Asia-Pacific Container Logistics Update March 2022: Port congestions, disruptions and demand patterns

The world of logistics has always been a fast-changing landscape. It’s why we encourage our customers to forecast their supply chains, and spot new market opportunities to stay ahead of the competition.

But even the best forecasters can be forgiven for struggling in the choppy waters of logistics today. At Twill, we know that for small-medium sized businesses, navigating these uncertain times can be daunting and we’re dedicated to helping you through. Here we’ve compiled our latest update – supercharged by Maersk – on the Asia-Pacific (APAC) market.

Logistics Market trends in Asia-Pacific
Let’s start with an overview of the market trends in the region. These are the big topics that could influence your logistics long-term. So it’s worth keeping an eye on them:

Cracks showing in Chinese economic outlook
In China, a sharp drop in Caixin’s (a major Chinese news outlet) manufacturing purchasing manager’s index (PMI) to 49.1 in January suggested the country’s manufacturing output has lost momentum. There’s a belief that these lower figures are due to a combination of China’s push toward a zero-COVID-19 policy, restrictions ahead of the Lunar New Year and the impact of the Beijing Winter Olympics.

However, it also reflects potential weaknesses in China’s economic structure. Domestic household spending is weak, and outbreaks of Covid-19 continue to threaten disruption to manufacturing supply chains.

Schedule reliability will take time to recover
According to Sea-Intelligence’s (which provides the most comprehensive studies of ocean liner schedule reliability) Sunday Spotlight report, schedule reliability could take until the end of 2022 to normalise.

The report notes that: “The system is so far out of balance that there is no historical precedent fully describing this situation”. But using the experience of major delays and bottlenecks caused by the 2015 U

S West Coast labour dispute, Sea-Intelligence suggests that if the current system manages the same speed of recovery, delays could take 8-9 months to resolve.

What is the outlook for ocean freight logistics?
Ocean freight is at the centre of our end-to-end logistics solution at Twill – and its importance to global supply chains is undeniable. Here we delve into the key developments and destination updates in the sector:

Demand returning after Lunar New Year – Overall demand out of Asia fell after the Lunar New Year due to the expected holidays and factory closures but is expected to recover quickly and remain strong in the first half of the year. Space will remain tight particularly on transpacific and European trade routes.

Equipment situation is improving – Equipment availability in APAC is improving due to the proactive action taken by carries, including Maersk, last year and is expected to stay healthy across Asia up until April. We still encourage you to explore 20ft containers for your cargo where possible, to keep the situation improving.

Asian ports operating well – Ports in APAC are operating well, with congestion reducing and waiting times improving. However, with the current situation in Ukraine and Russia, we are seeing significant delays in European hubs. This leads to challenges in Europe and US, with the average wait ranging between 7-14 days in Europe – and as high 40 days in the US.