Geneva, April 2023 – Shippers and forwarders organisations are calling for improved standards of data protection and confidentiality in digital trading and booking systems, in a joint statement issued today.

FIATA, the International Federation of Freight Forwarders Associations, and the Global Shippers Forum, have jointly issued an agreed Charter for Protection and Governance of Data in International Trade that sets out the minimum arrangements for data security and confidentiality that providers and operators of digital booking and trading platforms should adopt and incorporate in their End-User Agreements (EUAs). Recommendations in the Charter seek to enable a safe and trustworthy environment for conducting business based on a level playing field.

The Charter has been approved by members of both organisations and is believed to be the first declaration of rights for platform users in the trade and logistics sector.

Dr Stéphane Graber, Director General of FIATA notes that “FIATA is committed to enabling the shift of trade from analogue to digital form to increase efficiency and resilience of global supply chains.”

He continued: “In this journey, interoperability between platforms and their credibility amongst users are critical for success. This requires clear and fair rules on data exchange to protect confidentiality and ensure trust between stakeholders. FIATA is happy to lead this effort with GSF on the crucial topic of data governance and protection.”

James Hookham, Secretary General of GSF said:
“Digitalisation of international trade and transport paperwork offers huge savings and benefits for all parties in the supply chain, but its storage and processing comes with risks of loss, leakage and unauthorised use that could expose commercially sensitive patterns and trends.”

Additionally, he commented that “Our Charter sets out reasonable expectations of the protections that should be in place to respect the ownership of the data, protect its confidentiality and guard against unauthorised access and use”.

Notes for journalists/editors:

1. A copy of the Charter for Protection and Governance of Data in International Trade is to be found on this link.
2. Dr Stéphane Graber of FIATA is available for interview via legal@fiata.org.
3. James Hookham, GSF, is available for interview on +44 78 18 45 04 40

Containerised cargo volumes moved in the deep-sea container shipping market fell a further 2.5% during the final quarter of 2022, marking the traditionally busiest period of the year as the ‘peak season without a peak’.

Volumes have fallen steadily in the early weeks of 2023 and world trade continues to stumble as economies grapple with persistent inflation and high energy prices, suppressing consumer demand for goods across nearly all economic sectors.

Commenting on the publication of the latest GSF/MDS Transmodal Container Shipping Market Review, James Hookham, Secretary General of Global Shippers Forum said:

“This has stopped being just a supply chain or a shipping issue and shippers and carriers are firmly in the hands of global economic forces which are themselves responding to structural weaknesses in economies and to geopolitical tensions”.

“Predicting volumes and inventory requirements for the remainder of the year is a leap into the unknown for many shippers, as few but the most experienced will have encountered so varied a mix of influencing factors”.

With interest rates still high and Central Banks hinting they could go higher still, the inflationary effects of the Covid crisis and the crunch on consumer spending is lingering into the second quarter this year.

On the demand side, many carriers and service providers are anticipating a recovery in demand in the second half of the year, but this is more in hope than expectation – there are few economic signals to support such optimism.

The arrival of new shipping capacity, an apparent questioning of the benefits of shipping alliances and an inevitable reduction in utilisation of vessel space, is also changing the shape of the supply side of the equation in container shipping.

Shippers have undoubtedly benefitted from the dramatic fall in spot rates over the past nine months, with costs on many routes back to pre-Covid levels. But weak demand for their core products will be of more concern to shippers than the cost of their shipment. Whilst wary of the speed at which demand could recover – as seen in 2020 – many shippers are bracing for a bounce in rates that may not arrive for some time.

Shippers have also been enjoying have seen a sharp improvement in port call predictability with the number of scheduled calls actually made by vessels significantly improved over Q3 2022. This is the first time since in the reviews started in 2020 that the Service Quality Indicators have all been positive, albeit from a low base.

James Hookham concluded:

“This time it’s certainly different! How shipping lines respond to weak demand, manage existing surplus capacity, deploy new vessels and maintain port schedules, all in a year when every existing ship is being assessed for its overall fuel efficiency, will remain a key focus for our monitoring of the market. The dollar value of rates may look the same as 2019, but the market conditions are utterly different and even less predictable”.

