At present, many Asian ports are facing a serious shortage of containers. Most of the containers are stranded in destination ports in Europe and the United States, making it difficult to return as soon as possible. In the limited number of return containers, new problems have emerged.
South Korea’s Busan Port Authority (BPA) recently stated that empty containers returned to the port from overseas have not been cleaned and inspected as they should .
In response, local truck drivers complained that the shipping company neglected the inspection, cleaning and maintenance of the containers, and instead shifted the responsibility of maintaining the containers to them.
It is understood that from November 16 to 24 this year, BPA collected 30,792 samples of empty containers from 9 container terminals in Busan Port for inspection. The results showed that the condition of 52% of empty containers is not ideal .
BPA stated that many containers need to be cleaned again . In addition, insects such as cockroaches and spiders were also found in some containers .
More importantly, 59% of all return empty containers have defects . The defect rate of empty containers returned to the port by Korean domestic importers was 47.2%.
"This is because the shipping company did not conduct proper inspections before shipping containers to Busan Port." BPA said.
It is understood that since 2018, with the assistance of local fisheries departments, animal and plant quarantine agencies and customs, BPA has been paying close attention to the cleaning and damage of containers and conducting related investigations.
Investigations have shown that in many cases, the exterior or interior of the container is obviously damaged, and garbage is deposited. About 1.2% of containers had to be replaced because they could not be repaired.
At present, the shortage of containers in the Asian market is still severe, while more and more containers are stranded in American ports.
Major US ports, including the Port of Los Angeles and the Port of Long Beach, have generally experienced equipment shortages and extended loading and unloading times. Coupled with the serious container imbalance problem in Pacific trade, a large number of imported containers are backlogged in American ports, causing terminal congestion, container turnover, and cargo transportation.
This situation has intensified, making the local port "close to complete paralysis."
Although shipping companies are also trying various ways to seek various solutions to speed up the dispatch of empty containers, according to Maersk’s estimation, many countries around the world are experiencing national blockades due to the second outbreak of the epidemic, and the shortage of empty containers is expected to remain Will continue.
In 2020, global shipping logistics started as a nightmare due to the outbreak of the new crown epidemic, but at the end of the year it ushered in unprecedented popularity. The price of container transportation has been rising for several consecutive months, and the current freight rate can be described as "rising every day"...
The spot freight rate from Asia to Northern Europe is at a record high, and the annual contract price is expected to rise sharply. The impact of the new epidemic lockdown measures on sales, shippers have increased concerns about soaring freight and surcharges, which may lead to next year The wave of order cancellations.
Asia-Europe part of the freight rate exceeds 10,000 US dollars, and shippers face challenges in the Asia-Europe contract season
The freight forwarder stated that since Asia-Europe freight rates have increased by at least 5 times year-on-year, and the total freight rates of some goods have exceeded US$10,000/FEU, shippers are delaying or canceling shipments before the freight rates are adjusted.
The Shanghai Container Freight Index shows that in the week ending December 11, spot freight rates in Asia and Europe increased 24% from the previous week to US$2,948 per TEU. However, freight forwarders stated that the index reflects market conditions incompletely, and shippers’ quotations exceeded $10000/FEU.
A source said: "We are beginning to see customers canceling reservations because the prices are too high."
Shipping from China to the UK in January, the shipping company is now quoting 10,000 US dollars / 40'HC at sight, the source said: "I heard that the price is 13,500 US dollars."
In addition to the additional costs of shipping companies, including the increase in scheduled cancellation fees, freight forwarders worry that customers will refuse or fail to pay all the additional costs caused by the interruption of the supply chain.
European shippers are preparing for the upcoming contract season and have issued warnings to shipping companies that they will take further action if they try to maintain this year’s sharply increased rates.
The freight from Asia to Europe is as high as US$10,000/FEU, including various surcharges currently applicable to the industry. The Global Shippers Forum (GSF) said that due to “overpriced”, many shippers are currently not delivering goods at all. Small and medium-sized companies cannot pay additional fees.
GSF Secretary General James Hookham said: “The shipper cannot afford the various increased rates and therefore loses business.”
Freight rates in Europe and East Asia continue to rise
▍Maersk announced new fees in Europe and East Asia from December to next year
Maersk announced a new peak season surcharge (PSS), which applies to refrigerated goods from the Far East to Northern and Southern European countries. The surcharge will be $1,000 / 20' reefer container, $1,500 / 40' reefer container, effective from December 15th, and Taiwan will be effective from January 1, 2021.
In addition, since December 1, MSC has implemented PSS of US$500/20' and US$750/40' for all dry goods from the UK, Ireland, Northern Spain, Portugal and the Baltic Sea to the Far East.
In addition, MSC has adjusted the following rates starting from December 1, 2020 until further notice, but not exceeding December 31, 2020.
▍Hapag-Lloyd announced to increase the surcharge from Asia to many places in Europe
A few days ago, Hapag-Lloyd announced new prices from Asia to Europe and the Mediterranean, which will take effect on January 1, 2021.
Hapag-Lloyd also issued a new general tax rate increase (GRI) for all dry containers, reefer containers, non-operational reefer containers, storage tanks, flat racks and open-top containers from South Asia and Northeast Asia to Australia , since January 1. Effective.
Southeast Asia to Australia
US $ 150/20'
US $ 300/40'
Northeast Asia to Australia
US $ 300/20'
US $ 600/40'
From December 7th, Hapag-Lloyd will implement another GRI for all goods and all types of containers from East Asia to the East Coast of South America at USD 550 per container.
At the same time, Hapag-Lloyd announced that it will postpone the GRI implemented in eastbound trade from East Asia to all destinations in the United States and Canada on December 1, and the new effective date is January 1, 2021.
This general rate increase is applicable to all dry goods, refrigerated cabinets, non-operational refrigerated cabinets, storage tanks, pallets and open top containers. Details are as follows:
East Asia to North America (United States and Canada)
US$960/20'
US$1200/40'
East Asia includes countries/regions in Japan, South Korea, China, China/Taiwan, China/Hong Kong, China/Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, Philippines, and Russia’s Pacific Rim provinces.
In response to the current serious shortage of containers in the Asian market, Hapag-Lloyd CEO Habben Jansen recently stated that “the congestion of the port and the strong demand in the market have caused the increase in traffic to exacerbate this problem. This kind of tension will continue for another 6-8 weeks. It will be alleviated.” The pressure on the supply chain caused by the shortage of containers in Asia will continue for at least another 6-8 weeks, which means that shortages will still be faced in the next two months, which will also affect shipments before the Spring Festival.
