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Insiders Expect Container Shortage at Chinese Ports Amid Red Sea Crisis

Thursday, 08 February 2024 | 14:00

After the Red Sea crisis forced ships to extend their routes around the Cape of Good Hope, industry insiders have expressed their concerns about a possible empty container shortage at Chinese ports after the Chinese New Year holiday.

The Red Sea crisis not only affects transportation in local waters but also impacts the global shipping industry and supply chains, Chen Yuanhan, vice president of C. H. Robinson North Asia, told Yicai, adding that the ripple effects are just beginning to show.

Circumnavigating Africa increases the cost and time of cargo arrival on the Asia-Europe route and may also affect the shipping capacity and equipment availability of all trade lanes, including a possible shortage of empty containers, Chen noted.

“Equipment shortages are becoming more severe at Asian ports on most trade lanes because of longer transit time and limited global ocean freight capacity,” according to a notice sent to customers by US transportation giant C. H. Robinson.

The detour has led to higher shipping costs and increased number of arrival delays, which in turn caused an extension in the return cycle of empty containers and a drop in the number of empty containers available, Liang Yanchang, general manager at Chinese cross-border logistics firm EC Express, told Yicai.

During this year’s Chinese New holiday, it will be unlikely to see an accumulation of empty containers like last year, Liang added, noting that the situation is expected to continue also after the holiday.

However, while some ports may experience an empty container shortage due to delays in vessel arrivals, others may see a periodic accumulation of empty containers, Chen Yang, editor-in-chief of Xinde Marine News, a shipping information consulting platform, told Yicai.

Firms enaged in foreign trade should use less-than-container-load ships to reduce transportation costs, even though their loading time is one to two days longer, as LCL vessels’ transit time is the same as that of full-container-load ships, Chen suggested.

In FCL vessels, each client has its own filled and sealed container, while in LCL chips, goods of several clients are loaded into one container.
Source: Yicai

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