Feast or famine? 2022 was a year of plenty for carriers - what good can be expected from 2023?
 This looks like our first normalised shipping year in some time, with its slack seasons and peak seasons with the usual conflicting opinions among shippers whether to buy into a long-term contract or rely on the vagaries of spot markets.
The last two years have been extraordinary - perhaps even once in a lifetime experiences - as rates rocketed beyond the stratosphere driven by with both high demand for slots, and their lack of availability, combined with industry-wide deteriorating service and increased unreliability. For shippers to have this sector-wide failure rewarded by record carrier profits was truly maddening, but somewhat cushioned by the explosive growth in ecommerce occasioned by the medical madness that gripped the planet.
Not only was ecommerce buoyed by Covid-driven lockdowns, but also caused increased demand for things as the provision of services was effectively blocked by the mandates and bans pouring forth from of the health care bureaucracy.
Much as the shipper community would like the blame ocean carriers, there was no serious skullduggery afoot from that quarter, despite efforts by the authorities to blame the usual suspects if only to shift blame away from themselves, the real culprits of the chaos.
Because it was the bureaucrats who were at the root of the problem, this being the continuing spread of the Covid scare that mostly killed the very old and the very sick, that is those with underlying terminal medical conditions. That is, people one expected to die anyway - literally, timely deaths. But the reigning idea was to ramp up the panic worldwide as long as they could so that it began to look like - with some justification - an evil alliance between the bureaucrats and the pharma sector.
Shippers, of course, had their usual justified beefs against the carriers' demurrage and detention charges - toujours, le meme choses! Undoubtedly, there was cheating - it is the waterfront, after all. Still, it was maddening to be fined for being unable to pick up and deliver containers to and from ports and railyards despite making every effort to do so.
But again, this can be blamed on the bureaucrats who threatened to shut down this and that business. Shanghai closed the whole port - the world's busiest! - when a crane driver came down with the flu. Children had to wear masks when it was plain early on that they were in little danger for getting anything more than the flu in 99.9999 per cent of the time.
Because no one could be sure that the next bureaucratic whim would not shut down the factory or port one needed to function, everyone who could make something or ship something did so before the next mandate or ban was decreed.
This brought on an unnatural and unseasonable demand for slots that sent spot market rates rocketing. Bigger ships with bigger loads were filled from stem to stern with cargo shippers feared would be stopped on the next bureaucratic whim, which always feared the worst rather than gauging what would be the most likely outcome. It was a case of the prevention becoming the disease.
Jam packed enormous ships, averaging 10,000 TEU, waited for weeks outside major ports. More than 100 ships at peak congestion could not find a berth on arrival at Los Angeles and Long Beach. More ships were scooting through the Panama Canal, now enlarged to accommodate 13,000-TEUers when before it could only manage 4,500-TEUers. These ships now went to Houston, Mobile, Savannah and Charleston, even as far as New York giving these ports record tonnage volumes because of the Covid scare.
If LA-Long Beach was not prepared to handle these ships, Gulf and east coast ports were in even worse shape. Not only did they await berths there, there was the rail congestion to deal with too. Every time a mega ship arrived, it dumped thousands of containers on the dock at one time. But before the first lot of was cleared away, a second, third and fourth dump arrived with a fifth, sixth and seventh waiting in the queue just behind.
Some were trucked away. Some were removed by train. Now truck depots and railyards throughout America and Europe were faced with regular gigantic waves of containers that were slow to clear, coming in great clumps one after another as they did.
Now that is over and great floods have drained away, one expects a famine after the feast. Inflation is likely to eat away at downmarket purchasing power putting a damper on high volume shipping and burgeoning ecommerce. Covid scare lockdowns boosted purchases of things when entertainment services were blocked by mandates and bans. But now that condition applies no more.
Even air freight enjoyed a boom as shippers, desperate to get their goods to treasured customers, paid premium prices to deliver on time. This unexpected surge undoubtedly played a role in the decision of Maersk, MSC and CMA CGM to enter the air cargo field. One hopes these moves were not premature based on a situation that arose under extraordinary circumstances that lasted two years, but cannot be expected to continue into the future when conditions have changed so profoundly.
Unless there is a spirited turn around in the West, that brings about upbeat Singapore-on-the-Thames attitude to the UK and a pro-business attitude to America, one has little hope. What hope can there be with an openly espoused woke-ish slow-growth, no growth attitude prevailing in the governing councils of the West, and major corporations such as Maersk, MSC and CMA CGM buying into this agenda of ever tightening restrictions on freedom of choice? |
