Inside Logistics

FIATA urges attention to container imbalance

Congested terminals, temporary storage, abandoned cargo are major problems facing the global supply chain


May 11, 2020
by

ZURICH – FIATA is urging shipping lines to review their practices in order to even out the flow of containers across global shipping lanes.

Since the outbreak of the COVID-19 pandemic, the issue of container imbalances “is reaching a tipping point, with port and terminal congestion, abandoned cargo, and container shortages. This has serious impacts on the fluidity of global maritime supply chains, at a time when the timely flow of essential goods is ever more crucial,” FIATA says in a recently published position paper.

The paper, “Container imbalances and COVID-19: Freight forwarders’ role in finding solutions to the problems of today”, outlines how the timing of the Covid-19 pandemic coincided with the 2020 Chinese New Year, which exacerbated a “general increase in blank sailings and an oversupply of capacity…This had severe implications on destination backhaul (export) space and equipment, due to the significant shortage of sailings and containers shipped.”

Just as China restarted its economy and began to send export containers, the rest of the world economy went into shutdown mode, causing backlogs of import containers at ports in Europe and the Americas.

“Congested terminals, temporary storage, abandoned cargo – these constitute just some of the major problems facing the global supply chain today. The impacts of such container imbalances will continue to be felt, even as economies strengthen and reinvigorate the supply chain,” the report says.

“As backhaul (export) demand increases, for example, the current high levels of blank sailings may mean there is not sufficient vessel space or container equipment for backhaul (export) containers, and as such imbalances in containers and available vessels will continue to be present.”

As the representative body for the freight forwarding industry, FIATA is urging its members and shipping lines to work together to address the situation. FIATA and its National Association Members are engaging with stakeholders and government officials to find solutions in dealing with governmental restrictions associated with Covid-19.

Among the suggestions is facilitating warehouse storage of goods to reduce demurrage and detention charges and to free up containers. Although there is extra handling involved, it will ultimately be a less costly option than leaving goods in import containers.

Forwarders also have the ability to help consignees who may be contemplating abandoning cargo find alternatives, the paper suggests. Likewise, it suggests forwarders can speed up the arrival process for reefer containers by coordinating the interface between vessel, terminal and pick up/delivery, including: preparing customs and other government documentation well in advance of arrival; committing to take delivery of the container directly from the container crane, or at a minimum dwelling time in the terminal, to prevent congestion; and picking up from the terminal within a very short period of time.

“The maintenance of a fluid global maritime supply chain” is essential, “to not only support the movement of essential goods, but to also support the recovery of the global economy,” the report concludes.