Supply chains disrupted by European box export capacity crunch

European exporters are facing “a huge booking crunch” to secure eastbound ocean freight capacity that is disrupting their supply chains, with their representatives calling for constructive dialogue with shipping lines and other stakeholders in order to improve the situation.
The European Shippers’ Council (ESC) said its members report that many shippers who regularly export goods to Asia have been facing a large drop of available slots for containers on almost every shipping line. It said the main reason given by carriers of the two new alliances, The Alliance and the Ocean Alliance, was the reshuffling of their organization and the repositioning of their ships to start their new services next month.
ESC said: “Shippers are confronted with heavily damaging situations, ranging from breeching of contractual commitments by some liners to impossibility to get boarding slots before May. Either this results in a very fluctuating freight rates situation, with instant hikes up to 45% to firm up a booking, or this translates into missed sales, stock failure, and significant extra costs as some exporters are trying to circumvent these obstacles by using other modes.”
The shipper body said it had been warning stakeholders that some problems might occur after Chinese New Year “because 60% of the capacity on some lanes would be rearranged”. But it said “the magnitude of the turmoil” was completely unexpected, given the background of continuing structural overcapacity of the market.
“This disorder has a significantly more serious impact than the one caused by the installation of the previous alliances two years ago,” ESC noted. “It also comes only eight months after the very severe consequences of Hanjin bankruptcy.”