As the traditional peak season for the logistics industry approaches, it feels that the current market has been a continuation of the 2020 peak season. In our July/ August issue, we will share our perspective on the latest market trends, challenges, and give insight on how Hamburg Süd aims to provide solutions.
While global demand for logistics services remains strong, the impact of COVID 19 is still causing supply side problems: low container availability, tighter air capacity, longer dwell times outside ports, and trucking and warehousing bottlenecks. The outlook for the rest of the year remains uncertain given the disruptions in both demand and supply.
- Demand: High household savings in the US and Europe should support consumer demand. As vaccination numbers rise and lock downs ease, more people are likely to travel, leading to more balanced spending on tourism and lifestyle related services. Nonetheless, it is likely that inventory replenishment will support demand until at least the end of 2021. The COVID 19 variants also add another level of uncertainty.
- Supply: Equipment shortages and capacity constraints will continue to be an industry wide challenge. There is little visibility on when improvements are expected, despite significant investment in additional equipment.
The Lastest Industry Update
We are excited to offer a new Hamburg Süd product Value Protect
In May, Hamburg Süd announced the implementation of Value Protect, which allows our customers to protect the value of their cargo against logistics risks during the journey with Hamburg Süd. The product provides alternative carriage terms and offers higher recovery limits for damage claims We have recently extended coverage to include more reefer commodities. Our local Sales teams are happy to discuss in more detail which package will make sense for your cargo.
We anticipate worsening delays in Europe and increasing empty equipment stock in North America. For Asia this means tightened equipment supply and scheduling delays.
Unprecedented port congestion because of rapidly increased demand and the impact of COVID 19 mitigation measures, has generated extensive delays on the services from Asia to North Europe. The accumulated delays have led to more than seven days for vessel schedules in addition to slower corresponding truck and rail service connections. The slower return of vessels to Asia delays imports, future schedule rotations and the supply of empty containers. As part of the Maersk group, Hamburg Süd’s equipment supply in Asia relies heavily on empty container return from Europe and North America
As contingency to the operational disruptions in South China (refer to our June market update), the sliding of several sailings led to an accumulation of empty containers in North America Initially volume reduced and there was temporary relief in equipment availability. With increasing congestion again, the result has been limited chassis availability for exporters and underutilized empty repositioning to Asia. To help combat shortages, we have introduced both Extra Loaders and Gap Loaders to help normalize the network and to move surplus empties back to Asia. Our success is still heavily dependent on customer’s support to return empty containers promptly, particularly in the Pacific Southwest.