Due to the impact of the new crown pneumonia epidemic, the decline in international logistics capacity has led to a sharp increase in container ship freight rates. The freight rate of the US West route has increased by nearly three times compared with the beginning of the year. Under the background of tight capacity, the industry frequently produces container dumping. What happened?
1. What is the current freight/container situation of some shipping countries or regions?
1. BIMCO emphasizes the long-term increase in freight from the Far East to the United States
According to BIMCO’s latest analysis, ocean freight is rising. Taking into account the current strength of the spot market, although the long-term increase in freight rates is in line with BIMCO’s expectations, they pointed out that since most containers are transported in accordance with long-term contracts, the increase in freight rates is more important to shippers.
According to BIMCO’s data, in the first six months of this year, container traffic between the Middle East and North America fell by 8.5%, and in July and August, container traffic proved to be strong. Strong sales in July and August exceeded a year ago. BIMCO’s analysis shows that although the annual freight volume dropped by nearly 2.5% compared with last year, the container freight volume increased by 180,000 TEUs in July and 280,000 TEUs in August, the majority of the increase From the Middle East to North America trade.
A key factor is the ups and downs of the retail business. BIMCO emphasized that after eight months, retail sales have increased by nearly 1% compared to 2019. Previously, retail sales fell by nearly 15% in April due to the United States’ lockdown measures.
BIMCO Chief Shipping Analyst Peter Sand (Peter Sand) wrote that strong demand for goods means that container shipping will be less affected than the overall growth data shows, because of the dependence of the worst-hit industries on trade Smaller.
He said that the impact of container shipments to the United States was less than the impact indicated by the overall growth rate, because many of the worst-hit industries (such as the service industry) are less dependent on trade than retail, which has proven的flexibility. In addition, the decline in imports in the first half of this year means that inventory needs to be restocked, and importers may wish to reserve inventory in advance before the second wave of the epidemic disrupts the supply chain.
As a result, freight rates to the United States (cross-strait) increased more than the current rate of increase in Europe. In some cases, BIMCO reports that interest rates have even risen by hundreds of dollars overnight.
According to BIMCO data, long-term freight rates into the west coast of the United States have increased for the first time. Between September 30 and October 1, long-term interest rates rose by 37%. Although they fell, they were still 44% higher than the same period last year. The rate on the East Coast of the United States has experienced a similar 30% increase, and although it has also fallen back, BIMCO data shows that it is still 25% higher than the same period last year.
2. Shipping to Europe increased by 12%
BIMCO pointed out that between the Far East and Europe, the volume of container shipments in the first eight months of this year dropped by more than 10%, and freight rates increased gradually but slowly. Compared with the end of September, freight to Europe has increased by 12%, similar to the small increase in spot market freight on the Nordic route.
3. Sea freight volume on South American routes increased by 35.9%
The rapid growth of transportation demand on South American routes and the severe shortage of some liner companies (especially 40-foot-tall containers) have caused the supply of space on the routes to exceed demand, and market freight rates have continued to rise sharply.
The South American Eastern Route Index was 1320.7 points, an increase of 15.2% over the previous period; the South American Western Route Index was 1603.2 points, an increase of 35.9% over the previous period. South American routes will be difficult to find the cabin before November or even the end of October, and freight rates will continue to rise.
4. Sea freight prices from India to European and American ports soared
The staff of a logistics company in India said that it takes 10-15 containers a week to ship goods to the United States. Now each container has to pay nearly 3,600 U.S. dollars. In September alone, the interest rate increased by 40%.
According to the survey, the shipping price from Indian ports to European and American ports has risen by 30-40%, reaching US$4,000 to US$4,500 per 20-foot container (TEU), and with further increases in October, the rate may soon break through US$5,000. Traditional export-oriented industries, such as textiles, leather, automobiles, and other industries, feel pressured by their meager profits.
5. Supplementary information: shipping company Hapag-Lloyd implements higher charges
Hapag Lloyd has decided to implement higher fees for multiple destinations from the Middle East and the Indian subcontinent from mid-October to November.
In particular, the company will charge General Freight (GRI) from these regions to the United States and Canada on all these refrigerated, refrigerated, non-operating reefer containers, storage tanks, flat racks and open top containers from these regions.
US$800 per 20-foot standard container
USD 1,000 per 40-foot standard container (40 feet x 8 feet 6 inches)
US$1200 per 40-foot high cube container (40 feet x 9 feet 6 inches)
US$1200 per 40-foot reefer container (40 feet x 9 feet 6 inches)
The shipping company also announced a new East Asian charging standard, that is, starting from October 15th, the general freight rate (GRI) for each container will be increased by 300 US dollars for the first time, and it will be applied to all goods and all container types from East Asia to South America. coastal.
These regions include the Republic of Korea, China, Taiwan, Hong Kong, China, Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, the Philippines and the Pacific coast of Russia.
2. The freight rate is soaring and the containers are frequently dumped. How about the domestic and foreign routes?
According to reports, since May of this year, shipping prices have been rising, and even the phenomenon of “difficult to find one container” frequently occurs on many routes, which has put a lot of pressure on the logistics costs of enterprises.
