Due to the impact of the week-long Suez Canal obstruction, ships and containers in Asia have been restricted. Spot freight rates for containers on popular routes such as Europe and the United States have risen sharply, and ports will continue to be congested.
▌Port congestion continued into the third quarter
It is expected that the container market will still have congestion problems before the third quarter.
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Not only in the United States, Europe and many ports in Asia, there are congestion problems to a certain extent, which means that current shipping companies actually need a large amount of shipping capacity to transport the same number of containers.
Simply put, for each service, if you want to continue to provide weekly services, you will need to add one or two more ships, depending to a certain extent on whether it is going to the United States or Europe. Of course, we are also seeing some port capacity reductions because of labor shortages or epidemic-related restrictions in many places.
Due to crowded markets and strong demand, short-term freight rates have soared.
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▌All routes have increased prices!
As of last week, the consequences of the week-long blockage of the Suez Canal have begun to appear, and the spot freight rates of the Asian-Europe and American routes have "dramatically increased."
On the trans-Pacific trade route, the Freightos Baltic Exchange (FBX) index from Asia to the West Coast of the United States rose 4% last week to $5,375/FEU, an increase of 251% over the same period last year.
As for the East Coast of the United States, the FBX index rose 3% to $6002/FEU, an increase of 108% over the same period last year.
Freight rates on major routes such as Europe and the United States have risen across the board! Hapag-Lloyd: Port congestion will continue until the third quarter, and the freight rates of major routes such as Europe and the United States will rise! Hapag-Lloyd: Port congestion will continue into the third quarter
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Last Friday, the North European and Mediterranean regions of Ningbo Container Freight Index (NCFI) surged by 8.7%, which is almost the same as the freight rate (ocean and ocean freight surcharges) (SCFI) of 3964 US dollars/TEU for exports from Shanghai to Europe’s basic port, up 8.6% from the previous period. Coincides with the growth. NCFI commented: "The shipping companies collectively pushed up the freight rate in April, and the booking price rose sharply."
For the Persian Gulf route, the SCFI freight rate (ocean and ocean freight surcharge) of the previous period was 1,624 USD/TEU, an increase of 8.0% from the previous period.
For South American routes, the SCFI freight rate (ocean and ocean freight surcharge) of the previous period was USD 7,155/TEU, an increase of 3.8% from the previous period.
▌Balance of supply and demand development
Although congestion in Europe will continue until about the third quarter and congestion in the United States until the end of the second quarter or the beginning of the third quarter, the supply and demand situation in 2021 and 2022 will look good.
When you look at 2021 and 2022, the development of supply and demand actually looks quite balanced. This also means that when the surge in demand returns to normal, shipping will also return to normal. The peak at the end of the second half of 2020 may flatten out. Now only need to solve these congestion-related problems.
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