/ By TJ China Freight / Shipping

The freight rate in Europe and the land will continue to rise after the soaring

After a further surge last week, the spot freight rate for containers from Asia to Northern Europe is now 130% higher than the beginning of the year, up 200% year-on-year. The Far East-Europe trade route is still under tremendous pressure, and the freight rate will continue to rise further.

In the current peak season, the influx of imported goods from Asia into the United States does not seem to have eased. Los Angeles and Long Beach are still in a state of collapse and paralysis. There are as many as 20 ships lining up near the west coast, waiting for the empty space in LA Long Beach Port to unload.

Australian ports remain congested, with more than 75,000 teu stranded in Sydney.

Freight rates in the Asian intra-route market remained stable, but from the same period last year, freight rates across Southeast Asia have increased by a staggering 390.5%.

 

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

Europe-to-land route : The North European spot freight rate of the Shanghai Container Freight Index (SCFI) just released by the Shanghai Shipping Exchange increased by 13.5% to US$2,374 per TEU, and the Mediterranean freight rate increased by US$165 to US$2384, spot The freight rate increased by 7.4%. It is worth noting that the year-on-year growth rate in Northern Europe was 196.8%, and the year-on-year growth rate in the Mediterranean was 209.2%. But in fact, the market freight rate is much higher than this.

 

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

 

 

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

A Shanghai-based non-vessel carrier said that several shipping companies are currently offering more than US$6,000/40-foot container to Rotterdam and more than US$8,000/40-foot container to the UK.

A freight forwarder in China stated that the carriers on this route are now purely focused on maximizing freight revenue, regardless of all other agreements. He said: "Shipping companies only give priority to higher-priced spaces-whoever pays more will get the space."

 

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

Christoph Baumeister, senior trade manager for Flexport Asia/ISC-Europe, said the situation for Asian shippers was “worse than week after week”. He added: "The Far East-Northern Europe/Southern Europe trade route is still under tremendous pressure, and freight rates will rise further this week."

Moreover, according to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe of three months or less is 200% higher than a year ago, at $4,831 per 40 feet.

Although Xeneta’s long-term contract freight data showed an increase of 28% to US$1,648 per 40 feet, it pointed out that despite the peak contract season, few deals have been concluded because shippers and carriers think it’s not the time.

In the trans-Pacific region , the spot freight rate remained basically unchanged last week and stabilized at a record level. According to SCFI data, the spot price on the west coast of the United States rose by US$68 to US$3947 per 40 feet, while the port price on the east coast fell by US$8. To $4,700 per 40 feet. The year-on-year growth rates of the West Coast and East Coast of the United States were 161.6% and 78.2%, respectively.

Since mid-September, due to the intervention of Chinese regulatory agencies, the spot market on this route has remained stable, and shipping companies hope to obtain guaranteed income from their premiums.

As the influx of merchandise imports from Asia into the United States during the peak season did not seem to ease, the Port of Los Angeles data confirmed that the port's imports in the 50th and 51st weeks increased by 37% and 54% year-on-year respectively.

 

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

The continued growth of imports has put tremendous pressure on the San Pedro Bay ports in Los Angeles and Long Beach. Freightos Chief Marketing Officer Eytan Buchman said: "There are reports that as many as 20 ships are lining up near the west coast, waiting for the unloading of empty spaces in the Port of Long Beach, LA. Retailers are eager to put these goods on the shelves before the holidays."

As for Australia and New Zealand routes , with the gradual improvement of the epidemic situation and the continuous growth of transportation demand during the traditional peak season, the market freight rate has increased. According to the SCFI index, the freight rate (sea freight and ocean freight surcharge) for exports from Shanghai to the basic port of Australia and New Zealand was US$2490/TEU, up 2.5% from the previous period. But the Australian shipping business is currently in a "state that has never been so bad."

The continued "chaos" in the Australian container supply chain will mean that some retailers' shelves will be empty during Christmas.

