Port congestion, dumping rate continues to climb!

Completely crazy! The rate of container dumping caused by port congestion continues to rise! 39% of the cargo is affected, the shipping company’s rejection rate is as high as 56%. And the port is up to 64%! Blasting warehouses and rejecting cabinets, a box is hard to find...

The supply chain is like a very complicated network, and any node interruption may have a chain reaction. From last year to this year, the global situation of lack of containers, explosion of containers, dumping of containers, port jumps, and frantically rising freight rates has continued.

1: The rate of container rejections caused by port congestion continues to rise

Due to the congestion of foreign ports, the disorder of the logistics supply chain and the reduced efficiency, the container liner schedule has been delayed extensively. The on -time rate has dropped from more than 70% to the current 20%. The container cargo stays in the terminal for up to 2 months. The phenomenon of containers being dumped is even more common. According to Mark Lin, the port’s rejection rate in April was as high as 64% . And the shipping company’s rejection rate was as high as 56%.

According to new data from Project44, a well-known supply chain provider based in Chicago. The number of containers dropped at major container ports continued to rise last month, affecting approximately 39% of shipments. 
“For more than a year, shipping companies have been paying attention to the growth of their restocking rate. So far, they have not been able to alleviate this situation.” Josh Brazil, vice president of its maritime market, said. 
“Consignors and shippers need to accept this new reality. If they want to keep inventory on shelves and factories running, they will have to start structural adjustments to the supply chain and increase its visibility.” 

According to research, CMA CGM is The shipping company with the highest percentage of rejections last month was 56% , compared with 49% in April 2020.

It is closely followed by its subsidiary in Asia-Oceania, Australian National Line (ANL), which has a container rejection rate of 54% , an increase of 30% year-on-year. 
In addition, 2M alliance partners MSC and Maersk performed the best , with rejection rates of 28% and 34% respectively . 

At the same time, the rejection rate of Ocean Alliance partner Evergreen Shipping was 47% , an increase of 18% compared with the same period last year; the rejection rate of COSCO Shipping was 44% , an increase of 22% year-on-year; and the partner of THE Alliance, He The rejection rates of Burrot and ONE were 51% and 53%, respectively.

At the same time, due to the difficulty of the global container supply chain to deal with “general congestion”, the rejection rate of some large transshipment ports has also continued to rise. 
The worst performer was Port Klang in Malaysia. Its rejection rate increased by 7% year-on-year to 64% , which means that two out of every three boxes missed scheduled voyages. 

Followed by COSCO Group’s Piraeus port (Piraeus), 59% of the containers were dumped; Rotterdam port’s rejection rate was 54% , an increase of about 23% year-on-year, partly due to the week-long blockage of the Suez Canal . In addition, the rejection rate of Port Said at the northern entrance of the Suez Canal increased by 18% year-on-year to 41% .

Project44 stated that, with the exception of Dubai, which bucked the trend with a 7% year-on-year decline, “other global ports and shipping companies have reported similar numbers, showing bad industry normals”. 

“As cargo owners/shippers enter the second year of volatility caused by the epidemic, these figures are also reminding us that volatility and insufficient capacity are the new normal. ” 

“In addition, rates are almost generally rising , far higher. At the level of April 2020.” Project44 added. 

In the context of the global epidemic, there are still many uncertainties in the world economy and trade, which bring great challenges to the shipping market. All shippers and shippers should prepare logistics emergency plans to reduce unnecessary losses.

2: Who will be left out of the cupboard?

Shipping companies generally have a choice about which cabinets they want to dump. They are not based on a first-come, first-served order . Instead, they will give priority to those cabinets with lower freight rates , general relationships with the shipping company , orunimportant shipping companies . 

Therefore, if your cargo volume is small, you have nothing to do with the shipping company, and your freight forwarding strength is not strong , then the probability of your cabinet being dumped will be higher. 

Although it is all due to the shipping company, the shipping company is not responsible for it. Do you think it is overlord? No way, the shipping company is the uncle. 

The victims of dumping containers are the owner, the shipper and the freight forwarder. They may cause second customs declaration, delivery delays, and even lead to customer claims or loss of customers. The root cause of the problem of dumping containers is that the shipping company has not paid enough attention to the service in order to maximize the benefits and allocate more space. 

Although the shipper was scolding, the shipping company still went its own way. At present, there are no signs of solving this problem, and this problem will continue for a long time to come.

3 :Who will bear the cost of dumping the cabinet?

In the case of container dumping, the shipping company’s bill of lading has a disclaimer, which does not constitute a breach of contract. Therefore, shipping companies generally do not bear other costs other than the overall transshipment. Freight forwarding companies will require the shipper to bear a series of costs such as missing shipments. Moreover, the issue of container dumping at the port of departure involves the cost of the port of departure, and it is impossible to ask foreign customers to bear it.

Transshipment fee -due to the shipping company’s rejection of the container, the shipping company is generally responsible for unified transshipment. Even if you do not agree to the transaction, you can generally apply for a reduction or exemption.
Demurrage fee -due to the shipping company’s rejection of the container, it is generally possible to apply for a reduction or exemption.

Sea freight difference -shipping companies generally use the sailing date as the basis for calculating sea freight. Usually, the shipment in the middle or the end of the month encounters the container rejection, which is easy to slip into the next pricing period, and may encounter the risk of rising sea freight. But even so, it is generally not possible to apply for exemption, and the sea freight payment must be borne by the person who pays it.
Order modification fee -due to the shipping company’s rejection of the container, it is generally possible to apply for a reduction or exemption.

Note: Usually the shipping company will only dump the cargo once, but there have indeed been cases of two or three consecutive dumps. In order to avoid customer disputes, try to ask the freight forwarder to find the shipping company to request a written notification of the dump and communicate well with the customer.

It takes a long time to go by sea, and there will always be cases of dumping containers more or less. All we can do is to do our best to obey our destiny. We try to avoid what can be avoided, and remedy what can be remedied in time. If it doesn’t work, just go through the transshipment process normally.

Plan ahead of time when the tanks are easy to explode (such as major holidays, etc.) , avoid this time period as much as possible, and make the dumping occur as little as possible. Complete related operations as early as possible before various deadlines . Always pay attention to the cargo dynamics before the cargo is on board , and confirm whether the cargo is on board normally.

After receiving the notification of rejection,confirm whether there is still a chance to board the ship at the first time. If the goods are confirmed to be dumped, immediately contact the relevant transshipment, documents and other procedures of the operation. Communicate with customers in time , don’t conceal, and let customers accept it with a sincere and professional attitude.

 

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