Mike Garratt, Chairman of MDS Transmodal commented:

“Demand clearly fell while shipping line capacity grew marginally, improving shippers’ negotiating positions. Performance generally improved as rates fell and the return of more multi-regional services improved connectivity between markets. However, mean revenues per TEU remained high relative to costs as a consequence of the contract rates agreed the previous year, which is reflected in published liner company results for 2022. Several consortia continued to enjoy market shares of above 30%”

Notes to Editors

• Mike Garratt, Chairman of MDS Transmodal, is available for interview. Please contact +44 (0) 1244 348301

• James Hookham, Director of GSF, is available for interview. Please contact: +44 (0)7818 450440; secretariat@globalshippersforum.com

• Media Contact:  The Container Shipping Market Quarterly Review for Quarter 2 2022 is available in PDF format on request from Maria Udy, Portcare International. maria@portcare.com +44 (0) 7979 868539.

• The Container Shipping Market Quarterly Review is produced every three months and reports, interprets and comments on trends and developments in the container shipping market as experienced and understood by shippers – the importers and exporting businesses that own the cargo carried on container ships. Shippers are the customers of the container shipping industry.

• The Quarterly Review collates and reports outputs from MDS Transmodal’s established and respected Container Business Model and other tools that are relied upon by governments and international agencies around the world. Working with GSF, MDST has generated eight new indicators showing how the market is performing in terms that are relevant and applicable to shippers as users and customers of these services.

• MDS Transmodal (MDST, www.mdst.co.uk) is a UK firm of transport economists which specialises in maritime and all other modes of freight transport. MDST works with senior management in the public and private sectors to provide strategic advice based on quantitative analysis, modelling and sectoral expertise.

Global Shippers Forum (www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.

Global container shipping turned a corner in the second quarter of 2022 according to the findings of the latest Quarterly Review of the market produced by MDS Transmodal and Global Shippers Forum.

Covid lockdowns in China, suppressing supply of manufactured goods and demand for raw materials, and plummeting sentiment in consuming countries, due to rising interest rates and energy prices, contributed to a fall in average earnings per container carried for the first time since 2020. (Graph 4.1)*

While total container carryings were up on Q1, this volume remained below the level recorded in the same period a year ago (Graph 1.2). This was despite traffic that had switched to other modes or to bulk shipping earlier in the year returning to the more traditional containerised mode.

The reliability and consistency of port calls showed a small improvement in Q2, but this was seemingly made by intermediate port calls being missed altogether. The capacity lost to ‘skipped’ ports remains high (Graph 7.2).

A reshaping of container shipping service patterns seems to be underway with a further increase in Q2 of the number of services connecting no more than two regions, together with a reduction in those linking more than two regions (Graph 2.2). In practical terms this means long, multi-port ‘loop’ schedules are being replaced by ‘shuttle’ services with transhipments required at hub ports in order for containers to reach their ultimate destinations.

Mike Garratt, Chairman of MDS Transmodal commented, “In the last quarter we have seen global network capacity grow marginally but underlying demand stay flat. Spot freight rates are now falling steadily and it will be interesting to see as a consequence the share of the minor bulks trade that returns to the major lines. The direct connectivity and reliability of making port calls offered to shippers continues to deteriorate.

In welcoming the Quarterly report James Hookham, Director of GSF, said, “This is the first time the GSF/MDS Transmodal Quarterly Review is showing a significant change in the direction of travel. This is just one set of data points, but shippers are telling us the world economy, international trade and the global shipping market have entered a new phase, with different factors at work compared to the past two years.”

Over the coming months, GSF and MDS Transmodal will continue monitoring whether the opportunistic gains made by shipping lines since 2020 are consolidated into a strategic shift in rates and service patterns imposed on shippers, or whether different carriers will respond instinctively and distinctively to the changing conditions.

James Hookham continued, “This change in market dynamics could provide a context for the use of freedoms granted to shipping lines under anti-trust immunity and Block Exemption legislation to re-engineer an industry-wide shift in capacity deployment, service patterns, port call frequency and market share concentration. Recent experience has shown this is not a market where regulators can ‘legislate and forget’ hoping expected behaviours are observed.

The number of parameters needed to monitor the market are many and complex and GSF and MDS Transmodal invite competition regulators around the world to ‘watch this space’ with us over the coming months”.

*Note:  The Graph numbering refers to that employed in the Quarterly Review the full text of which is available on request as detailed below.

1. The Container Shipping Market Quarterly Review is produced every three months and reports, interprets and comments on trends and developments in the container shipping market as experienced and understood by shippers – the importers and exporting businesses that own the cargo carried on container ships. Shippers are the customers of the container shipping industry.

2. The Quarterly Review collates and reports outputs from MDS Transmodal’s established and respected Container Business Model and other tools that are relied upon by governments and international agencies around the world. Working with GSF, MDST has generated eight new indicators showing how the market is performing in terms that are relevant and applicable to shippers as users and customers of these services.

