Coronavirus leaves Europe exporters without empty containers
Extensive blank sailings have left virtually no empty containers available at European ports, according to the latest data, and extreme measures implemented to slow the spread of the coronavirus disease 2019 (COVID-19) could delay the recovery of container demand.
Container xChange's Container Availability Index
(CAx), which forecasts the availability of containers in particular
ports to allow better planning, shows there is almost no container
equipment in Europe and North America as a result of withdrawn
capacity and the inability of carriers to turn around boxes and
position them where they are needed.
Empty containers at terminals in the European hubs of
Rotterdam and Antwerp are at their lowest levels since the index
was launched in 2018, and shippers requiring empties for exports
from Europe say the containers are very hard to find.
"We don't have equipment for export to Asia as there
is simply no equipment," the logistics director for a large German
exporter told JOC.com.
Borders, shops, bars, and restaurants have been closed across much of Europe, with some areas placed under quarantine. While the measures are aimed at restricting the movement of people, there will be a knock-on impact on any part of the transport chain that requires human interaction, such as customs inspections, handling, or stuffing, according to a Monday coronavirus update by Container xChange.
No sign of empties
The growing disruption to cargo movement, and lengthy
turnaround times for the cargo that is still moving, is being
combined with an almost complete absence of empty containers and
blank sailings, Container xChange noted. Alphaliner estimated late
last month that up to 60 percent of weekly outbound capacity has
been withdrawn from the Asia-Europe and trans-Pacific trades since
mid-February, as well as from the intra-Asia routes.
Lars Jensen, CEO of Sea-Intelligence Maritime
Consulting, said the net effect of the equipment shortage in Europe
over the coming weeks will be a slowdown in the turnaround speed of
containers.
"This, in turn, will mean a slowdown in the
repositioning of containers to Asia — and hence further
increases the likelihood that we will see container shortages in
Asia when volumes pick up," he said.
Empty containers stacked up in Chinese yards are waiting for demand to return, and while US imports from China are increasing, demand from Europe in the short term is looking increasingly uncertain. With the major economies in Europe already in poor shape before the onset of coronavirus — IHS Markit data shows Eurozone 2019 GDP growth fell to 1.2 percent from 1.9 percent in 2018 — the measures will dampen consumer spending and weaken the appetite of companies to move into replenishment mode, according to Sea-Intelligence.
Sea-Intelligence said container lines could face a
volume decline of 17 million TEU and a shortfall of $17 billion in
revenue this year, while ports and terminals by extension would see
a throughput drop of 80 million TEU in 2020.
However, the analyst is predicting a strong rebound
starting in the fall or early 2021, driven by a combination of
consumers starting to spend money again and businesses needing to
not only cater to the increase in demand, but also restock
inventories.
"From what we have been seeing over the past week, it now appears clear that we will be getting a demand-driven impact on the supply chain going forward," noted Sea-Intelligence. "This impact is fundamentally different from the China impact, which was driven by a lack of manufacturing capacity, and the demand-driven impact will therefore be global in nature and also potentially much larger."