Container freight rates continue to soar, reaching high levels far above the long-term sustainable level. The Shanghai Container Freight Index (SCFI) set a record of 2131.71 points, an increase of 162% over the same period last year. After experiencing a sharp increase in freight rates that initially lags behind the Pan-Pacific region, spot freight rates in northern Europe have soared up 230% compared to the same period last year. Moreover, the freight quotation in Asia and Northern Europe has reached US$10,000 per 40-foot high cabinet.
According to the shipping index released by the Shanghai Shipping Exchange in the latest issue, the overall export container shipping market in China remains high. The freight rates of most ocean routes operated steadily, and some increased significantly, and the composite index rose. On December 11, Shanghai's comprehensive export container freight index was 2311.71 points, an increase of 8.6% over the previous period.
Asia to Europe (Far East Europe Mediterranean route) : Near the end of the year, the volume of the European market remains high. The recurrence of the epidemic has also stimulated the growth of local import demand and strong transportation demand. The lack of containers in the market also affects European routes. Strong market demand and severe equipment shortages are expected to continue after the Spring Festival in 2021.
Last week, the average occupancy utilization rate of ships in Shanghai Port remained at the full level. Affected by this, most airlines increased their freight rates sharply in the middle of the month, and the spot market booking prices rose sharply. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the European basic port market was US$2,948/TEU, an increase of 24.2% from the previous period. In the Mediterranean route , the market situation is basically the same as that in Europe, and the spot market freight rate has risen sharply. On December 11, the freight rate (sea freight and ocean freight surcharges) for exports from Shanghai to the Mediterranean basic port market was 3073 US dollars/TEU, breaking the 3000 US dollars mark, an increase of 28.9% from the previous period.
However, there is news that the actual freight paid by the shipper is much higher in order to ensure the container and the final remaining European space . Lars Jensen of SeaIntelligence said that there is anecdotal evidence that the exact freight paid by shippers on the Asia-Northern Europe trade route may be as high as US$5,000 per TEU. Jensen explained: “In this case, it’s important to note that in some cases, SCFI underestimates the actual freight paid because there are additional costs related to equipment and space availability.”
A British freight forwarding company confirmed to The Loadstar that the freight quotation in Asia and Northern Europe has reached US$10,000 per 40-foot high container . "It's crazy," he said.
At the same time, all carriers will raise GRI again on December 15 . The current extreme shortage of 40-foot high cabinets suggests that alternative alternatives will continue to increase in freight rates this week; it is worth noting that due to port congestion and limited land capacity, cargo to the UK is subject to many restrictions, and delays and operational problems are expected. Some carriers stopped accepting bookings sent to the UK.
Due to the strong demand for containers and the backlog in recent weeks. CMA CMA CGM notified that it will temporarily stop accepting bookings from Asia to Europe, that is, temporarily suspend bookings for the 49th, 50th and 51st week Asia-Northern Europe routes. Another shipping company recently told Asia-Northern Europe customers that if the shipment is cancelled within two weeks after the shipment date, it hopes to charge a fee of US$1,000 per TEU.
Asia to North America (trans-Pacific eastbound route): The US epidemic is showing a trend of major outbreaks, with new cases hitting new highs in a single day. Severe epidemics have caused frequent port congestion and blocked transit. The problem of equipment imbalance in Asia continues, and supply and demand are severely unbalanced. Ningbo Port, ports in Southeast Asia and Busan Port are the loading ports with the most serious equipment shortages. The carrier's cargo backlog has become more serious, and it is increasingly difficult to book containers.
Last week, the average space utilization rate of ships on the Shanghai Port to West and East US routes remained close to the full load level. The freight rate is high and stable, and the spot market booking price is basically the same as the previous period. SCFI data shows that the spot freight rate from Shanghai to the east coast of the United States increased by 104 U.S. dollars to 4804 U.S. dollars per FEU, an increase of 91% over the same period last year, while the freight rate to the U.S. West Coast was basically the same at 3,984 U.S. dollars/FEU. Nevertheless, it has increased by 188% compared to the same period last year.
There does not appear to be any sign of slowing down in freight volumes to the West Coast of the United States. The Port of Los Angeles expects that containers will increase by 48% and 44% in the next two weeks. The Los Angeles and Long Beach terminals are under tremendous pressure due to the sharp increase in throughput. According to forecasts, the total volume of the Port of Los Angeles in the fourth quarter will increase by 40% year-on-year, exceeding 850,000 TEUs. Ships are waiting at the anchorage in San Pedro Bay for a long time. 6 days.
Jon Monroe of Jon Monroe Consulting, Washington State, said: "Consumer recovery is gaining momentum. Black Friday sales have grown strongly, up 21% from last year. If you have not ordered the goods shipped before the Lunar New Year, you may be too late. Up."
South American routes: The raging epidemic has affected the production capacity of South American countries, their dependence on foreign materials is high, and transportation demand has remained high. In this period, most of the average space utilization of ships in Shanghai Port is at the full load level. Near the middle of the month, most airlines increased their booking prices, and the spot market freight rates rose. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the South American basic port market was 5876 US dollars/TEU, an increase of 12.5% from the previous period.
In other routes, SCFI's spot freight rates have risen almost across the board. For example, the freight rates from Asia to South Africa rose 15% this period to US$2,289 per TEU, an increase of 130% over the same period last year.
As my country's foreign trade exports gradually stabilized and improved, the lack of domestic export capacity has appeared in many places, and for a period of time, it has also been accompanied by a shortage of containers.
Recently, a 1℃ reporter from China Business News found that the main reason for the “difficult to find one container” situation was that due to the epidemic, the efficiency of container turnover was reduced, and the port congestion caused a large number of delays in shipping schedules, which further aggravated the return of containers. smooth. With the efforts of domestic container manufacturers in recent months, the shortage of domestic containers has improved, and the shortage of some ports has eased.
However, new container manufacturers dare not continue to expand production capacity. Because of the epidemic, market uncertainty continues.
According to the 1℃ reporter's further on-site investigation, the shortage of containers has stimulated the kinetic energy of new container construction in China, and the prices of raw materials and labor have risen. The ex-factory price of new containers will rise accordingly. For the high freight rates, it is the foreign trade companies that ultimately suffer the loss of profits.
Inefficient port congestion
On the afternoon of December 2, when the 1℃ reporter arrived at Shenzhen Yantian International Container Terminal, the containers were piled up like a mountain, and heavy semi-trailer trucks entered and exited in file at the gate: the first class trucks were fully loaded with the containers that were about to be exported and went through automatic inspection. The passage enters the terminal, and the other type is an empty truck, which enters the gate and exits after the airspace cabinet. Many large trucks are still lining up to pick up the containers.
