than a handful of positive cases will shut down regions regardless of the impact this might have on, for example, container ports as evidenced in both Yantian and Ningbo. At the other end of the spectrum is Denmark where for the past month there have been no restrictions at all irrespective of what the case numbers are. Predicting when the more restrictive countries will change the policies is also not feasible. Part of the problem stems from the large boom in consumer demand in the USA, which is removing capacity from other trades and hence putting pressure on all trade lanes globally. This boom is partially driven by consumers who drastically changed their behaviour due to Covid and shifted funds away from services and over into goods instead. At some point in time they might very well change their behaviour back, which could lead to a sudden drop in cargo demand. But predicting the change in behaviour is also next to impossible. Finally, there is the issue of unravelling all the operational bottlenecks across vessels, ports, depots, trucks, rail, etc. The industry has never faced such a daunting clean-up task. The closest comparison is the bottleneck on the US West Coast in 2015 driven by a labour dispute. The bottleneck was as bad as the one we are seeing now and back then it took 6 months before vessels were fully back to normal operation. And that was a situation where the problem was solely on the US West Coast. Now it is global and also stretched to inland movements. All in all, a realistic expectation would likely be that a timeframe of 6-12 months is not unreasonable. What does “normal” mean? But a reversal to normal has a number of different dimensions and these might likely not all happen at the same time. It will take a long time before all vessel schedules are operating normally, but in the transition period there will constantly be gradual improvements. This in turn means that we will reach a tipping point where the bottlenecks have been reduced sufficiently to release more capacity into the market. This will lead to the current capacity shortage being alleviated sooner than full operational normality comes into play. In turn, this means freight rates will begin to decline before all problems are solved. Another dimension is the inland movement related to trucks and rail. The timeline for getting back to normal is likely to be different than for the vessels with some places likely to improve quickly while others might see problems persist even after vessels begin to approach normality.
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