By Arthur Chen      攝影師：Porapak Apichodilok  連結：Pexels

We are very happy to see that MOL finally propose from a pragmatic perspective that key issues in the industry must be resolved by all governments.

We have discussed many times whether international organizations and governments should intervene in the delays, supply chain disconnection and high prices in the maritime transportation market. Most shipping lines have expressed this issue that everyone should respect to the free market system and wait for the "supply and demand" ends up to automatically balance, then all problems will be solved. However, since the third quarter of last year, international ocean transportation has been unable to deliver goods to global consumers on time due to the lack of empty containers back to the production bases in Asia. It turned out that everyone thought the situation would improve by 2021. But the situation has become out of control now. Most western countries have been vaccinated since early of this year, but it has not been able to solve the continued disruption in the supply chain. The delay is still there, and the ocean freight is so high that the low-price seasonal goods are directly stopped by the importers. Even if the European Union, the United States, and the Chinese maritime authorities all voiced their serious concerns about the current shipping situation, they cannot improve supply chain delays neither. However, some liners seem to have begun to respond in goodwill to the accusations of high ocean freight rates. The freeze-up action started from CMA and expanded to other European shipping lines such as Maersk, HPL, and Japan Maritime Alliance ONE. However, MSC and Asian shipping lines still increase freight rates. Regardless of whether the ocean freight increases or not, it seems that the recovery of the logistics supply chain has not played a key improvement result. There are still long queues of container ships waiting to enter the ports. The ports of the United States are still congested. The rail transit is extremely slow. The trucks are still stuck by not enough chassis. The containers pile up in the port warehouses and railway yards, and large number be misplaced in closed areas . After a year from the port to the inland cities in the United States, it is still difficult, and improvement is far away. It is nothing to do with whether ocean freight rates are high or low the obstacles in land transportation always there.

Finally, Takeshi Hashimoto, president of MOL of Japanese "ONE Alliance", who was the first one to suggest that governments need to intervene the long delays, supply chain disruptions and record high ocean freight rates in order to solve the global logistics market "restored in order". Most shipping lines misjudge that the disorder caused by the covid pandemic won’t be continue soon, thinking that it will return to normal at the beginning of 2022 next year, but MOL recently postponed its forecast until the end of 2022 in returning normal. Although there are great differences of opinion within the shipping industry as to whether government intervention is required or not and the possible forms of intervention, and many shipping lines strongly oppose this idea. But Hashimoto believes the situation is serious enough to require some forms of assistance or coordination from governments to end this round of maritime crisis. He pointed out that "if the free market is completely allowed to operate and companies are allowed to do their best to find the best solution, it will lead to more and more turbulence and the situation will get out of control. Although respect for the free market economy and the spirit of competition is essential, the global Shipping is an industry that deeply relies on the infrastructure of all countries in the world. He really broke the dead knot of the current transportation in simple words. It is not strictly on direct capacity of the shipping lines can solve it! The key obstacles are in the port infrastructure, railway and highway facilities need to be improved. The paralysis of transportation over a year can explain the serious backwardness of the US infrastructure. For example, the latest 24,000 TEU Mega ship cannot load and unload containers at most US ports because the bridge cranes equipment are not high enough to make it. Solving the dead knots need the input from governments reinforced to get through currently paralyzed in transportation. According to news reports, the Biden administration has put pressure on the Port of Los Angeles and Long Beach, the US main gateways to Asia, to extend truck loading and unloading time to ease ship congestion. Last week, after the two ports negotiated with the U.S. Department of Transportation (DoT), the Port of Long Beach will try to operate 24 hours a day, while the Port of Los Angeles will extend its weekend and night operations. It is expected that the longer working hours can at least relieve the more backlog of containers. However, some port union representatives went out to oppose overtime work. At this stage, as President Tsuyoshi Hashimoto said, it is necessary for governments of various countries to intervene to coordinate local problems.

The international shipping industry is a capital-heavy business, and it requires large investment in production equipment such as ships, containers, port equipment, etc. in order to run business operations. At the same time, the transportation industry will follow the cyclical economy which leads uncertain good or bad. Chip manufacturing and ocean shipping have some of the same ups and downs. They often usher in a "tight day" after heavy investment. Both industries need a new long-term planning method that focuses on predictable and stable investment rather than do investment at prosperous time. However, the chip industry has very little connection with the infrastructure of various countries, although it is also a cyclical business. The shipping industry cannot be alone, and it cannot be done once and for all by simply expanding the capacity. If the infrastructure of various countries is not well in place, the capacity is unrestricted increase will only cause transportation congestion and interruption. We are very happy to see MOL finally propose from a pragmatic perspective that key issues in the industry must be resolved by governments. This first step has been taken. I hope that governments of various countries can coordinate the solution more vigorously. We need a predictable future.

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