3. MDS Transmodal (MDST, www.mdst.co.uk) is a UK firm of transport economists which specialises in maritime and all other modes of freight transport. MDST works with senior management in the public and private sectors to provide strategic advice based on quantitative analysis, modelling and sectoral expertise.

4. Global Shippers Forum (www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.

European and international business organisations are urging the European Commission to start an immediate review of its competition regulations for container shipping.

Brussels, 22 July 2022 – Ten trade organisations, representing the owners and forwarders of cargo, port terminal operators and other parts of the supply chain dependent on container shipping, are demanding an immediate start to the review of European Union’s Consortia Block Exemption Regulation for the container shipping industry.

The Regulation exempts container shipping lines from many of the checks and balances of EU competition law and permits them to exchange commercially-sensitive information to manage the number and size of ships deployed and the frequency and timing of sailings on trade routes around the world.

European businesses and other parties in the supply chain have suffered huge disruption to the movement of goods by container shipping since the Regulation was last renewed in April 2020, with many sailings being cancelled or diverted to other ports, and ports being bypassed (‘skipped’) at short notice. At the same time shipping rates have more than quadrupled on many routes and continue to remain 3 to 4 times higher than in 2019 before the pandemic.

The effects of lockdowns on the production of goods and the shifts in demand due to the effects of the Covid pandemic were certainly significant. But the ability of the shipping industry to collectively manage these impacts, and at the same generate profits totalling over $186 billion in 2021, at the expense of the rest of the supply chain, and ultimately Europe’s consumers, demonstrate that something is wrong. The benefits of the exemptions from general competition law enjoyed by the shipping lines are not being shared fairly between the lines and the rest of the economy, and this in itself constitutes a compelling reason why the Block Exemption should be reviewed urgently.

In their letter to the Commission the signatories point to the revelations and recommendations of investigations conducted in the United States by the Federal Maritime Commission, resulting in May in the passing of a new Ocean Shipping Reform Act, addressing many of the grievances of users and services suppliers to the container shipping lines.

The Regulation’s review will allow all interested parties to submit evidence and arguments as to how the Commission should act to ensure the deep-sea container shipping market operates in a way that is fair and transparent to all parties in the maritime supply chain. This should include consideration of new measures and mechanisms and should allow sufficient time for these to be considered and implemented before the expiry of the current regulation in April 2024.

Current measures of competitiveness in the global liner shipping market are incomplete and therefore inaccurate and fail to take full account of the degree of co-operation between carriers which results in a more highly concentrated industry, to the serious detriment of shippers worldwide.

This conclusion is one of the findings presented in the Container Shipping Market Quarterly Review for Quarter 1 2022prepared by MDS Transmodal (MDST) in collaboration with Global Shippers Forum (GSF).  A modified measure is proposed, based on the alternative indicators suggested in a recent study produced by OECD/ITF and MDST* that better reflects the degree of cooperation by lines, not just through the three big alliances but also agreements under which lines in different Alliances operate shared services.

Competition authorities until now have relied on traditional but incomplete tools to assess the level of concentration across trades, most commonly the Herfindahl–Hirschman Index (HHI). However, this indicator does not take into consideration the full extent of co-operation between shipping lines permitted under block exemption and other anti-trust immunity provisions. When these ‘inter-Alliance’ consortia are included the concentration of the market, as measured by the modified HHI, is much higher.

As an example, the graph below compares the traditional HHI of the Trans-Atlantic trade over the period 2006-2021, compared to a Modified HHI (MHHI)¹, which includes the inter-Alliance agreements on that trade.  The Modified HHI exceeds the accepted threshold of 2,500 points at which an industry is considered ‘highly concentrated’, by most competition regulators.  

On this basis GSF believes the recent ‘Fact Finding Investigation 29 –  Final Report’² published by the US Federal Maritime Commission in May this year does not yet provide a complete picture, as the report maintains the liner trades serving the USA can be characterised as exhibiting ‘vigorous competition’ because their HHI has been measured at below 2,500 points.

GSF urges the FMC and all other competition authorities to utilise the more accurate MHHI measure in its assessments of the container shipping market, and in particular of the concentration in market share achieved through all agreements permitted under block exemption and anti-trust immunity provisions.

“This breakthrough analysis lays bare the degree of dominance that many shipping lines actually have in the key global trades,” comments GSF’s Director James Hookham.  “Current measures of market concentration are only seeing part of the picture. Not only are there consortia operations within the three main Alliances, the number of separate consortia that exist consisting of lines from different Alliances is also significant.” 

