The Impact of Rising Sea Freight on Exports
Influenced by the epidemic, the global trade had fallen into a slow state. After a sharp drop in shipping demand in the first half of last year, freight rates have continued to rise since October 2020, driven by the growth of export volume.
The freight are being higher and higher, and getting a shipping space is comparable to getting the Spring Festival train tickets, what’s more, an empty container is difficult to find for forwarders and consignors.
At the beginning, the freight rate of Southeast Asia lines was still in a stable state, but since November 2020, Southeast Asia lines finally ushered in the biggest price increase. After November 10, 2020, Southeast Asia lines have broken through the defense line of 2000 dollars, rising by 1000 dollars.
At this stage, the biggest price increase is nothing more than 100% for Africa, 60% for the US and 50% for Europe…..
The decline in international logistics capacity has led to a big increase in ocean freight charges. The freight rates of the US and western routes have increased nearly 3 times compared with the beginning of 2020, and the freight rates of the South American routes have also soared!Under the background of tight transport capacity, the phenomenon of container shortage and dumping of containers are more and more! Textainer and Triton, two of the world’s top three container equipment leasing companies, both said the shortage will continue in the coming months.
The surge of sea freight in November 2020 has already put enough pressure on international traders. We did not expect that the pain of “one box is hard to find” has just begun. Some shippers and forwarders “cried” :
“It is not easy to book the shipping space, but empty container can’t be find!What a human suffering!”
“Containers only go out but not in. No wonder.”
“Foreign wharf in shout, so many containers can not pile up any more, domestic wharf in shout containers?Ah! Where is the container?”
So Evergreen’s profit in a single quarter had a year increase of 5937%! The profit exceeded that of the previous three years combined. Wanhai, Yangming and Taiwan are all making a fortune.
With crazy freight and container shortage, shipping companies even come up with fancy names like surcharge, loss charge, container protection fee to make the price higher…… Regulators in China and South Korea have been talking to shipping companies, and America has launched investigations into containers and freight charges.
In addition, soaring freight costs and allegations of “monopolistic” behaviour have led some exporters to call for greater regulation of shipping lines.
Naveen Prakash, director of Global Logistics Solutions India, said: “Rising freight rates and container shortages are not local problems;”Shipping companies are global businesses and allocate assets where they can get the most bang for their money.”Mr Prakash added: “If the global supply of containers increases and demand falls, then consignees and shippers will again enjoy much lower rates and additional free days up to 21 days.”
Hopefully more empty boxes will be shipped back from overseas after Chinese New Year and there will be no more outbreaks in 2021, then we can probably expect a drop in freight rates in March.