Among the international shipping routes, the China-U.S. routes had the largest increase. As of October 9, the freight rates of Shanghai’s exports to the West and East U.S. basic ports were US$3,848 and US$4,622 per container, respectively. It is a new high since its release in 2009, and the price per container has risen nearly three times compared with the price of US$1,361 per container in early March.
The person in charge of a logistics company said that in addition to the skyrocketing shipping prices and difficulty in ordering containers, shipping companies have limited space during peak freight seasons, and popular routes are also prone to explosions and dumping of containers.
In this regard, the general manager of a logistics company in Shenzhen said: For shipping companies, spaces are pre-sold, and more spaces may be pre-sold than can be loaded. Because the shipping company also has to avoid some temporary cancellation of space, so if the booking and actual loading are not balanced, they will choose to drop some spaces.
The China Export Container Comprehensive Freight Index released by the Shanghai Shipping Exchange shows that since May, the freight index has continued to rise. As of October 9, the Shanghai Comprehensive Export Container Freight Index, which reflects the spot market, has recorded 1438.22 points. Reached the highest level since September 2012.
A relevant person in charge of a container manufacturing company said that the tight shipping capacity is not only reflected in freight rates, but also in matched containers. Judging from their company’s container sales, the entire month-on-month growth rate in July and August was rapid, and container production It’s already the end of the year.
In this regard, SDIC Anxin Futures stated that due to the time lag of the impact of the epidemic on terminal demand and the policy remedial measures adopted by the government, the performance of terminal demand has been overestimated. In the short term, the supply and demand gap caused by the impact of the epidemic is once again Expansion may become an important driving force for the maintenance of high transportation demand. In September, my country’s total export volume was 239.76 billion U.S. dollars, a month-on-month increase of 1.9%. Export data also confirmed the rationality of the speculation, but we still need to closely observe the marginal changes in trade.
At the same time, SDIC Essence Futures expects that the freight rate will continue to operate at a high level in the future, and then as the port congestion is relieved, the freight rate will fall back. However, due to the existence of the supply and demand gap in Europe and the United States under the background of the epidemic, it will form a strong support for the freight rate. , The price correction is not large.
3. The recovery of foreign trade drives exports. What about the future shipping situation?
The outbreak of the overseas epidemic in the second quarter led to production stagnation, which caused China’s share of global exports to increase. The rapid increase in shipping prices on US routes was mainly due to the gap in shipping supply and demand. The increase in shipping prices also allowed major shipping companies to earn a lot in the consolidation sector. Full of.
According to industry insiders, due to the impact of the epidemic this year, most shipping companies had previously had pessimistic expectations about the international shipping situation, and therefore reduced their shipping capacity. With the domestic epidemic under control, my country’s exports showed strong resilience. According to data from the General Administration of Customs, my country Exports started in April and have been increasing for six consecutive months.
The cumulative increase of 1.8% in the first three quarters exceeded market expectations. The total export value in September was 166.197 billion yuan, a year-on-year increase of 8.7%. The current high freight rates and difficulty in booking space are mainly due to the difficulty of the shipping company’s capacity to meet the sudden increase in shipping demand.
In this regard, Lin Qingwen, the managing director of Shenzhen Yantian International Container Terminal Co., Ltd., said: After the epidemic was brought under control, the resumption of work and production has also driven the growth of foreign trade. There are two main reasons: first, many foreign trade orders are replenishing orders; Boundary e-commerce brings new types of goods. Yantian International’s throughput reached 1.42 million TEUs last month, which should be the highest record for a single terminal in the world.
According to a report from China Communications News, the Shanghai Shipping Exchange analyzed the reasons behind the increase in freight rates and the tightness of shipping capacity, which was partly due to the recovery of the shipping market. At present, the epidemic situation in some countries has been initially controlled, and various production and operation activities are in the stage of recovery. The market demand for civilian and epidemic prevention materials has increased, which has promoted the slow recovery of transportation demand, which has led to a rise in freight rates to some extent.
But at the same time, the Shanghai Shipping Exchange also pointed out that the increase in freight rates on the Eurasian route does not mean that the market has fully recovered. In fact, the large-scale suspension of cargo ships formed under the control of the shipping company’s capacity may be the key factor for higher freight rates and tight capacity.
However, according to the analysis of shipping consulting agency Alphaliner, although the full recovery will not be too fast, as the global blockade due to the epidemic is gradually lifted and demand begins to recover, demand will have a chance to rebound by 6.8% next year, while the market capacity supply will increase by approximately At 2.8%, the supply and demand situation is expected to improve significantly.
According to industry insiders, even if China has now fully resumed work and production, and European and American countries have restarted economic activities, the epidemic has dealt a heavy blow to container shipping companies. It will take time to restore normal transportation conditions in the past, plus the United States The peak consumption season is approaching. At present, it is still a high probability event for shipping prices to maintain a high level in the next period of time.