Chinese exports with a major source of container in two aspects, one is emptying the old container port after unloading , the second is Chinese-made box business of new office box . According to statistics from China Container Industry Association, usually the storage size of empty containers at ports is about 4 million TEU (Twenty-feet Equivalent Unit, the international standard unit, a container with a length of 20 feet is the international unit of measurement), and the port unloads old containers. It is the main source of supply for export boxes in my country.
We have not yet seen data on how many empty containers are available in the yards of domestic ports such as Yantian Port, but statistics from the China Container Industry Association show that since this year, China’s major foreign trade container ports have unloaded old container stocks with export growth and overseas adjustments. Due to restrictions on the return of empty containers and other factors, the unloaded old container stock of the seven major foreign trade container ports continued to decrease from about 3.05 million TEU at the end of February 2020 to about 1.85 million TEU at the end of October, compared with the same period in the past five years A reduction of 26%.
Photo: Yantian International Container Terminal is located in Dapeng Bay, east of Shenzhen. Photo/Wu Mianqiang
At present, domestic export containers are still very tight. In addition to the fact that container transportation has broken the original arrival and delivery balance level, the decline in container circulation speed and port congestion are also one of the main reasons.
As the "barometer" of global trade, containers have a complete set of operating procedures. According to people in the shipping industry, taking shipping as an example, the port terminal is a transfer station for containers. Export companies book space and containers from the freight forwarder. After passing through the export customs broker, the trailer fleet consisting of semi-trailers goes to the terminal and other yards to pick up containers After the container is filled with cargo, it is sent to the port terminal for export. After the liner arrives at the destination port with the container, the local cargo owner arranges customs clearance, picking up the container, unloading, and returning the container to the terminal yard. After waiting for the local export company to book, pick up the container and load the cargo, the container will be transferred back to China by liner.
However, the lingering epidemic has affected the efficiency of the above-mentioned container operations. Overseas epidemics have repeated, and the efficiency of local cargo owners in customs clearance, container picking and unloading is low. The relevant person in charge of the Guangdong small appliance export company previously interviewed by the 1℃ reporter said that their company's goods are in the ports of European and American countries .
Affected by the epidemic, many countries have experienced labor shortages, especially port operators, trailer truck drivers and related logistics personnel.
Master Sun, a truck driver picking up cargo at the Shenzhen container yard, told the 1℃ reporter that the company’s overseas business divisions had a "labor shortage". The United States had just finished Thanksgiving and will enter the Christmas season, which will further increase labor. tension.
The China Container Industry Association recently issued an "Action Initiative for Enterprises in the Container Industry Chain to Work Together to Stabilize Foreign Trade and Promote Growth", which stated that "Due to the increase in the number of infected people and the requirements of epidemic prevention measures, shippers (from across the ocean) cannot normally get from ports. The goods are shipped out of the cargo yard, and some goods are even rejected after arriving at the port. This has caused more and more containers to be piled up in disorder at the port. This disordered storage has caused the shipping company’s ships to be unable to dock and offshore on schedule. Affected the turnover efficiency of containers."
"From a global perspective, the supply chain of container transportation has slowed down. This is also one of the important factors that have caused global container tension." said Zhao, who has been in the shipping industry for more than ten years. Therefore, ports are definitely better than Congestion in the past was inevitable.
The prevention and control of the epidemic has also reduced the efficiency of domestic container operations. Lao Zhao recently told reporters at 1℃ that after the liner arrived at the domestic port, compared with the non-epidemic period, the quarantine process and procedures have increased. For example, the container needs to be disinfected, which leads to a longer time for customs clearance and unloading. "The crew cannot go ashore. It needs to be isolated and rotated first."
Port congestion will lead to adjustments in shipping schedules and affect the efficiency of container transportation. Since the third quarter of this year, the Ocean Network Express (ONE) of the TA Alliance has continued to update the schedule adjustment notice on its official website. The reporter at 1℃ found that most of the reasons were caused by port congestion.
From December 1st to 4th, ONE continuously issued more than 20 notices regarding the Shanghai Port shipping schedule changes or late opening notices, mostly due to "the effect of port congestion causing delays in shipping schedules." In the past November, there were more cases of ship delays due to port congestion. ONE is a Japanese container shipping company headquartered in Tokyo and Singapore. It was established as a joint venture by a Japanese shipping company in 2016, with a fleet of over one million TEUs.
"Once there is congestion in the port, the operation efficiency of containers will be low, which will further aggravate the tension of container use." Lao Zhao said.
As the international container ocean trunk transportation hub port in South China, Yantian Port is one of the world's largest single-handle container terminals. It mainly serves routes exported to Europe and the United States. Nearly 100 liner routes reach Europe, the United States and other regions every week. The 1℃ reporter found on the scene that the port was busy, and the gates were still slightly crowded. Many large trucks stopped at the door and waited for the relevant procedures to be completed, while the large trucks that had already lifted their cabinets slowly pulled out of the cracks.
Cost rises, logistics prices soar
The shortage of domestic export containers has caused the single-container market price to soar. As the order volume of container manufacturers increases, the cost of raw materials and labor has increased. In addition, the shortage of shipping space has further increased the cost of export containers for enterprises, increasing the logistics cost of the foreign trade industry and eroding the profits of export enterprises.
In fact, more than 90% of global containers are currently supplied by Chinese companies. According to the research report of Dongxing Securities, on the container production side, CIMC (CIMC, market share of 44%), Shanghai Universe (DFIC, market share of about 24%), and Xinhuachang (CXIC, market share About 13%), Singamas (about 3% market share) occupy most of the market share.
According to data released by the China Container Industry Association, there are three main types of container buyers. One is shipping companies, the other is container leasing companies, and the third is domestic railway and logistics companies . The third category accounts for a very low proportion, not exceeding all. 8% of annual container production and sales. The total production and sales of China's container manufacturers are between 2 million and 3 million TEU each year, and the storage of new containers accounts for 10%-20%.
1℃ reporters interviewed shipping companies and container manufacturing companies in many ways and learned that in the first five months of this year, China’s container manufacturers had almost no new orders. The pessimistic judgment of China has reduced liner shipping capacity and container procurement plans.
However, after June this year, my country's foreign trade quickly recovered. After the empty containers at the port were digested, the information of the lack of containers in the market was transmitted to the container manufacturers in mid-July, and orders continued to increase. "In September, our order volume has been scheduled to March next year." A person from CIMC Group who did not want to be named told 1℃ reporter.
"As a container equipment provider, we mainly produce according to shipping company orders. The shipping industry is currently booming and freight prices are rising. Therefore, shipowners and container leasing companies are also willing to purchase large quantities of containers." Liu Meng, a senior employee of a major domestic container manufacturer (Pseudonym) said.
