Spot container prices continue to rise and reach new highs due to a combination of strong shipping demand, port delays and container equipment shortages.
Part of the price rise is due to a shortage of ships, as much of the capacity is already deployed on the hot trans-Pacific and Asia-Europe trade routes.
In fact, many ships have been diverted from smaller trade routes to the hot Asian market in recent months. Shipping lines have shifted as much capacity as possible to the booming Asia-Europe and trans-Pacific trade.
Despite this, the freight rate on the route from Asia to Northern Europe still has no downward trend.
Rising tenfold! Container freight rates on the Asia-Europe route 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 US$12,000/FEU, which was higher than The previous week’s increase of $1,500/FEU was almost a tenfold increase from the $1,300/FEU assessed on this route a year ago.
The latest freight rate increases come as demand continues to outstrip supply on major global routes. Compared with the beginning of the epidemic, the number of empty containers in circulation in the shipping industry has dropped sharply. This is mainly because once the containers are unloaded from the ship, it costs more to return the containers to the port due to a shortage of dock workers, poor inland transportation and the epidemic. Time has increased significantly.
The whole world feels this. Some containers take four weeks to return to port after being unloaded, whereas at the beginning of 2020 it only took about seven to 10 days.
Due to coronavirus outbreaks in major global hubs, port delays have significantly reduced support staffing levels, with the result being significant delays in logistics.
For example, in the first quarter of 2021, delays occurred offshore California, with nearly 40 container ships waiting in line outside the ports of Los Angeles and Long Beach. The massive backlog of containers is putting further pressure on already fragile supply chains.
On European trade lanes, the closure of the Suez Canal in March caused major bottlenecks in European ports. Although the port was able to clear some of the backlog of cargo during the quiet period before container ships arrived, in April, a large number of ships arrived at the port at once, resulting in extended waiting times at the port and exacerbating the already tense market situation.
Carriers are taking a big hit in all of this, as delays mean far fewer containers arrive at ports within the planned window.
While carriers around the world are working to buy new containers, some are still worried that the containers will be delivered at ports and cause more trouble for shipping.
With all the ships currently working their butts off moving fully loaded containers around the world, carriers do not have a flexible system for repositioning empty containers. As a result, some market participants are concerned that a large number of newly built containers will be stranded at the terminal and the port will be further delayed due to the inability to relocate the containers to suitable areas.
Although the entire industry hopes that these logistics problems will be alleviated soon, it now appears that these problems will continue until at least the end of the third quarter.
In addition, according to Platts Container Rate 11, container freight rates from North Asia to the United Kingdom also hit a record high, rising from US$1,325/FEU in the same period last year to US$14,500/FEU.
Hapag-Lloyd has raised its surcharge again, up to US$3,000!
Recently, Hapag-Lloyd announced that starting from June 15, it will increase the comprehensive rate increase for eastbound routes from East Asia to the United States and Canada. Surcharge (GRI).
This fee applies to all types of containers such as dry boxes, reefer boxes, storage tanks, and open-top boxes. This is the second time in recent days that Hapag-Lloyd has announced an increase in surcharges.
The charges are as follows: 20-foot container, USD 2,400 per box; 40-foot container, USD 3,000 per box.
Regions covered include: Japan, South Korea, Mainland China, Taiwan, Hong Kong, Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, the Philippines and the Russian Pacific coast.
GRI (General Rate Increa) refers to the comprehensive rate increase surcharge, which is generally used on South American routes and US routes. This fee is mainly due to the significant increase in shipping costs of shipping companies due to port, ship, fuel, cargo or other reasons, and the shipowner adds a surcharge to compensate for these increased expenses.
Judah Levine, director of research at Freightos, said: “With nearly 40% of containers already backlogged, many shippers are being forced to pay higher freight rates and substantial surcharges to ensure cargo can be Shipment.”
It is reported that some cargo owners who have signed new annual contracts with shipping companies are also racing against time to ship goods, as carriers rush to ship from…Profiting from the high freight prices in the current period, the route volume and operating time have been reduced to varying degrees. </p