“Competition authorities should urgently revise their measures of competition to reflect the reality of the container shipping market and ensure they capture the full extent and effects of shipping line co-operation, as experienced by shippers”.

It is GSF’s contention that a lack of, or reduction in the levels of competition, leads directly to poor service quality for shippers.  This is borne out by other findings in the ‘Quarterly Review’. The number of port calls achieved (in comparison with those scheduled) fell to 68%, the lowest level recorded since this analysis began in 2020 and, though capacity lost through skipped ports in Europe declined in Q1 2022, it continued to rise in both Asia and Australia with shippers consequently suffering from further export delays.

Comments from Mike Garratt, Chairman of MDS Transmodal bear out this conclusion, “Several shipping consortia arrangements involve the constituent shipping lines controlling more than 30% of capacity in the Asia to Europe market, in excess of the principle established in the EU’s Consortium Block Exemption Regulation. Scheduled capacity between world regions has fallen and though our analysis indicates that service reliability has now stabilised the number of port calls skipped continues to grow.”

¹ Merk, O. & Teodoro, A. (2022), Alternative approaches to measuring concentration in liner shipping; Maritime Economics and Logistics 28 February 2022

https://link.springer.com/article/10.1057/s41278-022-00225-x

² https://www.fmc.gov/wp-content/uploads/2022/06/FactFinding29FinalReport.pdf

ENDS

Notes to Editors

1. Mike Garratt, Chairman of MDS Transmodal, is available for interview. Please contact +44 (0) 1244 348301

2. James Hookham, Director of GSF, is available for interview. Please contact: +44 (0) 7818 450440; secretariat@globalshippersforum.com

3. Media Contact:  The Container Shipping Market Quarterly Review for Quarter 1 2022 is available in PDF format on request from Maria Udy, Portcare International. maria@portcare.com +44 (0) 7979 868539.

4. The Container Shipping Market Quarterly Review is produced every three months and reports, interprets and comments on trends and developments in the container shipping market as experienced and understood by shippers – the importers and exporting businesses that own the cargo carried on container ships. Shippers are the customers of the container shipping industry.

5. The Quarterly Review collates and reports outputs from MDS Transmodal’s established and respected Container Business Model and other tools that are relied upon by governments and international agencies around the world. Working with GSF, MDST has generated eight new indicators showing how the market is performing in terms that are relevant and applicable to shippers as users and customers of these services.

6. MDS Transmodal (MDST, www.mdst.co.uk) is a UK firm of transport economists which specialises in maritime and all other modes of freight transport. MDST works with senior management in the public and private sectors to provide strategic advice based on quantitative analysis, modelling and sectoral expertise.

7. Global Shippers Forum (www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.

New Carbon Tax up for discussion at this week’s Marine Environment Protection Committee (MEPC) meeting at the IMO seems set to raise freight costs to shippers beyond their already record levels.

Such is the serious fear of the global business organisation representing cargo owners which export and import across international supply chains, the Global Shippers Forum.

Following the decade-long efforts of the International Maritime Organisation (IMO) to gain agreement on the so-called IMO 2023, a set of energy efficiency measures for existing ships, which final take effect next year, its MEPC will now discuss a further proposal put forward by the shipping industry to introduce a Carbon Tax on bunker fuel.  This is intended to incentivise a switch to lower carbon emitting fuel options and could eventually double the current price of tradition bunker fuels.

In the first instance GSF is urging regulators to make sure that the potential for shipping lines to remove older tonnage from the market, which they deem uneconomic to upgrade to progressively more demanding efficiency levels, is not used as a disguised means for capacity management resulting in higher freight rates.

Moreover, there is perhaps a more obvious danger to shippers. Given the widespread use of Bunker Adjustment Factors (BAF) and the rash of new surcharges ahead of the introduction of Low Sulphur Fuel in 2020, shippers will be wary of how much of this proposed Carbon Tax will just be passed through to them.

As the Director of GSF, James Hookham points out, “Shippers will be forgiven for thinking that the proposal, and its consideration at the IMO will inevitable result in still higher freight rates. That’s because the shipping industry has a very efficient mechanism for passing through higher fuel costs in the form of BAF; a surcharge to cover variations in fuel price. There are few reassurances in the existing proposals that a Carbon Tax won’t just be passed through as an added cost for shippers.”

