Since the beginning of this year, my country’s foreign trade imports and exports have maintained growth, but the continued high shipping prices have put considerable pressure on foreign trade companies. It had just fallen back from its historical high not long ago, but with the recovery of production and consumption in Southeast Asia, it is heating up again.
Increased demand, shipping rates in Southeast Asia skyrocketed
Since October, freight rates in Southeast Asia’s shipping market have continued to rise.
A foreign trade merchant in Yiwu said that the current price of containers shipped from China to Indonesia has risen from the original US$1,700 to more than US$3,000 now, almost doubling.
Recently, media reports have mentioned that freight rates on most routes have increased by nearly one or two times within a month.
From South China to Ho Chi Minh Port, in about a month from the end of October to the beginning of December, the freight for a 40-foot container has increased from the original US$500 to US$2,000-2,500, an increase of up to five times.
A freight forwarding company in Ningbo, Zhejiang said that freight rates at some ports in Vietnam and Thailand, including Indonesia and Malaysia, have generally risen to more than US$3,000. Before the epidemic, this freight rate might only be at the level of 200 to 300 US dollars.
A freight forwarding manager from another logistics company in Ningbo revealed that the shipping market in Southeast Asia has skyrocketed. Last week, he suggested a cargo owner hurry up and book a ship when the container price was still over 2,700 US dollars. As a result, the other party hesitated and the price has risen to more than 3,600 US dollars.
The freight forwarder analyzed that the increase in shipping prices in Southeast Asia is related to multiple factors, including the easing of the epidemic in Southeast Asia and more shipping companies turning around and sailing to Southeast Asia.
It is understood that the epidemic situation in Southeast Asia has slowed down recently. Countries such as Vietnam, Thailand, Malaysia and Indonesia have begun to relax their anti-epidemic measures for manufacturing companies, and factories have begun to resume work. The demand for shipping and air transport capacity in the region has begun to grow.
Data from the Ningbo Shipping Exchange shows that in November, the freight index for the Thailand-Vietnam route increased by 72.2% month-on-month. In the latest week, the freight index for the Singapore-Malaysia route increased by 9.8% month-on-month. Industry experts said that the resumption of work and production in Southeast Asia has increased demand and freight rates have risen beyond expectations.
However, affected by congestion at some ports in Southeast Asia, the actual supply of shipping capacity in the market has decreased. The above-mentioned freight forwarder also pointed out that the transportation capacity investment in the Southeast Asian market has been reduced a lot, so when the demand increased, the transportation capacity could not keep up.
Taking over the US-Western route, it is now difficult to find a cabin in Southeast Asia
Data from the National Bureau of Statistics show that in the first eight months of this year, my country’s metal container production increased 1.7 times year-on-year.
It is understood that although the problem of lack of containers has been temporarily resolved, the problem of lack of cabins is still serious.
Amid the imbalance between supply and demand, Southeast Asia began to take over the US-Western route, resulting in a situation where it was difficult to find a cabin and freight rates soared. Not only have “consolidated containers” and “consolidated containers” become the norm, but even the corners of the container space, companies have also made plans.
Yang Deshi, General Manager of an International Freight Forwarding Co., Ltd. in Yiwu, Zhejiang: Direct consolidation services are available in three countries: Thailand, Malaysia, and the Philippines. The main products are daily necessities and handicrafts. We basically provide LTL and parcel delivery services.
It is reported that freight forwarding and logistics companies have begun to issue early warnings to customers exporting to the Southeast Asian market, saying that freight prices will continue to rise and delivery must be urgent.
At the same time, due to the unresolved congestion problem at U.S. ports, many shipping companies are withdrawing from the West Coast route.
Wan Hai Shipping previously said that the company was moving ships from the Asia-US West route to intra-Asia. In addition, ZIM has also made similar diversions and suspended expedited services to Los Angeles for at least seven weeks.
According to the data compiled by Easy Shipping Schedule, the routes from Shanghai and Ningbo to the West America, East America and Northern Europe have experienced large-scale suspension of sailings and port hopping. South China and North China also have many suspended routes and port hopping on the West America route. Affected by this, the Southeast Asian market has also begun a pattern of skyrocketing freight rates.
In fact, although freight rates on some routes experienced a temporary decline in the early stage, global shipping freight rates have not seen the expected sustained price reduction so far, and are still at a high level overall.
Alphaliner predicts that this year may see EBIT (earnings before interest and taxes) of the world’s ten leading shipping companies reach $120 billion. Alphainer said this forecast is more than six times higher than 2020 data.
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