3 April 2020
The revival of Chinese production capacity and the introduction of quarantine measures in several countries around the world brings along serious implications for cargo storage and distribution in ports. Containers that piled up during the lockdown in China are now on their way to destinations in Europe and the US but cannot be delivered to companies which are closed or on reduced activity. Congestion problems also arise in Asian ports, including in India, the Philippines, Malaysia and Vietnam. Not being able to perform their contractual obligations, several Indian ports recently had to declare ‘Force Majeure’. Container carrier MSC responded to the growing problem by offering a ‘suspension of transit’ service to customers exporting from China. This would allow shippers to store containers at transhipment hubs in Germany, South Korea, Saudi Arabia, Lome, Panama and Turkey. In the United States, the Federal Maritime Commission (FMC) appointed commissioner Rebecca Dye to engage with stakeholders in investigating how to ease the most pressing challenges, especially for small and medium-sized shippers that are especially affected by a lack of cargo storage space. One of the measures at hand is the minimisation and reasonable use of detention and demurrage charges. Interest groups representing shippers and freight forwarders such as FIATA and CLECAT have raised concerns about these charges. European freight forwarders association CLECAT notably warned that unreasonable amounts of demurrage and detention should not constitute a revenue model for shipping lines and should not be used to discourage merchant haulage to the benefit of carrier haulage. These storage problems may of course be only short to medium term nature. According to IMF specialists, the world is entering a recession which is as bad or worse than in 2009.