East Asia is experiencing a historically intense typhoon season, with activity projected to be 60% above the historical average, driven by a super El Niño. This phenomenon is impacting major trade hubs across China, Japan, the Philippines, and Vietnam. The recent Typhoon Dolphin, for example, removed approximately 500,000 TEUs of container capacity from China's top three ports in two weeks, forcing major carriers like Maersk and Hapag-Lloyd to skip port calls.
The typhoons have led to significant port congestion, with the number of vessels waiting off the Port of Shanghai surging from 24 to 139 in two weeks, a nearly two-year high. Similarly, Ningbo's queue grew from 11 to 77 ships. Average wait times have stretched to five to six days for some services, and some carriers reported berthing delays as long as nine days. This has resulted in carriers rolling Shanghai cargo and forwarders noting “volatile vessel schedules.” This disruption is hitting Asia-Latin America and Asia-Europe services particularly hard.
The ongoing congestion and capacity constraints are keeping vessel utilization high and slowing down rate reductions, even as demand on Asia-to-North America and Europe trade lanes begins to soften. Transpacific ocean rates recently ticked up 2%, with prices reaching over $7,600/FEU for the West Coast and about $9,800/FEU for the East Coast. Carriers are implementing blank sailings, exacerbating the operational friction and lead-time volatility. Shippers are advised to build slack into their booking calendars, diversify port and carrier mixes, and gain upstream visibility to mitigate the impacts of these ongoing disruptions.
This record typhoon season, coupled with the existing Panama Canal bottlenecks, signifies a “structural shift” in global trade where shipping routes are increasingly subject to leverage and risk due to extreme weather events. The impacts are expected to persist, with forecasters anticipating more tropical cyclones. This situation demands that businesses plan for a prolonged peak environment and adapt to persistent supply chain challenges.
