or more than the fleet operated by the seventh-largest global carrier,” Crowe said.
Clarksons lists Wan Hai Lines as number seven in the global list in terms of the number of ships, with a little more than 600,000 teu of capacity. Units waiting or slowing down while approaching ports and anchorages may be adding to the impact, he added.
Port congestion has also helped drive bulker markets. Clarksons Research calculates average earnings for the sector in the first half at $21,039 per day, the best since 2010. “Congestion has focused heavily on Chinese ports, with the Australia-China coal dispute leading to panamax delays in particular,” Crowe said.
Elsewhere, as well as general Covid-19 related inefficiencies, specific issues have arisen, such as strikes at Argentinean grain load ports and weather-related disruption in Indonesia, the analyst added.
The share of capesize and panamax capacity in ports has risen from an average of 27.1% between 2016 and 2019 to 28.9% in the first half of this year, and more than 30% in June. This extra 1.8% tied up, totaling 11m dwt, is more than the total bulker fleet of the eighth-largest owner, which Clarksons lists as Oldendorff Carriers.
“In addition to more conventional supply-demand trends, ongoing disruption is clearly now an important factor to track,” said Crowe. And pressures that lie ahead suggest that forms of disruption other than congestion are also likely to have an impact, he believes. Crowe concluded: “Whether current bottlenecks prove prolonged, or congestion starts to unwind, it will pay to follow the trends closely.”