iContainers: Two factors to further disrupt 2019 peak season

Two extra factors this year that are set to “further disrupt” and throw a wrench in the day-to-day management of the shipping peak season, according to digital freight forwarder iContainers.

Besides the recent cloud of uncertainty from Brexit and the unpredictable US-China trade war, the ocean freight industry is expected to be hit by the upcoming IMO 2020 sulphur cap and an earlier than usual 2020 Chinese New Year that would “further disrupt and unsettle supply chains.”

According to iContainers, the full impact of the disruption would be felt towards the end of the year as carriers begin taking vessels out of rotation in preparation for IMO 2020.

“Crunch time will really begin around the end of the third quarter and the start of the fourth as carriers start fitting their vessels with scrubbers to abide by the new emissions regulations. This will come at a time when companies scramble to get their cargo in before the holiday season,” Klaus Lysdal, vice president of operations at iContainers, said.

“If that’s not problematic enough, the early Chinese New Year will also prompt an additional rush before both vessels and Chinese suppliers become fully booked. So expect this to cause more problems than usual in the day-to-day process of the industry managing the peak season.”

Just last month, shipping consultancy group Drewry lowered its 2019 container growth estimates from 3.9% to 3% amid concerns of a slowing economy, brought on by “escalating geo-political tension” and the “challenging new emission regulations”.

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