Shanghai’s Yangshan Port suffers massive delays

In addition to bad weather conditions, rampant overbooking by carriers in the wake of newly restructured vessel sharing alliances is at the root of the delays, according to Nicolas Vittori, overseas network manager at France-based Setcargo.    Bad weather and shrinking capacity following a recent realignment of shipping alliances have created a perfect storm of port congestion that has caused a virtual gridlock in traffic at the port of Yangshan in China.
   Very foggy conditions, which can last for several days along the affected region in China, is the most immediate cause of the delays, as ships are unable to reach port and are being rerouted.
   “We can confirm that some of our vessels have been impacted by the congestion at the Yangshan Port due to seasonal bad weather,” a spokesperson at Maersk told American Shipper. “We are closely working with Chinese ports to address any operational challenges, and we have been able to maintain a very constructive dialogue with our terminal partners.”
   The Maersk spokesperson added that four of Maersk’s ships were affected, all of which have been rerouted.
   Many ships from other carriers remain at sea, however, waiting for conditions to improve before attempting to enter the port, according to the spokesperson.
   In addition to the more immediate impacts of the fog, rampant overbooking by carriers in the wake of newly restructured vessel sharing alliances is at the root of the massive delays at the port, Nicolas Vittori, the overseas network manager for France-based Setcargo, told American Shipper.
   “Carriers are overbooking vessels and continue to accept reservations,” Vittori said. “Meanwhile, containers Chinese exporters deliver are left stranded at the port without being loaded onto ships.”
   Shippers and logistics providers said the information about when the port’s congestion problems will be resolved remains murky at best. And poor communication by the port authorities are exasperating the problem, Vittori said.
   “The port operators aren’t saying anything because they don’t know what needs to be done yet,” he said.
   The congestion is also reflective of a recent shortage in container capacity in the eastbound Europe-Asia trade, which prompted the European Shippers’ Council (ESC) to issue a warning in March of more potential trouble ahead.
    Starting April 1, the number of large-scale carrier alliances was reduced from four to three – “THE” Alliance, the OCEAN Alliance and the 2M Alliance – and members of the east-west VSAs are still in the process of rationalizing their service networks in an effort to better bring them in line with demand.
   “The disorder has a significantly more serious impact than the one caused by the installation of the previous alliances two years ago,” the ESC said in a statement. “It also comes only eight months after the very severe consequences of Hanjin bankruptcy.”
   Europe-to-Asia shippers are faced with being unable to meet their contractual obligations or to offer boarding slots before May, the council said. Container booking prices have spiked as much as 45 percent in the trade, and 2M alliance members have stopped accepting orders due to the capacity shortfall.
   “This translates into missed sales, stock failure and significant extra costs as some exporters are trying to circumvent these obstacles by using other modes,” the ESC said.