Hookham goes on to demand, “If the shipping industry is serious about Market Based Mechanisms as a route to decarbonisation then it needs to insulate its customers from their inflationary effects otherwise emissions will be reduced by suppressing demand for world trade rather than by incentivising the  step-changes in fuels and propulsion technology, so urgently required.”

GSF is urging the IMO members on the Marine Environment Protection Committee to give due consideration to the interests of those who constitute the drivers of international trade, exporters and importers, and given the potential sums of money involved, insist on any Carbon Tax mechanism be fully transparent with exposure to scrutiny.

As Hookham concludes, “The MEPC needs to think through the realities of the shipping market and avoid simplified comparisons with experiences in other sectors of their economies”

Global Shippers Forum (GSF)

(www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.

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.

“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.

“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.

Notes to Editors

1. Mike Garratt, Chairman of MDS Transmodal, is available for interview. Please contact +44 (0) 1244 348301; mike.garratt@mdst.co.uk

2. Antonella Teodoro, Senior Consultant, MDS Transmodal is also available for interview.  Please contact +44 (0)1244 348301; antonella.teodoro@mdst.co.uk

3. James Hookham, Secretary General of GSF, is available for interview. Please contact: +44 (0) 7818 450440; secretariat@globalshippersforum.com

4. Media Contact: Maria Udy, Portcare International. maria@portcare.com +44 (0) 7979 868539.

5. MDS Transmodal (MDST, www.mdst.co.uk) is a UK firm of transport economists which specialises in maritime and all other modes of freight transport. MDST works with senior management in the public and private sectors to provide strategic advice based on quantitative analysis, modelling and sectoral expertise.

6. Global Shippers Forum (www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.

Shippers found alternative means of getting their goods to market as available container shipping services maxed out and service patterns changed to serve congested routes.

Global trade continued to grow in Quarter 3 2021 but with deployed container shipping capacity fully utilized, that additional growth was being moved by a mix of air freight, rail services between China and Europe, and own-charter vessels or services provided by non-liner carriers.

Commenting on the findings of the latest Container Shipping Market Quarterly Review, published by the Global Shippers Forum and MDS Transmodal, James Hookham, GSF Director said:

“The Container Shipping Market Review shows the extent to which shippers sought out alternatives, as shipping lines priced themselves out of reach and narrowed the cost difference with offerings from other modes. A measurable share is also accounted for by vessels chartered by shippers for their own goods, or by other non-liner shipping carriers.”

Looking to the future, James Hookham continued:

“The Great Shipping Crisis of 2021 has taken many casualties as shippers trapped between record rates and very poor service levels struggled to fulfil delivery deadlines for imports destined for the holiday sales season. Shippers will be watching anxiously to see how quickly these conditions abate in 2022, and whether the use of these alternative services will continue to grow”.

“Shipping lines are attributing the cause of the Crisis to severe congestion in ports and logistics bottlenecks inland. But this means that, as these conditions ease post-peak season and output dips in Chinese New Year, container shipping capacity levels should increase to match shippers’ demand more closely. This recovery in capacity could accelerate if consumers switch spending to services rather than goods, and interest rate hikes and higher energy costs take their toll on discretionary spending”.

New analysis in the Review reveals the extent to which shipping lines have adjusted global service patterns with many more ‘shuttle services’ being introduced at the expense of services making multiple port calls in different regions. This reduces the number of countries with direct connections to their export markets and requires more frequent transfer of loads between services at hub ports, such as Singapore and Colombo.

Mike Garratt, Chairman of MDS Transmodal, said:

“Our review this quarter has examined how alliance members have expanded their role in developing consortia and therefore market shares and the way in which they have addressed operational challenges in modifying route structures. This reduction in services linking multiple world regions has been accompanied by a decline in the number of countries that are directly connected.

“Given the dramatic growth in freight rates and declining service performance it is not surprising to see trade growing more quickly than container volumes on the established lines, as shippers have found other transport solutions; starting own shipping routes, using long-haul rail or air or semi-bulk traffics switching to conventional methods.”

Notes to Editors

1. Mike Garratt, Chairman of MDS Transmodal, is available for interview. Please contact +44 (0) 1244 348301

2. James Hookham, Secretary General of GSF, is available for interview. Please contact: +44 (0) 7818 450440; secretariat@globalshippersforum.com

3. Media Contact:  The Container Shipping Market Quarterly Review for Quarter 3 2021 is available in PDF format on request from Maria Udy, Portcare International. maria@portcare.com +44 (0) 7979 868539.

