Far East-Middle East trade badly hit by lack of capacity: DHL

None of the dedicated Central China-Middle East services operated by the big carriers currently offers weekly sailings, according to the October 2021 edition of the report. The shortage of capacity in the Far East-Middle East trade route in not only a result of port congestion; but also, because many ships have been redeployed to the main East-West routes (i.e. from Asia-Pacific to US/Europe), where cargo demand is very strong and spot freight rates are at historical highs.

On September 14, only 29 ships were deployed on Central China-Middle East services, while 50 would be required according to pro forma schedules. As a result, “almost half of all sailings on this route have to be blanked, as the services not only lack some 40 per cent of the pro forma capacity but also require additional ships as vessels can no longer complete a round trip in seven weeks due to port congestion and long waiting times at anchorage,” the DHL Global Forwarding report said.

Port congestions around the globe are forcing ocean freight carriers to adjust service rotations or omit ports, depressing schedule reliability to an all-time low. As carriers shift capacity to the big East-West trades, dedicated Far East-Middle East services have been worst hit, says the latest Ocean Freight Market Update, released by DHL Global Forwarding.

Interpreting the situation for supply chains globally, Niki Frank, CEO South Asia and CEO India at DHL Global Forwarding, shared on his LinkedIn page, “Different times call for different measures. Whoever still believes that price is the key aspect in managing your supply chain these days has unfortunately not understood the new reality. The report highlights what has become much more important: resilience, innovation and focus on strategic relationships that are helping companies navigate challenging conditions that continue to disrupt supply chains globally.”

The share of the global cellular fleet deployed in the Asia-Europe and Asia-North America trade routes increased from 34.6 per cent on July 1, 2020 to 41.4 per cent on July 1, 2021. Transpacific capacity has risen 30.6 per cent year-on-year.

In the US, drastic increase in dwell times due to chassis and equipment shortages still remains a big challenge. However, globally, the demand for ocean freight carriers is expected to remain high, with rates continuing to spike across all regions.

DHL Global Forwarding, Deutsche Post DHL Group’s leading international provider of freight services, offers logistics solutions to help companies around the globe improve the efficiency and cost-effectiveness of their supply chains. The division features services like Air Freight, Ocean Freight, Customs, Same Day, Road Freight, Rail Freight and much more.

Fibre2Fashion News Desk (RKS)