The impact of supply chain delays caused by the Maritime Union of Australia (MUA) strike in early October continues. The shipping company stated that the disruption of shipping schedules caused a backlog of "8 to 10 weeks" delays (8 weeks of delay means that retailers will not have inventory "until January of next year"), but the union denies that this is the reason. Rather, it points to the increase in demand during the peak season.

According to the Freight and Trade Alliance (F&TA), trade imbalances, resulting in a large surplus of empty containers and lack of storage areas for storing these containers, are still the main problems hindering the supply chain. F&TA Director Paul Zalai said: “Currently, it is estimated that the imbalance of containers is 75,000 teu, which is stranded in Sydney’s empty container yard and operator’s warehouse. The surplus of empty containers will cause Sydney’s logistics to fall from the current congestion state to an unsolvable situation. deadlock."

 

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

The peak season demand has increased the spot freight rate from China to Melbourne to US$2490, compared with US$1648 in mid-October. Paul Zalai believes that the country’s shipping industry has “never seen such a bad situation.” He explained: “Our ports are congested, services are limited, freight prices are at record highs, detention, congestion and terminal access surcharges continue to increase. "At the same time, similar shipping delays have also affected importers in the Tasman region. Due to the chain reaction caused by port congestion in Australia, the Port of Auckland in New Zealand experienced delays this year.

The market freight rates of intra-Asia routes also remained stable last week, but from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%. 

Although these are eye-catching figures, it is important not to forget that 65% to 75% of all goods are transported on the basis of contract freight rates rather than spot market freight rates. However, due to the exhaustion of the number of contracts (many contracts are in unexpected periods when consumer demand is out of control) the rest tends to the spot freight market. When contract negotiations restart next year, the strong bull market will also benefit shipping companies.

Andy Lane of CTI Consulting in Singapore commented: “There is still one month before the new Asian-European contract. This is under the background of record-breaking spot freight rates. Prices may rise sharply, which will have a real impact on the market."

/ By TJ China Freight / Shipping

Where did the empty containers go?

In the past few months, due to the severe shortage of available empty containers, the global supply chain has been hit, causing exporters to have a headache. However, new research shows that there is an obvious problem in the container supply chain-empty containers stay in warehouses for an average of 45 days, while in China, the average time for each idle container is more than two months.

The research project of German company FraunhoferCML and Container xChange shows that although China and the United States urgently need containers, the average residence time of empty containers in warehouses is 61-66 days, which is much higher than the global average of 45 days.

 

The east coast of the United States is usually the location of surplus container equipment (the 40DC container availability value was 0.7 last year), but the container availability rate dropped to 0.43, indicating that there are actually fewer containers than needed.

The researchers said that compared with the Middle East (21 days on average) and Europe (23 days on average), the high standard deviations of 85 days in North America and 129 days in Asia indicate that in many cases, containers stay in warehouses longer than average. Much more.

 

Container xChange is a platform that connects users and suppliers. The platform stated that the availability of containers across China is still at a record low, while the surge in shipping containers from Asia has overwhelmed US ports, and retailers are eager to put their products on the shelves.

Not only is there a serious shortage of 40-foot tall containers (hc) in the shipping market, but there is also a shortage of 40-foot standard containers, and even 20-foot containers are sometimes in short supply.

The container availability rate of 40HCs is only 0.05 CAx (container availability rate) points, compared with 0.63 in the same period last year.

Asia's container manufacturing industry is working overtime to produce, which accounts for 45% of the global container manufacturing market. China International Marine Containers, the world's largest container manufacturer, announced an increase in its orders.

The factory is stepping up container building, and container orders have been scheduled to the first quarter of next year. Even so, the demand for millions of containers has made it impossible for container manufacturing to quench its thirst. The world's three largest container leasing giants have issued a warning that the shortage of containers will continue for four months.

