In the middle of 2021, we were stroke by a crucial issue related to the scarcity of containers due to the imbalance in the quality of international and domestic trade as well as port congestion (the impact of the decrease in the number of human resources & equipment) from the Covid-19 pandemic lockdown. The scarcity of containers has resulted in an increase in ocean freight rates in the world.
The lockdown regulation during the Covid-19 pandemic has hampered loading/unloading activities and disrupted logistics distribution (port congestion). Many ships are blank sailing, reducing their sailing schedule. As a result, the ship's loading capacity is reduced.
In the 4th Quarter of 2020, China began to increase export production to Europe and America again and this resulted in excess demand for containers for export packaging. China is doing a massive repositioning and is willing to pay a high price so that containers outside of China can be pulled back to China. MLO (Main Line Operator) chooses to place ships and reposition containers to several hub ports in China (Shanghai, Shenzen, Nongbo-Zhoushan, and Guangzhou) which causes container scarcity and high ocean freight.
International and domestic trade imbalances, especially the flow of containerized goods transported by sea for export and import orientation are trapped in the main ports of Europe and America. This has escalated with the poor economic relationship between the United States and China, which has resulted in operational disparities in the quality of long-haul shipping services, namely the Asia-USA and Asia-Europe routes. This problem then affects various short-haul routes, especially intra-Asia, including to and from various key locations in Indonesia.
Global shipping conditions Average world container throughput growth reached 3% with a throughput decline of -3% in 2020. With the World Container Index increasing 3.3% from $207 to $6,463.78 per 40ft container. The highest increase in the price of 380 HSFO type fuel was on May 20th 2020 with an increase of 4% and an average price increase of 2.1%, while the highest VLSFO type was on May 18th 2020 with an increase of 7% and an average price increase of 2, 4%, and the highest MGO LS type was on May 20th 2020 with a 6% increase and an average price increase of 2.1%.
Maersk Lines has the largest container service capacity with a total capacity of 4,157,653 TEUs. MSC has the highest capacity growth with additional capacity reaching 177,691 TEUs. PIL has the lowest decrease in capacity with a decrease in capacity of -39,039 TEUs. The decrease in the capacity of the world's container ships, has an impact on the presence of unserved ports and an increase in container Dwelling Time.
The decline in LSCI (Liner Shipping Connectivity Index) occurred in almost all ASEAN countries in the first Quarter of 2021. Indonesia's LSCI decreased by -2% during first quarter of 2019 to first quarter of 2021.
The scarcity indicator can be seen with the container availability index (CAI) which on average is below 0,5 and has even reached 0,15 at the ports of Tanjung Priok, Tanjung Perak, Tanjung Emas, Lampung, Belawan, and Makassar.
The increase in freight (both for sizes 20 Ft DC/Dry Container, 40 Ft DC/Dry Container, 40 Ft DV/Dry Van and 40 Ft HC/High Cube) from 100 - 1000% occurred for both long-haul and short routes, especially to China, USA and America, both for export purposes and for import orientation of Indonesia's main commodities.
This condition has become more sensitive due to the weak bargaining power of national container shipping companies and fleets on international container transportation (including the lack of coordination between the maritime logistics ecosystem, supervision and control over intervening MLO actors).
