iContainers stated that there are two extra factors in 2019, that could cause “further disrupt” and throw a wrench in the day-to-day management of the shipping peak season. Namely, the ocean freight industry has recently been operating under a cloud of uncertainty due to Brexit and the unpredictable US-China trade war.
As iContainers note, this year’s peak season is expected to be hit by two more contributing factors that could affect global throughput growth.
The fluctuating situation surrounding Brexit and the US-China trade war still lingers and will continue to cause incertitudes and affect volumes. But we also have IMO 2020 and an earlier than usual 2020 Chinese New Year to consider. We can expect these to further disrupt and unsettle supply chains
according to Klaus Lysdal, vice president of operations at iContainers.
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Specifically, last month, Drewry lowered its 2019 container growth estimates from 3.9% to 3%. The move was made because of concerns for a slowing economy, that were cause by “escalating geo-political tension” in many parts of the world and the “challenging new emission regulations” that the industry faces.
What is more, iContainers warned that the full impact of the disruption will be felt mostly towards the end of the year, when carriers start taking ships out of rotation, preparing for IMO 2020.
Crunch time will really begin around the end of the third quarter and the start of the fourth as carriers start fitting their vessels with scrubbers to abide by the new emissions regulations. This will come at a time when companies scramble to get their cargo in before the holiday season
Mr. Lysdal added.
The early Chinese New Year would also lead to an additional rush before both vessels and Chinese suppliers become fully booked. So this could result in more problems than usual in the day-to-day process of the industry managing the peak season.
However, there is a silver lining for supply chains this peak season. Because of decreasing demand and an increase in truck orders, the US trucking shortage situation appears to be on the mend and capacity is not expected to be as tight as previous years.
We still have some issues here and there and there are still areas where availability is generally at least a week out. But it’s much more manageable now and people are also more used to it by now, which means expectations of booking today and getting a pick-up tomorrow are also lower
Mr. Lysdal concluded.