Since the outbreak of the epidemic, the shipping industry has experienced unprecedented challenges. Port congestion, shortage of containers and dumping of containers, difficulty in finding a container, skyrocketing freight rates, and skyrocketing increases in major shipping routes. After experiencing the previous drop in freight rates on some routes, many foreign traders are still looking forward to further drops in freight rates….
Shipping costs in Southeast Asia continue to rise, with the highest surge exceeding 5 times
The Southeast Asian market can be said to be undergoing a sudden change. Since October, the shipping market in Southeast Asia has taken over the U.S. line and the freight rates have continued to rise. The freight rates at almost all major ports in Southeast Asia have generally increased by nearly one or two times in just one month!
Recently, taking the port from South China to Ho Chi Minh City as an example, from the end of October to the beginning of December, within one month, the shipping fee for a 40-foot container has skyrocketed from around US$500 to US$2,000 to US$2,500, with the highest increase being as much as five times. !
It is understood that the recent surge in freight rates in Southeast Asia may be related to the cancellation of many flights in Southeast Asia, the lack of sailings, and congestion at some Southeast Asian ports. In addition, the epidemic situation in Southeast Asia has slowed down in the past two months, the requirements for epidemic prevention measures for manufacturing companies have begun to be relaxed, and factories have resumed work and manufacturing has recovered, resulting in strong demand for shipping and air transport capacity in the region!
A combination of various reasons ultimately promoted the collective rise of the Southeast Asian shipping market this time!
In view of the current market conditions in Southeast Asia, where space is still tight and freight rates continue to rise, many freight forwarders have issued early warnings to customers exporting to the Southeast Asian market. No matter what the earliest market price is, they can leave this week because the highest price this week is next week. the lowest price.
Tight shipping capacity and strong demand have not only caused major shipping companies to continue to increase freight rates, but some shipping companies have quickly shifted container shipping capacity from the congested West Coast to the Asian line!
Long-term contract shipping rates are soaring! Yang Ming said that European long-term contract prices will increase 2-3 times in 2022
With the impact of the epidemic and global supply chain congestion, the situation in the shipping market has become increasingly tense. Recently, shipping data analysis company Xeneta said that carriers hoping to lock in long-term shipping contracts will face severe price shocks this month.
According to Xeneta statistics, in November alone, the average global long-term contract shipping price increased by 16%, with a cumulative year-on-year increase of 121%. This follows a sharp rise in long-term freight rates on all major shipping routes in July, reaching a record 28%.
Soaring freight rates have brought huge profits to the shipping industry, with many companies doubling (or even tripling) their revenue year-on-year. The shipping industry made more than $100 billion in profits in the first nine months of this year alone. This is more than the total revenue of the entire industry in the past 5 years.
Yang Ming Shipping recently held a performance briefing, and the industry stated that Yang Ming Shipping is optimistic about next year’s market and has begun negotiating with customers for next year’s European line long-term contracts. It is expected that the price of the new long-term contracts is expected to increase by 2 to 3 times.
Yang Ming Shipping recently held a performance briefing and stated that due to the impact of port congestion and labor shortages this year, cargo volume in the first three quarters fell by 10% compared with the same period last year to 3.31 million TEU. However, due to high freight rates, the cumulative profit in the first three quarters was still the highest in history. A new high, reaching NT$109.887 billion (approximately RMB 25.209 billion). Among them, the largest revenue contribution is from the European line, accounting for 44%, followed by the American line at 32% and the Asian line at 24% (including the Middle East, South America, and Australia).
Looking forward to the future, Yang Ming Shipping said that contracts usually last about one year. The current European line spot freight rate fluctuates at a high level of US$13,000-15,000/FEU, which is much higher than the contract price, with a price difference of 2 to 4 times.
Yang Ming Shipping has successively negotiated with customers for next year’s long-term contracts, and believes that “it should be no problem to increase the long-term contract freight rate by 2 to 3 times in the new year.” Nowadays, in the peak season, due to multiple adverse factors such as serious port congestion and unstable shipping schedules, the shipping situation is still tense.
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