If you take a direct hit from a Category 3 hurricane, the fallout is far more severe if the storm stalls over your house than if it quickly passes by. The same goes for supply chains. When demand is super-hot, port and transport infrastructure can deal with short spikes, but eventually, they buckle.
Backlogs in the U.S. are mounting in the face of surging imports. Container equipment in China is running out. When could the supply chain get some relief? Next month or next year?
Hapag-Lloyd Aktiengesellschaft (OTC: HPGLY) CEO Rolf Habben Jansen commented on timing on Friday's quarterly conference call, after the German carrier reported net income of 252.5 million euros for Q3 2020, up 68% from 150.4 million euros in Q3 2019.
Habben Jansen's short answer was: Strong volumes and equipment constraints will last through year-end if not longer.
The more nuanced answer from Habben Jansen — who struck a conservative tone — was that today's cargo pace won't last forever, there could always be a big fall around the corner, and equipment shortages will ease.
Demand high through Chinese New Year
“We have seen a very strong recovery — probably stronger than anyone anticipated,” said Habben Jansen. “If we look ahead, the market looks pretty strong at least until Chinese New Year [in mid-February],” he reported.
Asked whether he thought fresh consumer demand or inventory restocking is driving volumes, he replied, “Based on what we see right now, [the market] is indeed being driven by demand, not so much by restocking.
Hapag-Lloyd CEO Rolf Habben Jansen (Photo: Hapag-Lloyd)
“I would expect there would be more restocking going into 2021. And on top of that, people may decide …
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