Factory reopening in China could lead to box shipping space crunch
FREIGHT forwarders are warning of space shortages once factories resume operations in China, prompting some ocean shippers to switch transportation modes to air or rail freight
FREIGHT forwarders are warning of space shortages once factories resume operations in China, prompting some ocean shippers to switch transportation modes to air or rail freight.
CH Robinson's air freight director Vincent Wong believes that once the factories across China reopen on February 10 'there will be a rush for orders', he told UK's The Loadstar.
'The extended holiday doesn't only impact the factories, but workers, truckers, customs and offices across the country that are necessary to support the entire supply chain.'
Mr Wong said the forwarder was receiving new flight cancellations 'every day', with most American and European airlines suspending the majority of passenger flights to and from China, resulting in a 'huge decline' in bellyhold capacity.
'Ocean volumes have been slow since January,' he added. 'And we anticipate a rush to convert ocean to air when factories start to resume production to meet contract obligations as well as customer demand. We have received numerous enquiries for charter flights and the movement of medical supplies.
'And with an increase in demand for air freight and a reduction in passenger flights, there will certainly be challenges on certain key routes.'
While air cargo capacity has been reduced, major shipping lines have said operations were continuing as usual, apart from at Wuhan, the epicentre of the virus.
However, insurance agents Huatai Marine told customers that ports, including Shanghai and Tianjin, were experiencing congestion.
'The loading and discharging operations have slowed down due to lack of stevedores,' Huatai said. 'The land transport of cargo into or from the port is insufficient since trucks without a local licence are restricted to enter into the port area.
'As vessels are restricted to call at Wuhan port, transshipment of cargo by inland river feeder vessels in and out the ports on the Yangtze river is obviously affected,' the company added.
This was confirmed by CH Robinson, which said port congestion, barge shortages and slow booking releases were expected due to staff shortages. Furthermore, ocean carriers are blanking additional sailings and adjusting capacity out of China.
'While massive disruption to shipping schedules is not currently planned, that could change with shipping lines building-in depressed volumes and blank sailings for February and into early March,' according to UK-based forwarder Unsworth.
According to Fiata, one concern for forwarders is whether shipping lines will charge container demurrage and detention for boxes 'captured' in ports or freight depots in China.
Shipping lines have so far granted additional respite, announcing extended container free time in China until February 9.