The major challenges facing the container industry with unprecedented high freight rates, delays and bottlenecks are primarily driven by the extreme demand for imported goods from the US and the nation’s consumers.
This is the candid response from the container carrier lobby group World Shipping Council (WSC) in the wake of US President Joe Biden signing an executive order last Friday which, among other elements, calls on the Federal Maritime Commission (FMC) to increase its focus on the competition situation and rates in the container industry.
“This is not the fault of any given supply chain actor. Supply chains simply cannot efficiently handle this extreme demand surge,” says President & CEO of World Shipping Council John Butler.
He points to the sky-high demand that followed the Covid-19 pandemic, with Western nations in particularly seeing a surge in demand for consumer goods transported in containers from Asia to for instance the US.
“All supply chain players are working to clear the system, but the fact is that as long as the massive import demand from US businesses and consumers continues, the challenges will remain,” adds Butler.
Chief executives of major container lines such as Maersk, Hapag-Lloyd and ONE have previously leveled criticism at the port infrastructure and work patterns in the US, with the result that ports are unable to import goods as rapidly as Asian ports can ship them off.
In a comment issued after the announcement of the executive order but prior to Biden’s address Friday, Hapag-Lloyd reiterates that the extreme situation is caused by infrastructure problems in the US.
“All carriers are doing their utmost to cope with this and all carriers fulfill the needs of their customers. If regulations are intended, they should target to get the infrastructure issues eased,” a Hapag-Lloyd spokesperson told ShippingWatch.
ShippingWatch also reached out to Japanese carrier ONE and South Korea’s HMM, and they both refer to the announcement from World Shipping Council.