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Potential for Asia container shortages due to West Coast congestion

Greg Knowler, Senior Asia Editor | Nov 25, 2014 8:08PM EST

News Link: http://www.joc.com/maritime-news/container-lines/hanjin-shipping/potential-asia-container-shortages-due-west-coast-congestion_20141125.html

One potential consequence of the congestion at West Coast ports — a shortage of containers in Asia due to difficulties repositioning them back from the U.S. — is being watched closely but does not seem yet to be creating widespread problems.

Some carriers are seeing container shortages due to the West Coast gridlock. A spokesman for Hanjin Shipping said the carrier was facing container equipment shortages in Asia.

“This is mainly due to the congestion taking place on the U.S. West Coast. The congestion is causing frequent port skips and delays of services, which lead to irregular deliveries of container equipment to Asia,” she said, adding that it was hard to tell whether the shortage would continue until Chinese New Year in February, “but it seems less likely that it will be solved” soon.

Other carriers have not seen the issue crop up, at least not yet. OOCL director of trades Stephen Ng said he was not aware of any shortages of containers. “However, the situation is very fluid, especially with the slowdown in the U.S. West Coast ports,” he said. He added it was “a bit too” early to forecast whether equipment would be in short supply in the run up to Chinese New Year.

A senior U.S.-based carrier executive on Tuesday said it’s “indeed it’s a challenge,” to reposition empties from the U.S. to Asia due to the West Coast congestion. “It’s definitely more difficult,” he said, adding that “eventually it could develop into an issue, but not yet at this moment.”

Part of the reason for concern is railroads restrictions placed on the loading of westbound empty containers at Midwest rail ramps, a situation described in this article published on Tuesday by JOC.com's Bill Mongelluzzo.

Another senior U.S.-based carrier executive who asked not to be quoted said the issue would likely be more severe for smaller carriers that don’t have the same global scale as carriers like Maersk, CMA CGM or Mediterranean Shipping Co. Those carriers have the ability to offset a shortage of empties in Asia with containers repositioned into the region from elsewhere.

The potential for a shortage of empties in Asia is being closely followed because of the ever-present possibility that capacity shortages could emerge with little warning, stranding shippers’ cargo and leaving them scrambling for limited equipment or space on ships. Even though the industry is entering its traditional slack season in December and January, eastbound trans-Pacific volumes have been strong and a surge could develop in the runup to Chinese New Year when factories throughout the country shut for ten days or more.

Contact Greg Knowler at [e-mail] and follow him on Twitter: @greg_knowler.