In the 27 years of BOC International’s existence managing logistics supply chains and transpacific transportation, we have never experienced such turmoil, disruption, delay, cargo congestion, lack of capacity, lack of equipment, as we see today. Unfortunately, we are forecasting that it will become worse each day in the next two months. We think it is our responsibility to be transparent and share all market conditions with our customers. We are partners and need to communicate openly and tackle challenges together. As 2020 comes to a close, we feel we are approaching the nearest we have ever come to a logistical Apocalypse.
BOC would like to advise you of some observations we see in the marketplace to help you manage your supply chain.
- Despite the entire global fleet of ocean capacity being launched in the Transpacific Market, the backlog of tens of thousands of containers continues to grow larger each day.
- Empty Container availability in Asia is approaching a new record low, and containers are scarcer every day in most Asia origin ports.
- Container volumes in October jumped 23.7 percent from a year ago. Container volumes in November jumped 28.2 percent from a year ago.
- Globally, carrier on-time performance in October reached a record low of 52.4 percent. November on-time performance is approaching a new record low of 45%, as we wait for the final numbers to be calculated. The average vessel delay globally in October was 4.86 days. The average vessel delay globally in November was approximately 6 days.
- Containers are rolling over 25%-50% of the time, depending on the carrier. Particularly at transshipment ports, we see a high percentage of rollovers with cargo sitting 7-21 days.
- Many USA ports are overwhelmed with container volume, and some setting record volume months in the history of their port operations (Savannah and Virginia) in November. The heavy volume has caused tremendous delays to pick up cargo and drop off empties. Up to 20 vessels have been seen at anchor waiting to be unloaded in the LA/LB harbor.
- Excess demurrage and detention are being accumulated due to a lack of chassis, inadequate trucker capacity, and terminal operation volume constraints. Cargo is difficult to pick up and drop off throughout the USA Ports and Container Yards.
- Multiple carriers have announced they will temporarily suspend the cargo’s acceptance from/to South China side ports via transit ports from 1/15/2021 to 2/23/2021. This policy of suspending feeder vessel service in South China will add to a further backlog.
- Carriers are reducing and in some cases eliminating the release of any new fixed-rate and spot rate bookings. We are also seeing some cargo that is already booked being canceled and encouraged to rebook at spot rate plus a premium surcharge.
- Transpacific container transportation costs have now achieved all-time highs. Costs are now 200%-500% higher than in May 2020. We see this trend continuing to at least March.
Please contact your BOC representative to guide you through these challenges. Together we will navigate the storm and find the best solutions to minimize the damage and satisfy your customers’ needs.