As reported in Supply Management recently, the collapse of the Hanjin Shipping Company has raised questions in the industry.
Increasing capacity at a time when demand in the EU and US for goods produced in the Asia has been reducing is putting pressure in prices. Where might this lead?
We spoke to John Shaw – ERA’s sea freight analyst in the Logistics team to get an objective view.
“Aspects are still emerging. In an interconnected business such as that which exists between the shipping lines, events such as this are it is likely to throw up a lot of unexpected consequences. With 23,000 TEU per week capacity from Asia to Europe having been effectively removed, it’s likely that lines will look for early and/or immediate price increases. The further GRI’s announced for 15th September now look certain to be implemented.
We are also seeing the effects and fears raised of course by the volume of containers currently in transit. To put this in context, some estimates suggest that approximately $14bn (US) of cargo is currently stranded in the supply chain in Hanjin containers. The next few weeks will need to pass before we will be able to see the full practical impacts and the effect on rates going forward.”
Expense Reduction Analysts experts always look to the long term in order to deliver sustainable benefit for our clients. Being aware of market changes, and the effects of those changes is critical to our process.
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