PAGE Blog Business Weekly Magazine
Most of our Chinese customers are back at work according to emails we received last week. Right when the coronavirus has hit Europe, China slowly seems to finally gain more control of the situation. What happened? For the first time, there is almost no container equipment in Europe and Northern America due to the carriers blank sailings. They want to be ready in China, waiting for the economy to go up again. Alphaliner estimates that about 60 percent of the Asia-Europe sailings have been withdrawn. Now as the virus gets worse in Europe and the US, equipment turnaround speed puts even more stress on shipping lines. As most countries in Europe have shut-down operations, container inspections, handling or stuffing — every part of the transport chain that requires human interaction — are heavily delayed.
Looking at Shanghai (CNSHA) we can see direct impact of the coronavirus as the delta between the curves for container availability 2019 and 2020 grows over the week, starting from the beginning of the year. Last year at the same time, the CAx value for 40DCs was 0.29 indicating a deficit of containers, now a value of 0.88 in 2020 is indicating a huge surplus. The Container Availability Index covers millions of containers being moved and tracked through Container xChange, an online platform that helps freight forwarders find empty containers for one-way use.
The opposite situation in Los Angeles, a location that is famous for its surplus of equipment has now difficulties. Instead of having a bigger surplus (last year’s values for 40DCs range from 0.52 to 0.99 for 40DCs) the port is at an all-time low with a CAx value of 0.08 for 40DCs in March 2020.
In response to the carriers blank sailings we can see some companies switch to rail freight, but the equipment situation is not yet getting better for most shipping companies. “We need your special help to our business in 2020 to help us to overcome the difficulties”, says an email we have received from one of our Chinese customers. Although it seems like Chinese successfully fights the coronavirus, with more people being infected in Europe we estimate that the situation will not get better during the next weeks. Even if the Chinese economy would be back to usual productivity, we’re a few weeks behind regarding the pandemic development.
