The trend of container sea freight in the second half of 2024
??????Container Shortage, Space Shortage, Continuous Price Increases! The First Wave of Shipping Price Hikes in 2024 is Coming
"By the end of May, most slots are already gone. Currently, there is demand but no supply," a senior manager from a large freight forwarding company told Yicai Global. A large number of containers are "wandering outside," leading to a severe shortage at ports. The situation of "one slot being hard to find" has reappeared. "In early May, the shipping rate for the US line was about $4,100 per container (40-foot container), and it has already increased twice, each time by about $1,000!" The price increase will continue, and it is expected to soar to over $5,000 by late May. The shipping market typically has distinct off-peak and peak seasons, with freight rate increases generally occurring during peak seasons.
Recently, however, the industry has seen wave after wave of price increases even during the off-season. It has been learned that major shipping companies like Maersk, CMA CGM, and Hapag-Lloyd have all issued price increase notices and have begun issuing new price adjustment notifications for June...
Container Shortage, Space Shortage, and Crazy Price Increases
Make Freight Forwarders and Foreign Trade Enterprises Sigh
The madness behind this wave is still attributed to the imbalance of the supply and demand "scale"—on one end is the tight shipping capacity supply, and on the other is the rebound in market demand.
The reasons for tight supply are manifold. The most significant is the ongoing impact of the Red Sea situation causing diversions. The Freightos agency believes that container ship diversions around the Cape of Good Hope have tightened the capacity of large shipping networks, even affecting the rates of routes not passing through the Suez Canal. Since the beginning of this year, the tense situation in the Red Sea has forced almost all container ships to abandon the Suez Canal route and instead divert around the Cape of Good Hope. This corresponds to a longer voyage time, about two weeks longer than before, leaving many ships and containers floating at sea.
The ports are the most direct "barometer" of foreign trade. This year, many ports have reported positive news with increasing throughput and high slot utilization rates. Data from Tianjin Port Group shows that in the first quarter, Tianjin Port handled 114 million tons of cargo, a year-on-year increase of 4.71%, and completed 5.047 million TEUs, a year-on-year increase of 9.09%, setting a record high for first-quarter throughput. Lianyungang Port handled 76.35 million tons of cargo in the first quarter, a year-on-year increase of 9.8%, and completed 1.459 million TEUs, a year-on-year increase of 15.5%.
"Shipping companies' price increases indeed reflect a certain degree of recovery in global foreign trade," many industry insiders said. With China's export trade structure becoming more diversified, the trade growth rate of BRICS countries and Belt and Road Initiative countries is remarkable. Currently, the circulation of containers is returning to normal, the volume of goods being shipped is gradually recovering, and there are signs of further improvement. The busy ports reflect the spring breeze blowing from the global market, felt particularly strongly by major foreign trade provinces. Guangdong, Jiangsu, and Zhejiang, the three major foreign trade provinces, have import and export scales firmly among the top in the country. In the first quarter, their import and export growth rates were significantly higher than the national average (5%). Additionally, high-tech mechanical and electronic products dominate exports in these provinces.
As a reminder, major shipping companies have already begun issuing price increase notices for June, continuing the trend of price hikes. It is expected that freight rates will continue to rise rather than fall. Shippers and freight forwarders planning to ship goods should plan their shipments as early as possible to avoid disruptions.
????As a bag manufacturer, we will and willing to take several steps to help our customers cope with the issues of space shortages, container shortages, and rising shipping costs:
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?Provide Flexible Shipping Options: Work with multiple freight forwarders and shipping companies to offer various shipping solutions. This can help secure space and containers even when availability is low.
?Plan Ahead and Communicate Early: Encourage customers to place orders and arrange shipments well in advance. This proactive approach can help mitigate the impact of sudden rate increases and space shortages.
?Consolidate Shipments: Offer to consolidate smaller orders into larger shipments. This can maximize the use of available container space and potentially lower shipping costs per unit.
?Optimize Packaging: Review and optimize packaging to reduce the volume and weight of shipments. More efficient packaging can help fit more products into a single container, reducing overall shipping costs.
?Flexible Lead Times: Provide flexibility in production and lead times to accommodate changes in shipping schedules. This can help customers avoid peak times and higher shipping rates.
?Stay Informed and Update Customers: Keep abreast of the latest developments in the shipping industry and inform customers promptly. Providing timely updates can help customers adjust their logistics plans accordingly.
?Explore Alternative Shipping Routes: Investigate and suggest alternative shipping routes or methods, such as air freight for urgent shipments or less commonly used sea routes that might have more availability.
?Collaborate on Inventory Management: Work with customers to better manage their inventory levels, possibly by increasing buffer stocks during periods of high shipping uncertainty.
?Negotiate with Shipping Partners: Leverage relationships with shipping companies to negotiate better rates or secure space on behalf of your customers.
?Offer Warehousing Solutions: If feasible, offer temporary warehousing solutions to store products until shipping conditions improve. This can help customers avoid high storage fees at ports.
By implementing these strategies, we can provide added value to our customers, helping them navigate the current challenges in the shipping industry effectively.
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