4. The Container Shipping Market Quarterly Review is produced every three months and reports, interprets and comments on trends and developments in the container shipping market as experienced and understood by shippers – the importers and exporting businesses that own the cargo carried on container ships. Shippers are the customers of the container shipping industry.

5. The Review collates and reports outputs from MDS Transmodal’s established and respected Container Business Model and other tools that are relied upon by governments and international agencies around the world. Working with GSF, MDST has generated eight new indicators showing how the market is performing in terns that are relevant and applicable to shippers as users and customers of these services. A copy of the Shippers Dashboard summarising these findings follows these notes.

6. MDS Transmodal (MDST, www.mdst.co.uk) is a UK firm of transport economists which specialises in maritime and all other modes of freight transport. MDST works with senior management in the public and private sectors to provide strategic advice based on quantitative analysis, modelling and sectoral expertise.

7. Global Shippers Forum (www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.

Shippers across the globe might have to battle the effects of supply chain congestion and record high ocean freight ratees for some time to come. The question remains – when will they get relief?

The wave of congestion that is sweeping through global supply chains delaying deliveries of seasonal goods and essential commodities, stranding many shippers between meeting impossible delivery deadlines while paying record shipping rates is not set to subside anytime soon

“This is proving to be the ‘Peak Season like no other’, just as we predicted” says the Global Shippers Forum, the voice of cargo owners in international trade.

Speaking at a High-Level Maritime Dialogue, hosted by FIATA last week, James Hookham, GSF’s Director, highlighted the challenges that importers and exporters face in getting their goods on shelves and in warehouses for the winter holiday season.  They are struggling with historically poor levels of service from shipping lines, ports and terminals, and inland logistics providers, yet paying the highest shipping rates and surcharges seen for decades.

James Hookham said:

“Global shippers are riding a tidal wave of congestion this Peak Season that started in exporting countries and is now arriving on the shores of importers and sweeping inland. First, we had lockdowns in Chinese ports, then an inexplicable shortage of empty containers, then the ships suddenly all maxed out and slots were like gold dust (and costing as much). Now our goods are queuing to get into ports, waiting for a crane to unload the box and then for a driver to move it inland to where we need it. It’s been a tough ride and it’s not yet over, but most of us are still standing, although, sadly, there will be ‘wipe-outs’”.

The most vulnerable businesses are the importers and distributors fighting to meet delivery deadlines, set by their retailer customers.  They simply cannot predict when the goods they have paid so much to have transported actually will be available. Not only have they blown their logistics budgets this year, but they are facing stiff penalty charges for late delivery, and possible loss of future contracts. These are the businesses that are the victims of the maritime industry’s collective struggle to manage the ‘Great Shipping Crisis of 2021’.

But with most deliveries expected to land in the next few weeks, and Thanksgiving and Christmas probably safe for this year, big questions remain — Will this congestion continue well into next year. Will tight market conditions persist through 2022?

Or will consumer demand slacken and will capacity and resilience improve service levels prices become more predictable?”

“To continue the surfing analogy, was 2021 a freak wave or a permanent rise in sea level?”

“Just about every shipping line is predicting the latter,” continued James Hookham. “And why wouldn’t they when they are collectively expecting to turn profits exceeding $150 billion this year? But there is good reason to query the hype of continued congestion.”

“The expectations for consumer inflation levels in most developed countries are hardening and most central banks are expected to increase interest rates next year. That won’t affect retail prices immediately, but it could trigger a rapid change in consumer sentiment that means the ‘click-fest’ of on-line shopping that has reportedly fuelled the surge in shipping demand for the past 18 months could be extinguished as quickly as it ignited”.

“Sure, maritime congestion will take some time to unwind, but if the ‘Great Shipping Crisis of 2021’ proves to be just that, then the speed at which shipping rates shadow the drop in demand will be a critical indicator of the responsiveness and competitiveness of this market”.

James Hookham concluded by reflecting on the fact that amongst its global membership, GSF now includes operators of container ships!

“There is, of course, that small heroic band of shippers out there who made the trip to the Dark Side during 2021 and hired their own vessels to move their own goods, because shipping line predictability had got so bad, and rates so out of kilter with actual operating costs. I don’t know what their charter terms are, or what their experiences have been, but I expect they will soon be needing to decide whether to ‘give up the hobby’ or make it a part of their routine operations. These endeavours have been dismissed as an aberration by most shipping industry observers, but it tells you something when a few guys in the audience think they can whistle a better tune than the full orchestra!

Notes to Editors

Global Shippers Forum (www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.