Continued hot container production orders have caused the price of raw materials in the container supply chain to rise, including raw materials required for container production such as steel, wooden floors, and paint.
Insiders of Singamas Containers told 1℃ reporters that according to their understanding, steel, wood floors, and paint have all increased in varying degrees since the beginning of this year. "Compared with the off-season in the first half of this year, the price of steel has increased by about 10%, and the current average is more than 4,000 yuan per ton, and the wood floor has increased by 50% year-on-year." A relevant person in charge of a container manufacturer told 1℃ reporter.
The number of container floor sales is consistent with the trend of China's container export volume. In the raw material sector, the shortage of wood flooring is the most obvious, so prices have also increased significantly.
Kangxin New Material (600076.SH) is the only listed company in China that is mainly engaged in container floor panels. The company’s securities department confirmed that its finished product prices this year have exceeded the same period last year, "because of the increase in raw material and labor costs."
The main raw material of the container floor is logs. A domestic container bottom plate supplier told the 1℃ reporter that the current price of wood has increased significantly, and the purchase price of better poplar wood ranges from 800 to 1,000 yuan, which is more than 50% higher than when the market was normal. In the case of shortage, if the price is not increased, the timber merchant will not deliver the goods to the transaction."
The increase in supply chain costs has also driven up the selling prices of container products . A few days ago, a reporter from 1℃ asked CIMC insiders about the order status in the name of the leasing company. The salesperson of the other party said, “Orders are very slow now, and they need to wait until March next year to deliver them, mainly now (production orders). Don't go in."
The above-mentioned sales staff stated that the current order volume of the company is mainly unified at the head office level. “The selling price of 20-foot container (standard box) is now US$2,600, 40-foot container (high container) is US$4420, and 40-foot container (flat container) is 4210. Around the dollar."
Compared with last year, the price of new boxes between US$1600 and US$1700 has increased significantly. According to the research report of Dongxing Securities, in August this year, the price of a new container was only US$2,100.
"The epidemic is a double-edged sword, both an opportunity and a challenge." Recently, Lao Zhao said. Most of the foreign trade companies that have survived now have received many foreign orders, but at the same time they have encountered high freight costs caused by the shortage of containers and the shortage of space.
"Many of our company's customers, currently doing foreign trade orders, are not making enough money to pay for sea freight. Examples of this are everywhere. Even if they lose money, they still do it because they have a long-term vision and want to maintain good customers first. In the future, the freight rate will be lowered and then the profits will be made back." A business executive who has been a freight forwarder in East China for 10 years told 1℃ reporter.
I dare not rush to expand production after receiving orders in the first quarter of next year
On the evening of December 2, a 1℃ reporter came to the container production workshop of Dongguan South CIMC Logistics Equipment Manufacturing Co., Ltd. (hereinafter referred to as "South CIMC"), a subsidiary of CIMC Group, Fenggang Town, Dongguan City. A scene in full swing.
This is one of the largest container production bases in the country, and it is said that 1 out of every 10 containers in the world goes to sea here.
Worker Master Wang (pseudonym) had just left work and was riding a battery car to go home. He told the 1℃ reporter that the factory orders are currently full and he worked 11 hours that day. "Our factory is now operating in two shifts and is producing at full capacity," a person close to Southern CIMC told 1℃ reporter.
Since the third quarter of this year, as CIMC's order volume continues to increase, Master Wang has many colleagues who come to help temporarily. The 1℃ reporter learned during an interview with Southern CIMC that the plant has added many new temporary workers this year. “Most of them are labor dispatch employees, and the average daily salary of each person is 300 yuan, which is tens of thousands of yuan a month.” A labor dispatch company who recruited welders in a container factory of CIMC Group introduced.
"The main reason is that the container manufacturing industry is deeply affected by the shipping industry. When the market is good, the number of orders will increase, and if the production is at full capacity, there will be a shortage of manpower; when the market is not good, the number of orders will decrease, and manpower will be sufficient or even surplus. "The above-mentioned CIMC insider told the 1℃ reporter that many CIMC people (employees) still have fresh memories of the experience that factories were shut down during the financial crisis in 2008 and that they were looking forward to working at home.
On December 3, regarding the current shortage of containers and soaring freight rates in the field of foreign trade and logistics, the spokesperson of the Ministry of Commerce Gao Feng said that on the basis of the preliminary work, the Ministry of Commerce will continue to promote the increase of capacity and support the acceleration Container return transportation, improve operation efficiency, support container manufacturing enterprises to expand production capacity, and at the same time increase the intensity of market supervision, strive to stabilize market prices, and provide strong logistics support for the stable development of foreign trade.
Recently, the China Container Industry Association has also issued an initiative to "advocate container industry chain enterprises to actively invest in stabilizing foreign trade", and strive to improve the efficiency of international container turnover. Production-related enterprises should continue to improve production efficiency, continue to tap potential production capacity, and improve process equipment. Increase the number of workers, improve their labor skills, and make every effort to ensure that new box orders are delivered as soon as possible.
Affected by the current shipping situation, many large domestic container manufacturing companies are making every effort to ensure the delivery of new container orders as soon as possible to escort foreign trade exports, while also considering the future balance of supply and demand in the global container market.
In fact, the container manufacturing and sales industry and the development of the shipping industry share each other. Nowadays, aspects of container production enterprises are operating at full capacity ensure market supply; on the other hand below the epidemic, we still dare to expand production capacity.
People in the shipping industry predict that the shortage of containers will continue until the first quarter of 2021. Therefore, there are already large domestic container companies that dare not rush to take orders for the second quarter of next year.
"The main reason is that I dare not judge the future market prospects." Liu Meng told the 1℃ reporter that the current epidemic situation continues and container manufacturers are also worried that after receiving external orders, they cannot judge the future market development. If the order is received first next year Quarterly, the supply can be guaranteed, and the market will not be turbulent at the same time, so everyone hopes to have such a steady move.
"Now that the market is in short supply, we can completely launch capacity projects, purchase equipment, and let workers work overtime to produce, but in the long run, this will break the balance of supply and demand in the global container market." Liu Meng said that the demand for containers in global trade is only There are several million TEUs, once container overcapacity occurs, it will be a serious problem.
The current life span of containers is 10-15 years. "After the rapid one-time release of production capacity, what about next year or the next year? The development of the industrial chain still requires a long stream of water." Liu Meng told the 1℃ reporter.
The sky-high freight rates, and the hot availability of space and empty containers, are forcing freight forwarding logistics companies to charter ships and open shipping routes.
