Home / Shipping News / International Shipping News / Congestion is a Big Piece of the Supply and Demand Puzzle

Congestion is a Big Piece of the Supply and Demand Puzzle

Using VesselsValue data, Vivek Srivastava, Senior Trade Flow Analyst, explores the drivers of congestion in the Dry Bulk and Containership markets, amidst sharp declines in respective market earnings. This article looks into the implications of congestion trends in relation to supply and demand dynamics, macroeconomics and geopolitical trends. You can read the full piece here.

“The summer months of 2022 have seen a slow motion collapse in freight rates for both Dry Bulk Carriers and Containerships. For the former, the Capesize 54-TCA Index fell from USD 38,169 per day on 23 May 2022 to just USD 2,505 per day on 31 August 2022 and, for the latter, the Asia to US West Coast box rate slid from USD 7,900 per FEU on 16 May 2022 to USD 3,959 per FEU on 06 September 2022.

Perhaps the clearest example of congestion shifting between regions has occurred in the US. Shipping lines first diverted services to nearby San Francisco, then further afield to Portland, Seattle and even Vancouver in Canada. As average waiting times for Containerships all along the US West Coast climbed steadily from just over an hour in February 2020 to 111 hours in February 2021, then further still to a peak of 146 hours in October 2021, lines began diverting services to the US East Coast. The shift became so profound that LAX/Long Beach could no longer claim to be the main import hub for the world’s largest economy.

Containership Congestion Shifts from US West Coast to US East Coast.

Average waiting times for Containerships at Shanghai skyrocketed from 28 hours in early April (comfortably in the middle of the historical range for the time of year) to 69 hours in late April (more than double the top end of the historical range). In early June, by which time lockdown had been lifted, congestion had eased considerably, and average waiting times were almost back to last year’s levels…”
Source: VesselsValue

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping