Afterwards came a brief period of stabilisation with no material changes in the SCFI level. Until Yantian shut down. The SCFI promptly continued to set new records every single week, and at the beginning of August, the index was up by 37% compared with the small plateau just before the Yantian incident. However, there was at least some element of light at the end of the tunnel as week-on-week increases had slowed down until the weekly increase was 'only' 0.7% at the first week of August. Subsequently, the Meishan terminal in Ningbo shut down. This caused another increase in the index by almost 3% over just two weeks. Even though 3% might not sound as very much, in absolute terms this increase means that the change over these two weeks alone was four times larger than normal price fluctuations seen in the more stable pre-pandemic period in 2017-2019. Now the Ningbo Terminal is beginning to re-open, and there must surely be light at the end of the tunnel. Are more trains coming? Unfortunately, the answer to this question appears to be 'yes'. Whilst not a part of Sea Freight., the closure of air freight operations in Shanghai will not only result in a major disruption for air freight shippers; it also creates a serious challenge to those ocean shippers who saw airfreight as a 'safety valve' to mitigate the disruptions on the ocean side. Perhaps even more important is the underlying circumstances related to the recent disruptions in China. In Yantian, only a few handfuls of workers tested positive for COVID-19. Shanghai Airport had two workers testing positive, and at the Ningbo container terminal it only took a single positive case of COVID-19 to have operations closed down for almost two weeks. It would therefore seem probable that more closures might happen. However, this is not the only incoming 'train'. On the US West Coast, the import situation in Los Angeles has rapidly deteriorated as well. At the beginning of 2021, there was a severe problem with up to 25 vessels waiting to berth. During May and until early July the situation gradually improved, and the queue was reduced to around 10 vessels. But container carriers had increased capacity on the transpacific route sharply in response to the strong demand for cargo transportation, and when the newly deployed vessels began to arrive on the US West Coast, the congestion worsened. By 20 August 2021, the queue outside Los Angeles reached a high of 40 vessels. Not only is this a short-term problem for US importers, it will also create a ripple effect in September and October when the vessels do not return to Asia according to schedule, resulting in blank or delayed sailings. Furthermore, it will delay the movement of empty containers back to Asia as well, impacting an already critical equipment situation. Hence, the short-term, very unfortunate outlook is that we seem not to have the end of the tunnel in sight yet.
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