Last week, it was reported on Souhang.com that freight forwarding giant DSV Panalpina bypassed the shipping company and leased three ships and a batch of empty containers to open a new China-Denmark route. The latest news is that another freight logistics company giant DHL Global Forwarding also Is considering stepping in.
Dominique von Orelli, executive vice president of DHL Global Forwarding, confirmed to the media that the company is evaluating charter plans.
DHL considers chartering for customers
A large freight forwarding company considered direct control of ship assets, but actually entered an industry that is different from its core business in terms of operation and culture. On the other hand, it also shows how popular it is to ship containers from Asia to Europe and North America. And freight forwarders desperately provide customers with adequate services.
"There may be more freight forwarders to follow suit ." Anil Vitarana, former president of United Arab Shipping, said in a post on LinkedIn.
"If there is a continuing shortage of ship capacity and containers, and major logistics providers and 3PL find it feasible to use internal resources to integrate the economic benefits of the entire supply chain, shipping companies may regret the beginning of this trend." Vitarana wrote.
He added that the logistics provider/third-party logistics provider (3PL) team includes former executives of the shipping company and can help his current employer provide the services provided by the shipping company.
Vitarana also stated that shipping companies can also cooperate with 3PL to improve service capabilities. He pointed out that CMA CGM acquired CEVA Logistics in 2019 and Maersk included DAMCO in its integrator strategy, which has further promoted the supply chain solutions of shipping companies. Program.
But not all freight forwarders consider it necessary to provide shipping services to customers.
Two other large freight forwarders, Kuehne + Nagel and DB Schenker, said that although the container market is extremely tight, they do not think such a move is necessary.
Freight forwarding giant Kuehne + Nagel expressed confidence in products based on digital solutions and cooperative relationships with shipping companies, able to provide services to customers, and will continue to provide leasing services for project cargo, rather than container customers.
DB Schenker does not believe that chartering is one of the solutions for capacity. The current shortage of ships and chartering costs have also increased. Alphaliner, a maritime analysis agency, pointed out in mid-November that most ship charters are tight. The daily charter price of 3,000-3,500 TEU ships is US$18,000, an increase of US$2,000 from the end of October.
Thorsten Meincke, DB Schenker's board member responsible for air and ocean freight, said that the resources needed to charter and manage ships are often underestimated, which will distract attention from the reliable and robust services provided by freight forwarders.
"Once you have ship assets, you have to fill them up. This will become your focus, rather than providing customers with the best solutions," Meincke said. "The current challenge facing the maritime market is largely the shortage of containers, not just the space of ships."
Indeed, other sources also believe that despite Maersk’s efforts to redefine its business model by integrating traditional shipping and freight functions, there are still huge differences in operations and culture between freight forwarders and shipping companies.
Ship asset owners must keep their ships full and require functions and costs such as ship planning and container repositioning, and freight forwarders usually rarely consider these daily affairs.
In addition, the source said that the shipping capacity chartered by DSV is small, and its cost is far from competitive with ships of 20,000 TEU or more that travel between Asia and Europe. This is why freight forwarding and shipping are almost always in different organizations, even in larger shipping companies.
In recent months, the container market has experienced extreme conditions. High freight rates and container shortages have plagued the market and will continue for some time. In addition to the short plug of the reefer, the import and export of the reefer will also be a new challenge.
Large companies and logistics companies that need to ship refrigerated goods must be prepared, and shipping companies have announced that they will stop receiving freezers.
It is reported that the shipping company Hapag-Lloyd announced that it will suspend all 40' freezer bookings in Germany, Austria, Switzerland, Hungary and the Czech Republic until the end of December 2020.
"Our goal is to support all confirmed export orders, but reservations may be cancelled for individual cases. We will try our best to provide all customers with the best service, but we expect that the situation will remain very tense in the coming weeks." Herb Roth wrote in a statement.
"This once again shows that the market is facing severe container equipment challenges. This is a prominent problem that affects the supply chain in many places, not just the supply chain in Asia." Shipping analyst and chief executive of Sea-Intelligence Consulting Officer Lars Jensen said.
In addition to Europe, Hapag-Lloyd announced on December 3 that the port was congested due to stricter customs inspection and disinfection of imported food entering Huangpu. From now on, we will temporarily stop accepting reservations for refrigerated containers entering Huangpu Port in China until further notice.
In view of the above situation, customers are kindly requested to provide written confirmation as soon as possible. You can have the following options:
(1) If circumstances permit, accept delivery at the current port of discharge;
(2) Transfer your refrigerated container to another port/destination;
(3) Transport your refrigerated container back to the port of departure;
(4) If there is no instruction from the customer, Hapag-Lloyd reserves the right to make all necessary arrangements.
Please note that for any of the above options, all additional costs, risks and liabilities related to storage or transportation of the goods after unloading will be borne by the owner of the goods.
At the same time, Hapag-Lloyd also announced that it will temporarily stop receiving orders for imported reefer containers from Busan, South Korea to Tianjin, China , with immediate effect.
In addition, my country has recently increased its inspection of imported refrigerated goods, making the inspection of refrigerated goods more stringent and time-consuming. Ports are facing problems such as slow pickup of containers and port congestion.
Ocean Network ONE stated in the announcement that it will suspend the delivery of refrigerated containers to Huangpu Port from November 26. In addition to the latest announcement of ONE, Xiamen, Fuzhou and Fuqing have also suspended receiving imported refrigerated containers.
ONE stated that due to the stricter inspection and disinfection requirements imposed by customs on refrigerated containers imported into Xiamen/Fuzhou/Fuqing, the delivery of freezer containers has been slow and is facing congestion.
In view of this situation, from the date of shipment on December 8, 2020, ONE will stop accepting all orders for refrigerated goods destined for Fuzhou and Fuqing, China , until further notice.
Starting from the loading date on December 9, 2020, ONE will stop accepting all reservations for refrigerated cargo to Xiamen, China or for transshipment via Xiamen , until further notice.
▲ONE announcement
For containers in transit, ONE strongly recommends that customers consider changing the destination to another port, especially for time-sensitive goods, such as fresh and refrigerated goods.
For refrigerated containers that have been transshipped to Xiamen, or refrigerated containers that have been detained at the transshipment port for further transportation to Xiamen, please note that all related expenses will be borne by the consignee and paid upon delivery.
For containers that have been transshipped to Fuzhou/Fuqing or detained at a transit port, once the Fuzhou/Fuqing feeder space is available, a specific surcharge will be charged at the time of loading.
The US Federal Maritime Commission (FMC) threatened to use all its possible powers to overturn the decision of international shipping companies to abandon the export of American agricultural products and relocate empty containers instead.
The shortage of containers and market forces have caused some shipping companies to cut the container quotas of traditional American exporters to alleviate some serious problems in the supply chain. This has had a huge impact on US agricultural exports. Reports say that some cargo owners’ quotas have been reduced from 300 containers per month to three.
Under the vigorous lobbying of the U.S. Agricultural Transportation Union and its partners, FMC announced that it would investigate these measures.
"Some shipping companies have already stated that they will no longer deploy empty containers to inland agricultural areas of the United States. Instead, they are speeding up the delivery of empty containers back to Asia." FMC Chairman Michael Khouri said at the Global Maritime Conference.
"This approach is to keep U.S. agricultural exports out of the global market. We are investigating and possible response measures, including reviewing whether the actions of these shipping companies are in full compliance with the Shipping Act, and more specifically, the Act. "Prohibited Acts" clauses in the "Prohibited Acts"," he said.
At the end of October, the shipping company Hapag-Lloyd has decided to suspend export bookings for soybeans and other agricultural products from the United States in order to return empty containers to Asia to load imported goods from the United States instead of shipping containers to the inland United States.
Earlier this month, the Special Soybean and Grain Alliance (SSGA), a US agricultural transportation organization, stated that the lack of containers and its members’ inability to load exported goods is prompting Asian customers to investigate other food buyers.
SSGA Executive Director Eric Wenberg said: "Our members have heard from Asian customers that they doubt that the United States and its agricultural exporters will continue to be reliable suppliers based on the difficulties of today's multimodal transportation."
"Marine shipping companies need to work with us to solve these transportation problems and ship our goods back to Asian ports. Otherwise, the United States has been a reputation for exporting high-quality food to foreign customers and we must take action." He added.
Magic 2020, the shipping industry has breaking news every day, and it always affects the hearts of foreign trade forwarders.
Today, the Moments of Friends screened the video of the driver grabbing the box. Truck drivers flocked to "queue" to pick up the cabinet. You earn and I grab one box, and they are almost "fighting".
This is a real response. Even if the shipping company normally releases the cabin, there is no guarantee that there will be boxes. It is difficult to find a box in China.
Another heavy news is that CMA CGM will directly stop accepting bookings from Asia to Europe in the next three weeks, and temporarily stop bookings on the Asia-Northern Europe route in the 49th, 50th and 51st weeks. The European route has basically ended this year. Booking.
In recent months, due to the uneven recovery of the global economy, the rebound of epidemics in many countries, and the arrival of traditional transportation seasons such as Christmas and New Year, congestion has occurred in many European and American ports, but many domestic ports are extremely short of containers.
Under such circumstances, many large shipping companies impose additional charges such as congestion surcharges, peak season surcharges, and shortage of containers.
Following the further surge in freight rates on the European and Mediterranean routes last week, data shows that this week, China’s export container shipping market performed stably, and transportation demand remained stable. The freight rates on most shipping routes rose, which led to a rise in the composite index.
The largest increase was the year-on-year growth rate in Northern Europe of 196.8%, the year-on-year growth rate in the Mediterranean Sea was 209.2%, and the year-on-year growth rates in the West and East of the United States were 161.6% and 78.2%, respectively. 390.5%.
Shanghai Export Container Freight Index
As Christmas approaches, shippers and their freight forwarders in Europe and North America continue to generally face the problems of container shortages, port congestion, declining capacity and soaring freight rates. Many people in the industry are talking about the current "peak season" in the container industry. "When will it end?
According to the latest analysis conducted by Lar Jensen, CEO of shipping analysis agency SeaIntelligence, on behalf of the Baltic Exchange, the answer is likely to be around the Lunar New Year holiday in February, because the options available to supply chain stakeholders are very limited.
Chinese New Year will mark the end of the "peak season" of the container industry
The root cause of the current problem is the unexpected demand for container cargo due to the global social blockade.
Jensen said that there are three key issues in meeting higher levels of demand: container, ship and port capacity constraints. He wrote: "If demand decreases, the problem will be resolved immediately."
"However, shipping companies may show their determination to reduce capacity again in order to cope with the downward trend in demand. This means that very high spot freight rates will drop, and new equipment available surcharges will disappear, but the interest rate will not It's too likely to crash." He added.
In these strange years, it is difficult for the industry to reach a consensus, but there are few signs that consumer demand will decline in the short term.
Jensen said that for many shippers and freight forwarders, the most pressing problem is the serious shortage of containers, but as China's container manufacturing plants are in full production, this problem may be alleviated before the Chinese New Year on February 12.
"This problem can be solved within a few months." He said: "The solution is that the empty containers are shipped back from Europe and North America faster, coupled with the full work of China's container factories... The current situation can be After the Spring Festival, it ended peacefully."
However, it will take longer to solve the problem of global ship and port capacity. When the capacity is insufficient, the traditional approach of shipping companies is to turn to the leasing market. However, due to the surge in demand, only a few boats are available for hire.
"As a result, the time scale for increasing capacity has changed from weeks to years now, because it will require the construction of new ships. Moreover, since the peak demand may be temporary, this solution will not help solve the problem." He wrote.
Another option for shipping companies is to increase their ship speed. Faster service can free up the structural capabilities of the shipping group, although this does increase costs.
"In general, considering the optimization of fuel, when modifying or building these ships, they cannot sail as fast as ten years ago, but there is still a certain degree of additional capacity that needs to be activated. However, this also comes at a cost. , Including the sharp increase in carbon emissions."
Finally, there is the issue of port inventory, which he admits is almost powerless in the short term.
"The surge in demand and the increase in ship arrivals have not only affected the number of containers that the port can handle, but also the number of ships that can be berthed and served."
"In addition, the surge in demand has caused larger ships to arrive with more cargo than originally planned, which means longer berth stays, a chain reaction, and subsequent ships will be delayed."
"The expansion of the port's capacity can only be measured in a few years at most. In some areas, large expansion projects can take up to 10 years."
After a further surge last week, the spot freight rate for containers from Asia to Northern Europe is now 130% higher than the beginning of the year, up 200% year-on-year. The Far East-Europe trade route is still under tremendous pressure, and the freight rate will continue to rise further.
In the current peak season, the influx of imported goods from Asia into the United States does not seem to have eased. Los Angeles and Long Beach are still in a state of collapse and paralysis. There are as many as 20 ships lining up near the west coast, waiting for the empty space in LA Long Beach Port to unload.
Australian ports remain congested, with more than 75,000 teu stranded in Sydney.
Freight rates in the Asian intra-route market remained stable, but from the same period last year, freight rates across Southeast Asia have increased by a staggering 390.5%.
