Hartnett, who’s been pessimistic on stocks, said there are risks to the consensus view of both a shallow recession, and that shallow inflation will kill inflation, allowing a pivot by the Fed to refocus on growth. Related: Here’s the sector most at risk of Russia permanently shutting off gas to Germany That pipeline is shut until July 21 for scheduled maintenance. Hartnett says it doesn’t make sense for Russia to close the Nord Stream 1 gas pipeline indefinitely. So they're feeling a little reticent about all of that,” she said.Ĭontainer xChange’s Demurrage & Detention: Annual Benchmark 2022 is available to download from the company website.Wheat prices have dropped 44%, Brent oil has dropped 24% and European gas has dropped 21% from their peak. I think if you speak to a lot of shippers right now, they've got a lot in their warehouse that they need to move and demand is falling. McRoberts agreed that peak season was not going to be usual this year, “because of the massive inventory levels that have been building up. it's not the case that you just resolve the blockage and then everything flows." If there's an accident and a traffic jam forms, even if the accident is cleared up it still takes a very, very long time for traffic to actually flow again. Moderator Christian Roeloffs, Co-founder and CEO, Container xChange, added: "We've always compared it to a traffic jam. The market is really snarled up, and it's gonna take a lot of effort to fix it,” said Griffiths. ![]() “I firmly believe if nobody wants to ship anything on a container in the next six months, we still wouldn't fix the issues that we've got in the market at this point. “I would just say - what peak season? We always say that rates go up quite a lot in this time of year but they're just not at the moment,” he said.Įven with a slight easing in demand and vessels on voided sailings being used to clear up issues, the task of unravelling the disruption is massive. On the freight rate side, both Griffiths and McRoberts forecast spot rates continuing to fall, but not to anything like pre-pandemic levels.Īsked how he expects the peak season to play out this year, Griffiths' answer was straight forward. The scenario is very location specific, she said. While forecasting a softening in total detention and demurrage costs, McRoberts warned that if US port congestion continues and spills into secondary ports, costs will rise. We're seeing that still continuing at the large US ports,” said McRoberts. Nothing is moving into the amber and if it is, it's at the upper end of the amber still about to tip into the red side. We're tracking this to AIS data at Drewry and everything is still in the red. “These are heavily congested ports and terminals, and they have been for a very long time. Looking ahead, the panel did not have much good news for shippers hoping for respite in the medium term. Everybody is focusing on these cost items and unfortunately, if you're a shipper right now, your CFO is looking at all the bills and invoices coming in and asking ‘why am I paying for this?’” “I spend most of my time these days providing therapy to shippers, whether it be freight rates or detention and demurrage. If there’s a shortage of drivers, a shortage of physical people and vehicles to get the containers into the ports and out of the ports, it consequently increases the DND charges,” said McRoberts. “It's disruption, disruption, disruption, driving an increase in detention and demurrage charges. So even today, the spike is still pretty pretty much there,” said Buckle.Ĭhantal McRoberts, Head of Advisory, Drewry Supply Chain Advisors explained the root of rising detention and demurrage charges. ![]() ![]() For some outlier ports, like Long Beach and Los Angeles and Shanghai, they actually increased so that that ended up with the value in 2022 still being higher than pre-pandemic value by 12%. If we look at what the state is today in 2022, you'll see that in a lot of areas the trend in 2022 is decreasing slightly. “In fact, the global average increase was 39% for standard containers alone… the charges for 20 distribution centres alone doubled in 2021. “2021 saw a major major spike in these charges,” said Candice Buckle, Content Marketing Manager, Container xChange, sharing data from the company’s annual Demurrage and Detention benchmark report. Related: Congestion shifts to US East Coast ports
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