Unprecedented Market Conditions

Current market conditions have been propelled by several compounding factors.

Initially the impacts of COVID-19 were seen on disruptions to manufacturing and exporting out of China specifically. But these initial interruptions have been exacerbated by consumption economies and growing import volumes.

Currently, new order growth is exceeding the capacity of containers for transport available, seeing a backlog of manufacturing jobs rising at a record pace.

As a result, the average supplier delivery time has lengthened globally to the greatest degree in 23 years.

And the ongoing imbalance of supply and demand since the pandemic has been made worse by an unprecedented number of companies building safety stocks to protect their customer offering.

These conditions are currently being paired with increased health and safety concerns associated with the COVID-19 Delta variant.

This has further restricted capacity and efficiency.

Port closures or restrictions have caused major delays and congestion, with the Asia – Oceania shipping line reliability sitting as low as 4% at some times, and averaging only 20%. This means not only is it hard to access freight containers, but even when space is secured – shipments are late, delayed or even cancelled.

This limited vessel availability paired with unprecedented demand for space has seen container spot rate price increases in excess of 500% higher than the previous year.