Fugly – from feast to famine in so many words ‘twould seem, and shipments once again moving in timely manners a pipedream always enticingly out of reach. From the COVID-exacerbated problem of no containers to move freight…

…Seven of the world’s 10 largest container ports are located in China, and more than 50% of the global container shipping volume is handled at Chinese ports, the main reason being that China is not only the world’s largest exporter but also the world’s second-largest importing country. This global structure governing exports and imports necessitates the formation of a China-oriented container positioning cycle in container transportation. After a full container is discharged according to this positioning cycle, the container needs to be quickly positioned in China, regardless of whether it is empty or full and then shipped to different regions once it is full. This cycle plan increases the number of containers exported from China and leads to an insufficient number of imported containers. In addition, trade volumes of containerized cargoes increase rapidly with the increase in China-based trade activity that typically occurs before the New Year [14]. The empty container shortage recently experienced can be attributed to all the commercial activities carried out in this process [22]. The emergence of COVID-19 in China, which is recognized as the export center of the world, during the period of the highest export volumes resulted in a rapid decrease of commercial activity in the country and a much more intensive container shortage problem in the world than ever seen in the past

…to the exact opposite problem now. Too many empty containers and a shortage of space to store them. The problem is worldwide, not just at congested U.S. ports.

On top of falling freight rates, data shows container depots — used to house containers after they are unloaded — are now filling up or full.

It points to more signs of falling global demand and an impending economic slowdown.

…Italian container depot owner Sogese chief executive Andrea Monti told Container xChange his depots are full.

“Whatever was coming in and out of, for instance, our Milan depot is quite stuck. And the container volume at the depots is increasing to an extent that we are returning some requests for depot service agreements.”

“We are in a situation where we are not able to accept new clients for some locations.”

There’s an interesting video here on how labor problems at German and Dutch ports are causing problems for U.S. bound exports as well, and contributing to container ills.

Freight rates were actually beginning to stabilize and shipping was returning to something approaching normalcy as the world came out of its COVID induced hyper chaotic stage.

After two years of port congestions and container shortages, disruptions are now easing as Chinese exports slow in light of waning demand from Western economies and softer global economic conditions, logistics data shows.

Container freight rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on routes between Asia and the U.S. have also plunged, data shows.

“The retailers and the bigger buyers or shippers are more cautious about the outlook on demand and are ordering less,” logistics platform Container xChange CEO Christian Roeloffs said in an update on Wednesday.

…The latest Drewry composite World Container Index — a key benchmark for container prices — is $3,689 per 40-foot container. That’s 64% lower than the same time last September after falling 32 weeks in a row, Drewry said in a recent update.

The current index is much lower than record-high prices of over $10,000 during the height of the pandemic but still remains 160% higher than pre-pandemic rates of $1,420.

Then the global economic slowdown hit and things came to a screeching halt. Inventories were growing here in the States, so orders dropped. As this fellow says, the Christmas ordering season, “didn’t happen”…

…Monti told Container xChange that the peak season of goods shipments — as Christmas looms — “technically did not happen this year.” Retailers are cautious about the high level of inventory they have on hand, Monti said.

“There is enough inventory with retailers,” Monti said.

“What has happened now is that the cargo is ‘on time’ again and hence you’ll see a slowdown in new ordering as companies adjust to more efficient turnaround times in ocean freight delivery.”

…which is having a ripple effect throughout the entire freight industry. FedEx is parking planes…

The latest to warn about weakening economic growth is FedEx CFO Michael Lenz telling an audience Tuesday at the Robert W Baird Global Industrial Conference that the company has reduced flights and parked planes to cut costs in response to soft demand for package delivery.

…while Maersk and other major ocean shippers are cutting capacity. What does that mean? Less boats.

An increase in blanked, or canceled sailings, from Asia bound for the U.S. is hitting some of the biggest domestic ports hard, including the Port of Long Beach and Port of Savannah, reducing their ability to ship exports. The decline in vessels coming from Asia on the Transpacific route is creating an increase in the wait time, or dwell time, of export containers at the Port of Long Beach.

…“We are projecting 28 blank sailings for Q4, which represents approximately 15% of our quarterly vessel capacity,” said Mario Cordero, executive director of the Port of Long Beach. “As shipping lines reduce their vessel calls in the form of blank sailings, this reduces the capacity for outbound volumes. That said, we continue to prioritize exports over empties, which is one reason empties are ticking up on terminal.”

Cordero said that the port anticipates loaded imports to continue to taper off for the rest of the calendar year.

The railways are having their own issues, still, with moving container chassis to the smaller East Coast ports from the big ports like LA so they can get some of the excess containers and freight moved to storage or their end destination. The one positive will be lessening the number of ships waiting to be unloaded. The “dwell” time or time it takes from arrival in the harbor to being unloaded has been steadily improving.

…According to MarineTraffic, the Port of Savannah continues to see the largest number of ships waiting off port limits at 30, waiting for an average 5.7 days to get into port. The height of vessels waiting off the port was more than 40 in July. In September, Georgia Ports Authority (GPA) executive director Griff Lynch said it was beginning to see signs of a correction in the market.

MarineTraffic is now seeing a decrease in arriving vessels. “While port congestion in Savannah remains high, since November 7 we are seeing a reduction in the number of vessels served,” said Alex Charvalias, MarineTraffic’s supply chain in-transit visibility lead.

Export dwell times at the Port of Savannah have shown some recent improvement, according to port metrics. The average of an export container is approximately 6.82 days, down from 8.34 days in the second week of October and 7.35 days on November 1.

Maersk is gloomy on the global outlook. I guess they’re not buying the Bidenomics.

And it’s not FedEx. Maersk, the world’s largest owner of container ships, lowered its outlook for the growth of 2022 global container demand, forecasting 2023 could be worse. There are even reports that the company is canceling sails.

“There are plenty of dark clouds on the horizon,” the company wrote in its latest earnings report, adding, “this weighs on consumer purchasing power which in turn impacts global transportation and logistics demand.”

When you think of how we’ve sold our souls to the Chinese for everything, even necessities like medicines, the possibility of canceling the ship that had your pharmacy’s refill order on it is a pretty sobering thought.