Europe-to-land route : The North European spot freight rate of the Shanghai Container Freight Index (SCFI) just released by the Shanghai Shipping Exchange increased by 13.5% to US$2,374 per TEU, and the Mediterranean freight rate increased by US$165 to US$2384, spot The freight rate increased by 7.4%. It is worth noting that the year-on-year growth rate in Northern Europe was 196.8%, and the year-on-year growth rate in the Mediterranean was 209.2%. But in fact, the market freight rate is much higher than this.
A Shanghai-based non-vessel carrier said that several shipping companies are currently offering more than US$6,000/40-foot container to Rotterdam and more than US$8,000/40-foot container to the UK.
A freight forwarder in China stated that the carriers on this route are now purely focused on maximizing freight revenue, regardless of all other agreements. He said: "Shipping companies only give priority to higher-priced spaces-whoever pays more will get the space."
Christoph Baumeister, senior trade manager for Flexport Asia/ISC-Europe, said the situation for Asian shippers was “worse than week after week”. He added: "The Far East-Northern Europe/Southern Europe trade route is still under tremendous pressure, and freight rates will rise further this week."
Moreover, according to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe of three months or less is 200% higher than a year ago, at $4,831 per 40 feet.
Although Xeneta’s long-term contract freight data showed an increase of 28% to US$1,648 per 40 feet, it pointed out that despite the peak contract season, few deals have been concluded because shippers and carriers think it’s not the time.
In the trans-Pacific region , the spot freight rate remained basically unchanged last week and stabilized at a record level. According to SCFI data, the spot price on the west coast of the United States rose by US$68 to US$3947 per 40 feet, while the port price on the east coast fell by US$8. To $4,700 per 40 feet. The year-on-year growth rates of the West Coast and East Coast of the United States were 161.6% and 78.2%, respectively.
Since mid-September, due to the intervention of Chinese regulatory agencies, the spot market on this route has remained stable, and shipping companies hope to obtain guaranteed income from their premiums.
As the influx of merchandise imports from Asia into the United States during the peak season did not seem to ease, the Port of Los Angeles data confirmed that the port's imports in the 50th and 51st weeks increased by 37% and 54% year-on-year respectively.
The continued growth of imports has put tremendous pressure on the San Pedro Bay ports in Los Angeles and Long Beach. Freightos Chief Marketing Officer Eytan Buchman said: "There are reports that as many as 20 ships are lining up near the west coast, waiting for the unloading of empty spaces in the Port of Long Beach, LA. Retailers are eager to put these goods on the shelves before the holidays."
As for Australia and New Zealand routes , with the gradual improvement of the epidemic situation and the continuous growth of transportation demand during the traditional peak season, the market freight rate has increased. According to the SCFI index, the freight rate (sea freight and ocean freight surcharge) for exports from Shanghai to the basic port of Australia and New Zealand was US$2490/TEU, up 2.5% from the previous period. But the Australian shipping business is currently in a "state that has never been so bad."
The continued "chaos" in the Australian container supply chain will mean that some retailers' shelves will be empty during Christmas.
The impact of supply chain delays caused by the Maritime Union of Australia (MUA) strike in early October continues. The shipping company stated that the disruption of shipping schedules caused a backlog of "8 to 10 weeks" delays (8 weeks of delay means that retailers will not have inventory "until January of next year"), but the union denies that this is the reason. Rather, it points to the increase in demand during the peak season.
According to the Freight and Trade Alliance (F&TA), trade imbalances, resulting in a large surplus of empty containers and lack of storage areas for storing these containers, are still the main problems hindering the supply chain. F&TA Director Paul Zalai said: “Currently, it is estimated that the imbalance of containers is 75,000 teu, which is stranded in Sydney’s empty container yard and operator’s warehouse. The surplus of empty containers will cause Sydney’s logistics to fall from the current congestion state to an unsolvable situation. deadlock."
The peak season demand has increased the spot freight rate from China to Melbourne to US$2490, compared with US$1648 in mid-October. Paul Zalai believes that the country’s shipping industry has “never seen such a bad situation.” He explained: “Our ports are congested, services are limited, freight prices are at record highs, detention, congestion and terminal access surcharges continue to increase. "At the same time, similar shipping delays have also affected importers in the Tasman region. Due to the chain reaction caused by port congestion in Australia, the Port of Auckland in New Zealand experienced delays this year.
The market freight rates of intra-Asia routes also remained stable last week, but from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%.
Although these are eye-catching figures, it is important not to forget that 65% to 75% of all goods are transported on the basis of contract freight rates rather than spot market freight rates. However, due to the exhaustion of the number of contracts (many contracts are in unexpected periods when consumer demand is out of control) the rest tends to the spot freight market. When contract negotiations restart next year, the strong bull market will also benefit shipping companies.
Andy Lane of CTI Consulting in Singapore commented: “There is still one month before the new Asian-European contract. This is under the background of record-breaking spot freight rates. Prices may rise sharply, which will have a real impact on the market."
Against the backdrop of the global raging COVID-19 pandemic, this year's global container shipping industry seems to be sitting on a magical "seesaw". On one side, there is a shortage of containers and high freight rates, and the other is port congestion . The two issues alternate across oceans and continents, torturing the fragile nerves of cargo owners.
However, although industry analysts sing the recovery of the operating industry, industry insiders are still cautious about the "boom" that occurred during the epidemic, especially after the middle of next year, the market supply and demand trend is still like a fog, and there are still larger ones. Uncertainty.
The problem of shortage of containers has attracted the attention of the Ministry of Commerce. On December 3, the spokesperson of the Ministry of Commerce pointed out that, on the basis of the preliminary work, the Ministry of Commerce will continue to promote the increase of transportation capacity, support the acceleration of container return, improve operation efficiency, support container manufacturers to expand production capacity, and increase The intensity of market supervision, efforts to stabilize market prices, provide strong logistics support for the steady development of foreign trade.
The epidemic caused port failure
The problem of container shortages is happening alternately across the Pacific and the Atlantic this year.
According to Bloomberg data, in the first quarter of this year, European and American ports such as Hamburg in Germany, Rotterdam in the Netherlands, Antwerp in Belgium, and Long Beach and Los Angeles in the United States have all fallen into a state of extreme shortage of containers. The port container holdings have reached a record low, while Chinese ports are stranded in a large number of containers. Waiting for quarantine. In the third quarter, the situation was reversed. The overseas epidemic was severe and the port was understaffed. According to statistics, the Port of Sydney, Australia had piled up at least 50,000 TEUs of containers to be processed. Many ports were charged with congestion charges. Hard to find" status.
Generally speaking, problems such as shortage of containers and port congestion are routine problems in the industry, which are easy to appear in peak seasons, and are also related to port processing efficiency. However, the failure of port operations caused by the epidemic has undoubtedly extended the loading and unloading time of containers.
