01/26/2021

The TPEB situation remains challenging.

The container equipment situation has not improved yet although some industry analysts predict that some relief will be seen in the second quarter of 2021 when new containers will be delivered to the carriers and some of the currently misplaced containers have been repositioned into the Asian origins. It is expected though that this equipment will be moved to the major base ports and not the hinterland / inland ports where a lot of cargo originates, further creating logistical issues at origins.

Carriers are currently adding capacity with extra loaders on the major trade lanes to offer relief to the origin ports in Asia. However, the equipment shortage has vessels leaving Asia with about 70% utilization while there are expectations that manufacturers will continue production, possibly at somewhat reduced levels, during Chinese New Year which would add additional demand into the market instead of allowing carriers to alleviate issues during a lower-demand period of a normal holiday schedule.

Vessels and equipment then arrive at West Coast ports that are already congested with vessels anchoring outside the port complex for several days waiting for berth space, that face equipment problems due to missing chassis and rail equipment, and that now in addition have to deal with a potential Covid outbreak that might negatively impact the labor availability.

These issues have led to carrier schedule reliability dipping to 50% in November, a low not seen in the industry for a long time. And they are now causing the carriers operational problems that will result in blanked sailings at a time where the market cannot really take a reduction in available capacity in Asia – however, with all available vessels in service the carriers are not able to move some these ships back to Asia quickly enough to punctually start their scheduled sailings from there again.

There is still no expectation that the situation in the TPEB market will dramatically improve in the first quarter of 2021 and a continuation of equipment and space shortages coupled with high rate levels and premium surcharges will remain to be the norm for an extended period of time.

Please contact your V. Alexander Sales and Customer Service Teams to discuss your individual freight needs and find possible solutions for your supply chain.