Maersk accelerates new container availability to alleviate equipment shortages

The world’s largest container line Maersk is accelerating the addition of new containers into its fleet in response to continuing and in some cases worsening equipment shortages in various parts of the world that are limiting lines’ ability to take on new bookings.

In an update to customers this week, Maersk said it “still expects the Suez Canal closure to impact schedules and port calls well into May, as vessels are brought back on their fixed schedules”, but it expected the current challenging conditions to continue into the third quarter.

Although Maersk, along with some other lines, have resumed taking short-term bookings “across the board”, the carrier stressed that it could only do so when vessel capacity, port capacity and equipment availability permitted it to do so, noting: “The integrity of our products and customer promise is paramount to serving all our customers and we must ensure that what we sell to our customers, we can deliver. We are deploying all our current capacity to lessen the impact on our customers’ supply chains.

‘Responsibly accepting bookings’

“As we get more visibility across the supply chain, we are responsibly accepting short-term bookings across the board. Please note that full acceptance of short-term bookings is being determined by port and equipment availability, as well as the timeliness of getting our services back on schedule. As there will be local variations depending on the load port in question, we encourage customers to check short-term availability online via Spot on Maersk.com or via your local Maersk agent.”

Maersk added: “Equipment supply and the repositioning of empties remains a concern, but to further lessen the impact on our customers’ supply chains, given the extraordinary market conditions triggered by both the global pandemic as well as the vessel blockage at the Suez Canal, we are accelerating the injection of new dry containers into our fleet. By the end of the second quarter, we will have added around 260,000 TEUs. This comes after the 400,000 TEUs already added to our fleet from July 2020 to January 2021.”

Hapag-Lloyd order

Other lines have also been attempting to mitigate the recent container equipment shortages with further container orders. Last week, Hapag-Lloyd said it had taken further steps to try and alleviate the shortage of container equipment, with a further $550m order for 150,000 teu of dry and reefer boxes, and 8,000 specialist containers.

Some of the 150,000 teu of standard dry and reefer boxes have already been delivered this year and integrated into Hapag-Lloyd’s container fleet, but the majority of these boxes will be delivered by Chinese manufacturers in the months ahead and before the end of 2021.

Chief executive Rolf Habben Jansen commented: “The container shipping industry is currently seeing unprecedented demand, which has led to a shortage of containers all over the world. With its recent container orders, Hapag-Lloyd is contributing to efforts to ease the current situation.”

Hapag-Lloyd has already ordered 300,000 teu of containers since the beginning of the crisis.

“On top of the pandemic and delayed shipments due to port congestion, shippers and forwarders worldwide have had to cope with an added complication: a shortage of boxes to ship their goods,” the carrier said. “The fact is that because boxes are turning slower, shipping companies need more than the normal number of containers to carry the same volume.”

The existing situation has been exacerbated by the closure of the Suez Canal, and Habben Jansen said earlier this month that he expected container availability would remain tight for another six to eight weeks. “Equipment remains tied up on ships waiting outside ports and from extended dwell and transit times on the land side,” he said.

The new normal

Looking at the wider overall picture of market disruption, Maersk noted that it was doing all it could to minimise disruptions, but these were to be expected for several more months, noting: “The new normal is still being determined, but we expect the situation to remain tight into the third quarter. Ports and infrastructures remain bottlenecks and because of this, ocean and inland delays are likely to continue in and out from high demand locations. Our teams are working around the clock to alleviate pressure points.”

A recent report by container trading platform Container xChange indicated that equipment shortages across the main trade lanes look set to continue, despite efforts by carriers to reposition and bring additional capacity into the market.

“The relentless pace of container shipping trade since the summer of 2020 is not easing and this is reflected in equipment shortages in Asia, and elsewhere,” said Johannes Schlingmeier, chief executive of Container xChange.

“We expect markets will tighten even further in the coming weeks as the ripple effect of the Suez Canal closure at the end of March further disrupts container shipping services and equipment availability.”

Average prices for used 20 ft containers in China have risen 94% since last November from $1,299 to $2,521. The latest Container Availability Index data shows shortages also driving up prices at major Indian ports.

The price was being driven by the “urgent demand” for equipment in the ocean freight market, taking second-hand prices higher than those previously considered normal for newbuilding containers.

“It always depends on the exact equipment type, but before shortages became critical a standard used container which was a few years old would cost around $1,000 in China, while a brand-new container would be about double the price,” said Schlingmeier.

“However, in the current market, used containers are selling at $2,300-$2,600 across China, while prices for brand-new containers at Shanghai, for example, have skyrocketed by 64% in 2021 to an average of $3,390.”