Covid 19 Archives-Stranded containers hamper global trade

Stranded containers hamper global trade

Bloomberg First Word March 18, 2020
This article was written by Pimm Fox. It appeared first on the Bloomberg Terminal.
It’s going to take a much bigger boat and much more time to repair the global supply chain. As trade seizes up around the world, ships and containers are in the wrong places. The availability of cargo containers at Hamburg, Rotterdam and Antwerp in Europe and Long Beach and Los Angeles in the U.S. are at the lowest levels recorded. In addition, the destruction of consumer demand in Europe and North and South America means the backlog could continue.
Normally these ships bring loaded containers from Asia to U.S. and European ports. The boxes are then filled with U.S. and European exports or sent back to Asia as empties to be refilled. But the combination of the U.S.-China trade war and the outbreak of the coronavirus pandemic sent exports from China tumbling, cutting the volume of containers. U.S. imports from China fell more than 26% in January and February –- the biggest decline in more than a decade.
Now, producers in countries hit with the coronavirus have limited ways to get products to overseas customers, prompting factory closures. And even if empty containers are available, their prices have soared. The cost to ship a 40-foot equivalent unit (FEU) from Europe to China is up 55% since Feb. 18, while rates from the Mediterranean to China have jumped 70%.
One possible solution is moving the world’s two largest container vessels from their Asia-Europe routes to a transpacific itinerary. Oslo-based MSC Container Ships is sending the 23,756 TEU MSC Mia to evacuate empty containers from China to the U.S. And by the end of March MSC Nela, a 23,656 TEU vessel, will also shift from its Asia-North Europe route to perform a similar function.
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