Pic: Container ship entering port

Report reveals extent of capacity restriction as a result of scheduled port calls skipped and blank sailings by lines during 2021. Certain regions will suffer economic impact hindering post-pandemic recovery

The MDS Transmodal (MDST) research, commissioned by Global Shippers Forum (GSF) found that global ports lost over a third of their expected capacity to ship containers during 2021, creating delays and disruption for shippers and economic harm to some smaller developing nations.

Lost Capacity is a measure of the total number of container ship slots that were expected to be available at the port but did not materialise because the port was skipped, or the entire service was blanked by the shipping line.

As the graph below illustrates, the ports of Colombo (Sri Lanka) and Piraeus (Greece) have been especially hard hit, with about 40 per cent of the expected container capacity failing to arrive in the last quarter of 2021, in comparison with a pre-Covid level of between 15-20%. In addition, in the European, Gulf and Indian Sub-continent (ISC) region, Felixstowe (UK) and Jebel Ali (UAE) failed to see around a third of their expected capacity.

In Asia Pacific, the picture reported (see graph below) showed similar levels of capacity lost with Port Klang (Malaysia) suffering a 40% shortfall and Melbourne (Australia) and Tauranga (New Zealand) down by around a third of the expected container capacity during the second half of 2021. In 2019, average no-shows at these ports amounted to between 10 and 15% of expected capacity.

Source: MDS Transmodal based on AIS (Automatic Identification System) data

“When we analyse the capacity offered by the shipping lines, two major elements are to be considered: 1. the intention to call (or not) at a given port and 2. the calls actually made,” explains Antonella Teodoro of MDST. “Looking at the data from 2019Q1 onwards, we observe that carriers have been reducing the scheduled capacity offered to some ports but also reduced the level of capacity actually provided. These reductions have translated in deterioration of connectivity with some countries losing direct connections.”

Most of the expected vessels would have already been fully occupied by containers collected at ports called at earlier on the service. Indeed, the decision to skip a port is often taken because there is no space on board to take any more, or so few spare slots as to make the call uneconomic. As a result, the collapse in service levels available to shippers at the ports affected, and in the hinterlands they serve over the period is stark, and amounts to far more than the inconvenience of having to wait for the next ship.

Source: MDS Transmodal based on AIS (Automatic Identification System) data

“Skipped port calls have multiple effects on shippers,” observes James Hookham, GSF Director. “They create local upward pressure on shipping rates, as shipping line agents ‘auction-off’ available slots on the vessels that do call. Shippers also face unexpected surcharges for the handling and storage of delayed containers. More pernicious is the wider effect on national economies, especially those of developing nations that lose opportunity to deliver their exports, and hinder the recovery of their economy from the effects of lockdowns and Covid restrictions”

“Ports reliant on calls from vessels on Asia-Europe strings have suffered especially badly, adding to pressures on local economies as they struggle to recover from the effects of the global pandemic,” continues Hookham. “Such schedule alterations translate into huge aggregate capacities lost to importers and exporters.”

He concludes, “Skipped ports and blanked sailings have evidently become central to the way shipping lines are managing the capacity of their heavily utilized fleets. As the pressures caused by the Covid-19 pandemic ease GSF will be monitoring the restoration of service predictability for shippers at these and other key global ports to ensure the benefits of service reliability and frequency promised by consortia and alliance operations are reinstated.”

The results of this on-going analysis of lost capacity will now become part of the regular quarterly Container Shipping Market Review for shippers produced by MDST on behalf of GSF.

Marex Media