Boxport congestion back to pre-covid levels

Date: Monday, January 30, 2023
Source: Splash 24/7

Boxport congestion is now back to pre-covid levels according to one UK index. A key lever in the last couple of years of record earnings for liner shipping has disappeared, according to the latest data from Clarksons Research.

Clarksons containership port congestion index closed on Friday at 31.5%, a similar number to the pre-covid (2016 – 2019) average of 31.6%. Friday’s figures represented the lowest daily average since October 2019.

E2open, a supply chain SaaS platform, has recently published its Q4 2022 report, contained in which is data showing that as of January 1 this year, it takes a company an average of 63 days to deliver goods to truck or rail carriers after booking with an ocean carrier and completing the cross-ocean journey. This is an eight-day global average decline from the same quarter last year.

“The major drop in demand for goods shipping out of Asia has continued to reduce port congestion and resulted in shorter actual transit times,” the E2open report noted.

“Unless we get a strike on the US West Coast, we remain on track to revert to full normalisation by the end of 2023-Q1,” analysts at consultancy Sea-Intelligence predicted in a recent weekly report. “This means that we see sharply dropping demand combined with a significant injection of capacity due to reduced bottlenecks.”

Peter Sand, chief analyst at freight rate platform Xeneta, questioned the Clarksons data, agreeing with Sea-Intelligence that port congestion ought to be consigned to the “history books” by the end of the first quarter.

Sand noted that the congestion picture had been heavily obscured by covid in recent weeks, with China, where the disease has spread rapidly over the past month, experiencing congestion at its ports hitting highs not seen for two and a half years, while the US east coast is at one-year lows, and across Europe congestion is down to two-year lows.

“For the carriers, the declining congestion levels put added pressure on the freight market and the upper hand position that they have had during the covid years,” Sand told Splash.


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