Maersk Asia Pacific market update (January 2022)

This month, we share the latest trend before highlighting current challenges, and we also explain Maersk’s latest solutions to help you keep cargo moving.

Market Trend

Global manufacturing showed signs of firming in December according to global Purchasing Manager’s Index (PMI) figures released in January indicating that manufacturing sentiment remained upbeat in the fourth quarter despite a raft of challenges including delivery delays and the continuing threat from COVID-19. China’s manufacturing PMI nudged higher in December for the second straight month to hit 50.3 showing the economy was in expansion mode ahead of the Chinese New Year holiday in February, a GDP increase for China during the fourth quarter of 2021, 4% up from the previous year, whilst manufacturing in China also grew in tandem, up 4.3% the previous year.

This optimism is shown in forecasts for containerized cargo volumes this year which are projected to grow, despite risks to global trade including geopolitical tensions. In 2021, our estimated global container volume growth was 7.8%, and this reflects the ongoing growth in global GDP.

But challenges remain. Deutsche Bank’s congestion index points to ongoing pressures and bottlenecks in the broader supply chain with port congestion and inland transportation delays among the key issues, while freight rates are expected to remain elevated.

Trending Topic

Maersk intending to acquire Hong Kong’s LF Logistics. Maersk has announced its intention to complete the acquisition of Hong Kong-based LF Logistics later this year in a deal that will significantly expand Maersk’s warehousing and distribution network. The acquisition is a further step in Maersk’s ambition to become a truly global integrated logistics company as it moves away from being just one of the world’s largest container shipping lines.

Maersk will add 223 warehouses to its existing portfolio, bringing the total number of facilities to 549 globally, spread across a total of 9.5 million square meters.

Maersk will also enter into a strategic partnership with Hong Kong-headquartered trading company Li & Fung to develop logistics solutions, as part of the acquisition. Li & Fung owns 78.3% of LF Logistics with the remaining 21.7% held by Temasek Holdings, the Singapore government’s investment vehicle.

The planned acquisition of LF Logistics is the latest in a series of deals since the middle of last year which also includes two e-commerce logistics companies - Visible Supply Chain Management and B2C Europe Holding – in the US and Europe.

COVID-19 flareups challenge Greater China supply chains. Recurrent COVID-19 flareups in the Greater China region are continuing to disrupt wider supply chains as the country tackles the virus. Even though container loading and discharge operations at ports and terminals have remained normal despite cases this month in Ningbo, Tianjin, Shenzhen, Dalian and Guangzhou, district-level lockdowns and mass testing have led to warehouse closures and trucker shortages.

In Ningbo, transport and warehousing operations are operating normally after a cluster of cases in early January in the city’s Beilun district led to extensive trucker delays as drivers had to undergo testing and quarantine before being allowed into Beilun’s three container terminals. In Shenzhen, there are gate entry restrictions at the city’s Shekou terminal as health officials carry out testing after cases in Shenzhen. In Beijing, several cases of the highly transmittable Omicron variant of COVID-19 are putting the city on alert ahead of the Beijing Winter Olympics due to start on February 4.

The pandemic is also impacting port operations in the global wider Maersk network with Omicron particularly creating acute staff shortages at ports and terminals even through the facilities remain operational. For details of the latest operational constraints click here: Operational constraints in key regions | Maersk

Ocean Update

Unfortunately, this situation is likely to continue for some time particularly now that Omicron has cut workforce numbers in some locations by up to 25%. Our schedule reliability continues to be the best in class, although it is still unacceptable for us. We will continue to seek ways to improve reliability and service levels.

• Key Market Outlook across trades lanes

• Indonesia: Cargo backlogs are expected due to the Lunar New Year holiday, while space is already tight. Omicron cases could impact ground handling activities and cause delays. Cargo shipments to the US need advance booking of 5-7 days. Air cargo rates will probably increase until February due to the Lunar New Year.


• Vietnam, Cambodia, Myanmar: Capacity constraints may worsen due to the fast spreading Omicron variant. Demand is likely to ease during the Lunar New Year but it is likely rebound from mid-February due to limited air cargo capacity in the market.


• Japan: Airlines are expected to operate 253 freighter flights a week from Japan in January, the same number as December. That comes as Kansai and Fukuoka have seen an increase in air cargo volumes. Kansai airport saw international cargo volumes rise 15.3% last year, According to preliminary figures from Osaka Customs.


• Oceania: We are experiencing delays of up to 5 days for inbound air cargo into some Sydney and Melbourne terminals due to a reduced workforce because COVID-19. of current Covid situation. Capacity on the Trans-Tasman route between Australia and New Zealand remains tight, but we have access to capacity with our partner Air Carriers.

• Japan: Demand for trucking services from Yokohama to Tokyo is expected to surge 50% due to restrictions at Tokyo port, tightening available capacity. Around 900 containers a week are forecast to be transported by road, up from the current 600 boxes a week.


• Vietnam, Cambodia, Myanmar: Demand for cross-border rail freight between Vietnam and China is expected to soar due to congestion at road crossings. But rail services are unpredictable due to cargo backlogs at Pingxiang. There is also growing interest in intercontinental rail services between Vietnam and Europe especially if transit times are reduced following service improvements in March.


• Oceania: We continue to offer our Maersk Connect service to support port delays in both Australia and New Zealand. Warehousing is facing multiple challenges including worker shortages due to COVID-19 and capacity constraints which is increasing storage costs. Our facilities offer an immediate and agile solution for storage, fulfilment, deconsolidation and DC bypass requirements to ease capacity issues.


• Indonesia: Inland export demand is trending up for the next three months due to pre-Ramadan seasonality. Demand is also supported by an improving equipment situation with 20ft containers widely available. Trucking capacity is sufficient to meet anticipated high demand in the coming months.

Major Port Update

Major ports update (Vessel waiting time indicator)

Remark: Numbers are dynamic and subject to change.

• Africa: Nacala has been suspended on the M-Express and shippers are advised to transfer cargo to other Mozambique ports


• Asia: Terminals are busy and running at high density although delays are low. Trucking services are suspended in the Jinnan district of Tianjin due to COVID-19 lockdowns. We suggest customers check with our Customer Experience team about the feasibility of changing port of loading/discharge due to possible delays in Tianjin.


• Europe: There is widespread congestion and yard density is at critical levels at multiple ports. Felixstowe is the most severe where we are experiencing wait times of 7-10 days. Most other ports have a waiting time of 2-4 days. In the Mediterranean, Israel is closed due to operational restrictions. Koper, Rijeka and Trieste are also restricted due to bottlenecks.


• Latin America: San Antonio is congested because of the impact from COVID-19. San Juan and feeders at Rio Haina have capacity limitations. Ushuaia and Asuncion feeders have limited capacity due to transhipment constraints.


• Oceania: Increasing numbers of COVID-19 cases in Australia are adversely affecting the supply chain with port and trucking operations especially impacted due to the reduction in workforce numbers. We are experiencing additional vessel waiting times and truck shortages.


• Sri Lanka: Colombo port is facing delays due to high yard density and bad weather.