Why forecasting will beat the shipping challenge



In a customer advisory last week we outlined the current situation and challenges in relation to the inbound ocean freight container trade from Asia (China, Far East, South East Asia and The Indian Subcontinent) into The UK and Europe.

We highlighted the unprecedented challenges in Asia regarding space and, especially, equipment shortages, which have progressively worsened since Q4 and into 2021.

The shipping lines are taking actions to ease the issues including moving empty equipment from locations where it has been stuck at congested ports, procuring new build containers and reducing the usually high level of blank sailings that traditionally take place during Chinese New Year.

As well as continuing the replenishment of much needed equipment in areas where it is needed, it was hoped that the reduction in blanked sailing would assist with the backlog of laden boxes, or to be loaded boxes, stuck in Asian ports waiting export.

In addition demand for container movements globally is still incredibly strong and at an all-time high further magnifying the current issues on container shortages.

Shipping lines have been expecting the situation to improve post Chinese New Year, but are now indicating that they expect issues to extend into April and probably beyond.

We want to be as proactive and prepared as we can be, to anticipate and overcome challenges, to protect our customers’ supply chains.

Which is why we urge customers to share their booking forecasts, so that we can have visibility of – and prepare to meet – their container shipping requirements.

We recommend the following data, updated weekly:

– Six month rolling volume forecast down to container level

– Per week / Per port of loading / Per container size

– Prioritisation of purchase orders highlighting urgent and critical ‘must move’ orders so that we can place under scrutiny with added focus

We use this information to work with our shipping line partners to ensure equipment and volume allocations are at the correct levels, at the correct origins. Almost every container we ship currently is handled as a project movement and absorbs huge amount of time and administration so if we have visibility as early as possible this assists us in ensuring expectations are met and issues through late bookings can be avoided. We have a huge amount of resource dedicated to this function – so please help us to help you ensure that disappointment in the supply chain is avoided.

Aggregating forecasts provides advance warning, so we can act proactively ahead of any peaks or troughs, to protect shipment and booking requirements against our contracted allocations with partner carriers and manage capacity.

Bookings must be made at origin at least 14 days prior to cargo ready date and ideally 21 days prior, to give the best chance of securing space and equipment.

THE FOLLOWING IS BASED ON TODAY’S SITUATION

Market summary:

Asia ports generally facing a backlog of bookings
COVID19 Lock down in Colombo, leading to backlog
Colombo shipments switching to Port Kelang and Singapore for transhipment leading to congestion at these ports also
No Major improvement as yet to equipment shortages, especially in feeder ports or smaller regional base ports in South East Asia

Carriers are starting to restrict bookings and keeping their equipment for use out of China/ East Asia instead.

Asian Port Congestion summary:

China – Severely Congested

Hong Kong – Severely Congested

Taiwan – Moderately Congested

Vietnam – Severely Congested

Thailand – Moderately Congested

Cambodia – Severely Congested

Malaysia – Moderately Congested

Singapore – Severely Congested

Myanmar- Severely Congested

Bangladesh – Severely Congested

India – Moderately Congested
Sri Lanka – Severely Congested

Click on graphic to see summary of equipment availability (insert table of ports)

We monitor the container market across Asia continuously with our origin teams providing local updates and assessments, so that we can react swiftly to changing conditions and developments. 

While we still expect more market stability this year, all the signs are that we will face another challenging time through the 1st quarter at least.

Protect your supply chain and budgets for 2021, by providing us with your forecasts, so that we can secure you a fixed validity deal for the year ahead.

Call Ian Barnes and/ or Grant Liddell to discuss the latest market situation and your plans for the year.