Maersk Asia Pacific Market Update

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Strong Cargo Demand out of Asia is expected to continue in Q2.Our focus will remain on securing coverage and mitigating the shipment delays affected by rollovers and missed sailings.

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We see continued high export demand from Asia. However, schedule reliability is impacted by two main factors: recent delays from Europe via Suez Canal and lower port productivity especially on Transpacific and European trade routes. In both cases, we update all schedule information on Maersk.com and continue to take actions to ensure disruption is minimised. 

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Equipment shortage remains an industry-wide challenge in Asia. 
We will see the largest impact in the following week, starting on 19th April
until the beginning of May, as both empty containers coming back to Asia are delayed and import returns are lower. During those two weeks, we will see a tight equipment situation across a wider range of China ports, as well as Busan in Korea. From the 3rd May, the situation will be improving, and we expect empty container supply to normalise for the week of the 10th May. Maersk continues to purchase and charter additional equipments.

Below is the Asia Pacific regional equipment outlook based on the supply in the past weeks and demand forecasts. Please note that supply for the coming weeks will be highly subject to port congestions. 

• 20' dry containers: regional stock is enough to cover demand forecasts.
• 40' high cube dry containers: regional stock is currently not sufficient to cover demand forecasts. From this week onwards, equipment supply may be delayed due to port congestion and the Suez incident. Shanghai and Ningbo ports are majorly impacted as they provide the main bulk of supply to Europe. Furthermore, with all these delays, coastal re-positioning might be impacted.
• 45' high cube dry containers and 40' Non-Operating Reefers (NORs): Regional stock is not enough to cover demand forecasts.

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In Oceania, ports have experienced significant congestion over the past few months as a result of high demand, industrial action and labor shortage. We continue to make contingency schedule changes to reduce delays as far as possible. To assist customers importing cargo to Oceania, Maersk has introduced a new product "Maersk Connect" to expedite Full Container Load deliveries via alternative gateway ports. To alleviate container depot congestion, Maersk has invested in deploying additional vessel calls to evacuate empty containers and release depot space in surplus locations. In New Zealand, Maersk has introduced the Sirius Star service to improve network flexibility between Nelson and Timaru and global markets, while increasing our capability to reposition empty containers for export demand across the country.

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Air capacity of Indonesia and Philippines has been limited for a few weeks due to high export demand to the US and Europe. This situation is expected to continue into May. Longer lead times are also to be expected. For Indonesia, plan for an extra 3-4 days on top of the current lead time of 5-6 days to the US and for an extra 2-3 days on top of the current lead time of 4-5 days to Europe.  For Philippines, the current transit time to the US is around 5-10 days, while the transit time to Europe is around 4-6 days.
 

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With all international passenger flights to and from Australia and New Zealand on hold until further notice, the limited capacity across the district continues to be brokered on an ad hoc basis. Export capacity from Australia and New Zealand is subject to carrier discretion, with terms of booking subject to change.
 

Vietnam and Cambodia air demand has increased significantly, especially to the US. Carriers reduced flight frequency due to several reasons including high demand from the hubs and charter orders. The expectation is that space will remain limited until the end of April and beginning of May for both Vietnam and Cambodia, as these countries are about to enter long holidays. 

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Australia and New Zealand have agreed on a Trans-Tasman bubble which will start on 19th April when airlines begin to introduce passenger flights and capacity into the market.

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China air demand is still increasing. There is a growing market capacity from East and North China to the US, and high demand from South and North China to Europe.
 

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China Intercontinental Rail (ICR):  April capacity in all rail hubs has been fully booked out of China due to extremely strong demand generated by the Suez Canal incident. Our market intelligence indicates there may be some congestion in the cities of Manzhouli(China), Erenhot(China) and Malaszewicze(Poland) with an estimated average delay of about 3-5 days. Block train services from China to Europe are expected to be available to customers from May onwards. Customers who have urgent block train requirements should contact our sales representatives as quickly as possible.
 

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Inland Delivery: Trucking space is generally available without significant disruption across Mainland China and Taiwan. A capacity bottleneck still exists however on cross-border trucking between mainland China and Hong Kong/South East Asia, with limits on moves per day due to COVID-19.
 

Inland Hubs: Sea-rail products across Mainland China are up and running. However, equipment shortages across carriers are resulting in challenges for container pick-up at inland rail ramps. On the China-Mongolia corridor, service disruption at the border can be expected with an expected waiting time of over 2 days, caused by recent reports of COVID-19 cases appearing in Mongolia.

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Transpacific trade: missed sailings 
Based on customer feedback and market intelligence, we expect the strong demand from Asia to both the East Coast and the West Coast of North America to continue in Q2. The sustained surge in demand means that port congestion and delays – especially in the Los Angeles and Long Beach ports – will most likely not ease up any time soon. The congestion is also delaying vessel estimated arrival times into Asia by more than a week. The schedule delay of East Coast North America vessels is likely to be further impacted by the ripple effects of the Suez blockage. 
 
Missed sailings are occurring where we don't have spare vessels to serve the proforma schedule. As per the latest estimations, we forecast that there will be more than 10 missed sailings that might not be covered in the coming weeks due to schedule delays. Additional vessels to fill the gaps are unlikely to be available. However, we are working hard to secure more capacity. 
 
Maersk is doing our utmost to mitigate disruptions where we can, and are taking the following actions:  

• Launching a new weekly transpacific East Coast service - TP23 - to replace the significant number of extra-loaders and ad-hoc routing solutions deployed in past months. Check here for more details.
• Optimising cargo transfer plans and rotations to recover the schedule.
• Deploying available vessels in our fleet and chartering available capacity. (For example, X-PRESS ANGLESEY and Northern Promotion on the East Coast of the US.)