Container freight rates on Asia-Europe routes have increased by 10 times compared with last year!
Due to the combined effect of strong shipping demand, port delays and container shortages, the spot freight rate of containers continued to rise and reached new highs.
Part of the reason for the price increase is the shortage of ships, as most of the capacity has been deployed on the fiery trans-Pacific and Asia-Europe trade routes.
Nevertheless, there is still no downward trend in freight rates from Asia to Northern Europe.
Container freight rates on Asia-Europe routes hit a record high
On May 17, Platts Container Rate 1 showed that the container freight rate from North Asia to the Nordic continent soared to USD 12,000/FEU, up USD 1,500/FEU from the previous week, and USD 1,300/FEU estimated on this route a year ago. Shows a nearly 10-fold increase.
On May 11th, a freight forwarder posted in Moments that the container freight rate on North Africa routes will soon exceed US$17,500, rising by US$500 in just one week, which is simply "unexpected in a century." The price of a 40-inch container on the Middle East route was the peak last year. No more than 3000 US dollars, this week has exceeded 8300 US dollars.
The latest increase in freight rates is due to the fact that demand on major global routes continues to exceed supply. Compared with the beginning of the new crown virus pandemic, there are fewer empty containers in the shipping industry. This is mainly because once the containers are unloaded from the ship, the containers are returned to the port due to shortage of dock workers, poor inland transportation, and epidemics. The time spent has greatly increased.
Some containers take 4 weeks to return to the port after unloading, but it only takes about 7 to 10 days in early 2020.
In addition, the ports of Los Angeles and Long Beach in the United States are heavily congested. 85% of ships need to drop anchor for at least 8 days before they can operate. Container cargo can stay at the terminal for up to 2 months. A relevant person at Maersk said, “It usually only takes 14 days to ship goods from Shanghai to Los Angeles, but now it takes 33 days. The sailing time is the same, but the waiting time for unloading is twice as long as before.”
Not only US ports, some ships from Asia to Europe have also been delayed, unable to reach their destinations as scheduled. Congestion has caused delays in places such as Port Klang in Malaysia, Port Rotterdam in the Netherlands, Piraeus Port in Greece and Southampton Port in the United Kingdom, up to six days.
The global shipping industry encounters another "wave of crit"!
With the worsening of the new crown pneumonia epidemic in India, Singapore, as a shipping hub, has recently been forced to ban the entry of seafarers from India and other South Asian countries. Seafarer rotation has once again fallen into a crisis, making the already tight global shipping industry worse.
Recently, a seafarer company headquartered in Singapore stated that there were only occasional cases of infection on ships in the past, but now the situation is that the rapid spread of the new crown virus on the entire ship often means that these ships are no longer navigable.
Wu Peiyuan, an associate professor at the National University of Singapore Business School, said: This will affect the schedule of freighters and also have an impact on the supply chain. This will inevitably lead to an increase in consumer product prices. The reason is that the entire shipping industry has been disrupted, which may lead to inflation. Continue to go up.
United Nations data shows that 80% of the world's trade relies on shipping, and 240,000 of the world’s 1.6 million seafarers are from India. Entry restrictions have undoubtedly further aggravated the impact on the shipping industry. In the short term, this situation is difficult to alleviate. According to industry insiders, the blockage of the Suez Canal in March is not worth mentioning compared with the supply chain interruption caused by the inability of crew to change shifts.
Faced with a severe situation, shipping agencies and maritime experts have called for vaccinating crew members as soon as possible to be the most feasible way to deal with this crisis.
Espen Poulsen, President of the International Chamber of Shipping: For us, the most critical first priority now is to persuade the government departments of various countries to give priority to vaccinating relevant maritime workers as soon as possible.