Market Overview

Two Typhoons Menace Asian Sea Freight Centers

Two Typhoons Menace Asian Sea Freight Centers

Many of north-east Asia's mega ports are directly in the path of two super-typhoons. The first is about to blow in from the Pacific and make landfall within the next few hours.

The first is typhoon Lekima, which, at the time of writing was moving at a speed of 18 to 23 km/h (11 miles per hour to 14 mph) with maximum sustained wind speeds of 162 km/h (100 mph). Lekima is forecast to weaken over the next five days down to a wind speed of 68 km/h (42 mph).

The typhoon has blown in from the Pacific and has narrowly avoided the northern tips of the Philippines and Taiwan. FreightWaves understands from sources that freight-related businesses in the northern Taiwanese city of Taipei are currently closed. More than 300 flights have been cancelled in Taipei, local media have just reported.

Lekima is due to make landfall at about 15:00 Coordinated Universal Time (11:00 U.S. Eastern Daylight Time; 08:00 Pacific Daylight Time Friday August 09).

Chinese ports in the path of Lekima

Lekima is forecast, with a high degree of probability, to curve along the north-east coast of China. And that means the typhoon will run right across some of the world's busiest container ports.

The port at Taizhou, Zhejiang Province, will be hit at the same time that Lekima makes landfall. Taizhou is a narrow river-mouth port with fairly small volumes of about 150,000 twenty foot equivalent unit (TEU) ocean shipping boxes in the first half of the year, according to China's Ministry of Transport.

However, to the north, the ports are so much busier.

They are, in geographical order travelling from south to north, Ningbo-Zhoushan (13.9m TEU in the first half (H1) of 2019); Shanghai (21.6 million TEU H1); Lianyungang (2.4 million TEU H1); Rizhao (2.13 million TEU H1) and Qingdao (10.3 million TEU H1).

Just to the northern side of Lekima's path is Weihai (460,000 TEU H1). The port at Tianjin (8.3 million TEU H1) may also be affected in the future, although it currently lies outside the five-day forecast path.

Typhoon Krosa

Meanwhile, to the south and east, typhoon Krosa may well yet menace Japan. At the time of writing, Krosa is only moving very slowly, about 4km/h (2.5 mph) but it has very destructive winds of 155 km/h (96.3 mph).

Krosa is still far out to sea and it is unclear where, if at all, it will make landfall. Typhoons are fickle beasts and Krosa could veer away.

However, at the moment, Krosa is forecast to run straight into the southern parts of the main Japanese islands. The best five day estimates at the moment suggest it may hit land anywhere between the far southern tip of the island of Kyushu to the tip of the Kii Peninsula (the large peninsula on the main island and immediately to the east of the large island of Shikoku).

The main ports that may be affected are Kobe (2.9 million TEU in 2017) and Osaka (2.3 million in 2017) although they are somewhat sheltered in Osaka Bay and are behind the mountains of the Kii Peninsula.

Freight insights

FreightWaves contacted several freight executives as to what all this might mean for freight in, around, and out of the region.

One logistics executive suggested that there can be serious adverse effects for just-in-time delivery supply chains but then qualified that by pointing out that Asia experiences a lot of typhoons at this time of year. Accordingly, logistics businesses in the region are prepared for it, he argued.

Effect on ocean shipping

An ocean shipping executive talked about the effects on ships.

"Looking at the map, ships will be looking at moving away from those areas around about now. It's all about preparation. If you get caught, you're stuffed. In my sailing days, I've seen days where you know there is a God up there. We were off the coast of South Africa on this one trip. Oh my God, I still have visions of that trip. You really know you're at the mercy of the ocean," he explains.

He explained that ship's navigators will be looking at the weather, weather-routing software and ECDIS very closely. While they update instantaneously, "you only see movement every six hours," the former marine explained.

Ships will start to slow down and / or they will follow in the typhoon's path he added. However, that latter tactic carries some risk in the current situation as there are two typhoons.

"I have never, ever, experienced two simultaneous cyclones," he commented.

A cyclone and typhoon are basically the same weather phenomena; they just have different names in different parts of the globe.

From the freight moving perspective, he points out that "this is where your ETAs [estimated times of arrival] go out of the window. And what happens in ports will largely depend on the decisions of the port authorities," he says.

Effect on air freight

Air freight specialist Andrew Coldrey, vice president Oceania at C.H. Robinson, explained that the logistics effect of the typhoons will depend on whether the ocean carriers decide to make a lot of port omissions or not.

"Sometimes a vessel will just delay and that causes bunching up. But if ships omit ports it can push through to air freight," he explains.

However, he doesn't foresee a lot of adverse effects from the two typhoons. Firstly, C.H. Robinson offices in the area are not reporting any major vessel delays at this time. And, secondly, Coldrey points out that ocean carriers have been making a lot of blank sailings of late. And, he adds, it's another few weeks before the next set of major Chinese holidays.

"So it's unlikely to have a lot of effect," Coldrey says.

In relation to the immediate air freight market – aircraft don't, after all, fly through typhoons – Coldrey notes that air schedules, especially pure air freighters, are changed all the time. So he notes that the spot market may "spike in the near period".

He also notes that some airlines are now reporting delays and cancellations.

"But our understanding is that it will not materially affect the current air freight market," he says.

Effect on port-trucking

Finally, FreightWaves has previously been advised by trucking executives to remember the effect of schedule delays and ship bunching on trucking operators.

When ships are delayed and they arrive in bunches, it creates problems for trucking operators who suddenly have to cope with large volumes of boxes that have been discharged within a short time-frame. That can cause trucking operators to incur extra costs and to carry out extra activities without necessarily improving their returns.

Image Sourced by Pixabay


Related Articles

View Comments and Join the Discussion!

Posted-In: Freight Freightwaves Logistics Supply ChainNews Global Markets General