World's shippers furious at 'chaotic' state of ocean freight and call for industry reform

Fri 19 Feb 2021
Posted by: William Barns-Graham
Trade News

Shippers worldwide are “furious” at the chaotic state of the ocean freight market and the lack of regulatory mechanisms in place to resolve it.

The Global Shippers’ Alliance (GSA) told Lloyd’s Loading List that continued high demand, tightened vessel capacity and a lack of available empty containers in key locations is impacting trade flows and supply chains, leading to increased freight prices. 

Ports jammed

Godfried Smit, Secretary General of the European Shippers’ Council (ESC), said outbound freight rates have risen five-to-six times for exporters.

“Many major European ports are jammed, while container ships are waiting for a berth,” he said.

“Inbound containers are sitting in the terminals to be cleared and shipping lines are refusing outbound bookings because they want to expedite return of the containers to the Far East”.

Blank sailings

According to GSA chairman, Denis Choumert, the situation is causing a deterioration in reliability and visibility.

“Ships are skipping ports and even cancellation of the entire string is common,” he said.

“We call this practice ‘blank sailings’ and their number in some trade increased as much as 30% lately. As little as 50% of ships arrive on-time – this affects the whole supply chain.”

New charges

According to the GSA, shipping lines have taken advantage of the situation with new charges such as booking confirmation, no-show and late-cancellation fees.

The GSA – which comprises the Asian Shippers’ Alliance (ASA), the European Shippers’ Council (ESC), and the American Association of Exporters and Importers (AAEI) – is calling for a review of regulatory mechanisms for protecting the well-being of the global supply chain, particularly the shipping industry.

Cancellations falling

‘Blank sailings’ occur when a voyage is cancelled or a port-stop skipped.

ShipInsight reports that the number of blank sailings has actually fallen over February and March 2021 on the three main East-to-West shipping routes.

Figures from supply chain intelligence company eeSea, show 1.7% and 0.6% cancellations respectively for the months, compared to the 19.9% and 9.4% in the same months last year.

However, last year’s figures were distorted by the emerging impact of the Covid-19 pandemic on shipping and global trade.