 

Chinese shippers and freight forwarders all over the world "seeking" empty containers, but where did the empty containers go? The answer is simple, it is blocked in other ports.

While the Asian port and shipping industry is desperately desperate for empty containers, although there is a shortage of shipping capacity, price increases can be used to push shipping companies to cancel suspending, refilling, and increase shipping capacity; however, a large number of containers full of cargo are seriously stranded in European and American ports and warehouses. , Unable to move.

In order to alleviate the serious imbalance in equipment, shipping companies have adopted an active strategy for exports to Europe and the United States, suspending orders, and preferring to use as many empty containers as possible to fill return ships.

In fact, in order to prevent all but the most expensive goods, European exporters to Asia are required to pay more than $5,000 per 40-foot container to ensure shipment in December. A British freight forwarder said that many shipping companies now refuse to accept export orders before mid-January. "Our customers are willing to pay such a high freight, but due to port congestion, we are still working hard to get the boxes away. Some boxes have been on the dock for more than four weeks and still don't know when they will be shipped."

At the same time, the urgently needed empty containers in Asia are scattered in warehouses across Europe, especially in the United Kingdom, where troubled ports have to restrict container delivery to already overcrowded terminals.

The current shortage of containers is a once-in-a-century problem in the history of the global supply chain, and it is basically unsolvable in the short term.

/ By TJ China Freight / Shipping

The port in South Asia is in chaos and congestion.

It is reported that the Port of Colombo has a backlog of 50,000 teu of cargo, causing South Asian transshipment cargo into chaos.

In the past few weeks, the Sri Lankan capital has been locked down due to the epidemic, and since the beginning of October, the city’s container terminal labor shortage has caused serious congestion.

Today, this dilemma is affecting the supply chains of neighboring India and Bangladesh.

 

According to Rohan Masakorala, CEO of Shippers' Academy Colombo, the Port of Colombo has reduced the number of employees by about 30%, which has dealt a major blow to the efficiency of crane production and trucking between freight stations.

"The backlog of orders and goods is very large, and it may take six to eight weeks to clean up."

"Colombo International Container Terminal (CICT) mainly focuses on transshipment, while the other two terminals are responsible for feeder ships, so there is an urgent need for transshipment between terminals." He said.

"The lack of truck drivers means that containers are starting to accumulate in the storage area of ​​the port. This also means that it affects feeder ships, sometimes waiting for more than a week, and then even the mainline ships have to be delayed by one to two days."

 

▲Colombo port congestion: a backlog of 50,000 TEUs caused delays and increased freight rates

Masakorala said that given that Colombo handles approximately 600,000 TEUs per month, regional feeders and connectivity are being severely damaged, and carriers are forced to ship containers to India, Singapore and Dubai.

He added: “Of course, Colombo is not the only port affected by the new crown epidemic, but as a transshipment hub, the impact is much greater and the entire region will be affected. Even now, there are still 23 ships waiting for berths, and Usually the port receives 12-16 ships every day, so there are quite a lot of ships waiting at the window."

He explained that it is inevitable that Colombo’s freight has doubled, and shippers need to book eight weeks in advance to get a seat.

 

Masakorala said: “Some shippers have been waiting in Colombo for four weeks and two weeks in Singapore.” “Freight forwarders have been severely affected, so some urgent cargo must be transported by air or to a third port, which increases Cost and shipping time."

He added that, given that ports in India, Bangladesh and Pakistan are fully operational, there are now concerns that the port’s reputation may be damaged. Sri Lanka is ambitious and hopes to become a global shipping and logistics hub as famous as Dubai and Singapore. However, Mr. Masakorala said that the LCL loading and unloading and customs clearance and consolidation operations of FCL have been "seriously affected."

Recently, foreign trade forwarders who transshipped through this port have mainly paid attention to it, for fear of delays and additional costs.

Colombo handled 7.2 million TEUs in 2019, but Mr. Masakorala believes that the port’s throughput will drop by 10-20% this year.