According to a reporter from the Securities Times, due to the need for epidemic prevention, the Port of Los Angeles has temporarily reduced the number of dockers and port personnel by about one-third, and the loading and unloading of ships has been greatly affected. Due to the continuing effects of shortages of equipment and prolonged loading and unloading time in ports, a large number of imported containers have been backlogged in European and American ports, congested terminals and poor container turnover, which has hindered cargo transportation.
The global container shortage difference can be seen from the Container Availability Index (Container Availability Index) released by the container source traceability platform xChang: In July, the supply of 40-foot containers at the Port of Los Angeles was insufficient; by the end of September, the port’s container availability index had increased by 4 times. Oversupply; since September, Qingdao Port (6.110, -0.02, -0.33%) usable containers have begun to decline, and by October the usable index of 40-foot containers has fallen by half, and 20-foot containers have also been in short supply.
Strong Asian exports become an important driving force for recovery
Looking at the whole year, the geographical imbalance of the shortage of containers is more significant, which is directly related to the timing of the outbreak.
According to data provided by the United Nations Conference on Trade and Development (UNCTAD), in mid-March, the number of global container ship arrivals began to fall below the level of 2019 and did not start to recover until the third week of June. This timetable basically coincides with the World Health Organization’s listing of the new crown pneumonia as a pandemic and the deteriorating epidemic in Europe and the United States. On the other hand, the number of container ship arrivals at Chinese ports has gradually recovered since June, which is also in line with China’s The lock release time corresponds to that.
In terms of absolute volume comparison, most regions started to recover from the third quarter, but globally, the port container ship berthing volume in early August was still 3% lower than the same period last year, and North America and Europe were 16.3% lower than the same period last year. And 13.2%. In contrast, the number of port calls in China (including Hong Kong) has exceeded the level of last year, an increase of 4.1%.
China's shipping import and export took the lead in the recovery. The fundamental factor is that the domestic epidemic prevention and control has achieved major results, and the production side has taken the lead in recovery, effectively making up for the global supply gap caused by the impact of the epidemic, and also supporting the continuous growth of exports.
China Customs statistics show that in the first and second quarters of this year, China’s import and export growth rates were -6.5% and -0.2%, respectively. They were reversed in the third quarter, with a year-on-year growth of 7.5%. The total value of imports and exports reached 8.88 trillion yuan. Stable, the cumulative growth rate turned negative to positive. It is worth noting that due to the changes in lifestyles caused by the epidemic, the export of notebook computers and home appliances has increased; the export of epidemic prevention materials has also risen rapidly. The export of textiles including masks reached 828.78 billion yuan, an increase of 37.5%; medical materials and medicines, The export of medical instruments and equipment increased by 21.8% and 48.2% respectively.
According to information provided by UNCTAD to a reporter from the Securities Times, although China was the first country to be affected by the epidemic, in the first quarter, China’s overseas trade, transportation and exports were not interrupted, so the transportation at Chinese ports remained unobstructed; on the contrary; It was in the second quarter that due to the escalating blockades of various countries, economic activities were restricted, and the transportation of logistics personnel was blocked, leading to a sharp drop in imports from various countries. At this time, the impact on port operations increased significantly. Subsequently, the epidemic situation in Europe and the United States became more and more serious, and the key figures of the centralized transportation industry also bottomed out in the middle of the year. At the end of May, the World Ports Association pointed out that the number of container ships calling at about 45% worldwide dropped by 5% to 25%, and most of the cancelled ships came from the Far East route.
According to data from Alphaliner, an international shipping consulting and analysis agency, the new crown pneumonia epidemic in the first half of the year has reduced the chartering revenue of large container ships by half. Starting in the third quarter, global shipping capacity has recovered, a year-on-year increase of 2.8%, reaching 123 million TEUs, strong exports from Asia Become an important driving force for recovery.
In terms of the capital market, the share prices of listed companies in the A-share centralized transportation industry have also started in June and have risen significantly in the third quarter. CIMC (14.830, 0.20, 1.37%) and COSCO SHIPPING Holdings (9.680, 0.06, 0.62%) The performance of related listed companies also increased substantially in the third quarter.
Strong demand for containers is expected to continue into the first quarter of next year
Returning to the shipping industry itself, many shipping companies around the world took the initiative to suspend shipping under the influence of the epidemic in the first half of this year.
As the world’s top five airlines, Rolf Habben Jansen, CEO of Hapag-Lloyd, pointed out at the third-quarter performance briefing that in April this year, demand suddenly dropped by 20% and lost 200 million U.S. dollars per month, so it must be suspended to reduce 60% of the cost. He pointed out: "The market at this stage is driven by demand, not by inventory replenishment. The entire market is trying to get empty containers back to where they are needed."
In terms of container freight rates, the Shanghai Export Container Freight Index (SCFI) and China Export Container Freight Index (CCFI) released by the Shanghai Shipping Exchange have set new highs. On November 27, CCFI quoted 1198.72 points, an increase of 4.6% over the previous week; SCFI quoted 2048.27 points, an increase of 109.95 points over the previous week. Under the strong demand, the price of offshore export containers also rose sharply. On November 27, the export container price of Southeast Asia routes was quoted at 995.67 points, an increase of nearly 20% over the previous week.
According to the analysis of China Securities Regulatory Commission, the supply side has not launched large-scale capacity at this stage, while the demand side has continued to grow rapidly, which will become the fundamental reason for the increase in freight rates in the transportation industry. Although the epidemic has led to pessimistic global economic expectations, in fact, the European and American manufacturing PMI index is still in the expansion range driven by policy, which provides economic fundamental support for the increase in freight rates.
However, someone from a shipping company pointed out to a reporter from the Securities Times that in the last 10 to 12 years, the shipping industry has not made any money or even recovered the cost of capital; long-term low-price competition is difficult to promote the healthy development of the industry.
So, can the epidemic promote the long-term recovery of the industry? Most people in the industry are cautious about this.
Rolf Habben Jansen pointed out that the current market is very, very strong, "but it is illogical to think that this situation will continue in the next few years." He expects that the situation will change in the next three or four quarters, and the company needs to be prepared to act quickly.
Container shipping companies and leasing companies also told reporters that the outlook is difficult to predict. Although the strong demand for containers is expected to continue into the first quarter of next year, after the middle of next year, there is still greater uncertainty in the market supply and demand trends. If European and American countries are still under lockdown or vaccine research and development and promotion fall short of expectations, and the macro economy falls into a sustained recession, the good growth momentum of the container transportation industry may not be able to maintain.
