European ports are experiencing unprecedented container congestion, freight rates continue to rise, and it is difficult to fall back in the short term

According to the Shanghai Export Container Freight Index (SCFI), as of May 7, after a period of decline in the previous period, the Shanghai Export Container Price Index climbed to a high this year, reaching 3,09.16, which was basically the same as the previous period (April 30). .

With the repeated epidemics in Europe and the United States, the surge in traffic from Asia to Europe will continue until the third quarter of this year. Congestion in European and American ports will continue to be the main bottleneck in the supply chain, and container prices will continue to rise.

European routes: The epidemic in Europe has experienced multiple rounds of repetition, and a large number of supplies, especially daily necessities and medical supplies, need to be imported and supplemented, which promotes an increase in transportation demand. The turbulence in the schedule caused by the blockage of the Suez Canal also put pressure on capacity allocation. The booking quotations of some shipping companies rose slightly last week. On May 7, the freight rate (ocean and ocean freight surcharges) SCFI for exports from Shanghai to the European basic port market was US$4678/TEU, an increase of 1.0% from the previous period.
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The most recent FBX spot freight rate from Asia to Northern Europe increased by 4.0% to US$8,248 per 40 feet.
Mediterranean routes: Last week, most shipping companies kept the original freight rates unchanged, and some shipping companies increased their freight rates. The overall freight rates of the routes increased slightly. On May 7, the freight rate (ocean and ocean freight surcharges) SCFI for exports from Shanghai to the Mediterranean basic port market was 4,803 U.S. dollars/TEU, up 2.1% from the previous period.

The most recent FBX spot freight rate from Asia to the Mediterranean increased by 11% to US$8,931 per 40 feet.best china freight forwarders

North American routes: The epidemic situation in the United States is still severe. At present, more than 45,000 people are infected every day, and the market's import demand for various materials continues to remain high. Since the outbreak of the epidemic, stagnant container pressure has caused port congestion and container turnover has become the norm. In order to make up for the insufficient capacity caused by the congestion of the Suez Canal, some shipping companies have allocated the capacity of North American routes to European routes. The most recent FBX spot freight rate from Asia to the US East increased by 6.0% to US$6,588 per 40 feet. The spot freight rate from Asia to West America increased by 4.0% to US$5041 per 40 feet.
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Data from Container xChange, a platform that tracks global container flows, shows that nowadays, containers are pouring into major European ports, and the imbalance in the number of containers entering and leaving the port is still serious. Container xChange CEO Schlingemeier reminded that in India, the epidemic will hardly get better in a short time, and with the postponement effect of the Suez Canal congestion, global demand is still high, and container prices will hardly fall back.

Container xChange's "Container Availability Index" (CAx) shows that the three major European ports-Rotterdam and Antwerp in the Netherlands, and Hamburg in Germany are witnessing an influx of containers.

In the 17th week (end of April) of 2021, the number of 20-foot dry cargo containers accepted by the above three ports increased by more than 3% compared with the previous week.

Among them, the port of Rotterdam received the largest number of 20-foot dry cargo containers. Compared with the previous week (the 16th week of 2021), CAx increased by 3.75%; CAx at the Port of Antwerp increased by 3.5%; Port of Hamburg increased by 2.2%.European ports are experiencing unprecedented large container congestion, and freight rates continue to rise, and it is difficult to fall back in the short term. European ports are experiencing unprecedented large container congestion, and freight rates continue to rise, and it is difficult to fall back in the short term.
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CAx shows that since March, the container throughput of the three major European ports has been greater than that of the same period in previous years, and they have all tended to be saturated. As far as the Port of Hamburg is concerned, in the ninth week (early March) of this year, the CAx was 0.8, but by the 17th week (end of April), the CAx had soared to 0.93, and the container intake was almost saturated.

The Port of Antwerp is also in the same situation. The port’s CAx has risen from 0.38 at the beginning of January this year to 0.9 at the end of April. The situation at the British Port of Felixstowe, where the number of containers has always been at a high level, is even more difficult. In the third week of this year, the CAx of the Port of Felixstowe reached 0.87, while at the end of April this index CAx hovered at 0.95.European ports are experiencing unprecedented large container congestion, and freight rates continue to rise, and it is difficult to fall back in the short term. European ports are experiencing unprecedented large container congestion, and freight rates continue to rise, and it is difficult to fall back in the short term.

Schlingemeier said: "The major container terminals in Europe have been working hard to avoid congestion, but the fact is that for most of 2021, the number of inbound containers exceeds the number of outbound containers. Under this status quo, The congestion on the Suez Canal has exacerbated congestion in European ports."
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Still reluctant to carry empty boxes?

Currently, major European ports are experiencing heavy container congestion: empty containers are not to be seen. After arriving at major European and American ports, many container ships departing from China are eager to make a U-turn at the destination port. As a result, empty containers in many places in Europe and the United States have not been able to squeeze into the ship's space.

Schlingemeier said: "What we have learned from container leasing and trading members is that they are finding it increasingly difficult to book export containers with carriers across Europe. Shipping companies seem to be prioritizing empty containers in order to transfer these as soon as possible. The box was shipped back to China."

This phenomenon has also been recognized by Brian Sondey, CEO of Triton, a major US container manufacturer. "Several of our major customers have reported that almost every vessel leaving China and other export regions is full of cargo. However, due to the tight sailing schedule and the need for rapid transshipment, they cannot wait for all empty containers. 5% to 8% of vacancies. This will not help ease port congestion in Europe and the United States."
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And behind the shipping companies' choice to rush to unload their cargo and unwilling to carry empty containers is the rising container prices since last year. This is true for both new containers and second-hand containers.
Other routes SCFI index

For the Persian Gulf route, the destination market is during the Ramadan period. Due to the temporary adjustment of some capacity caused by the blockage of the Suez Canal, the capacity of the route is restricted. A few shipping companies have raised their booking quotations. On May 7, the freight rate (ocean and ocean freight surcharges) SCFI for exports from Shanghai to the basic port of the Persian Gulf was USD 2441 per TEU, an increase of 6.2% from the previous period.

For Australia and New Zealand routes, the supply-demand relationship remained stable, and the booking quotations of individual shipping companies increased slightly. On May 7, the freight rate (ocean and ocean freight surcharges) SCFI for exports from Shanghai to the Australian and New Zealand basic ports was US$1,896/TEU, an increase of 2.3% from the previous period.

For South American routes, the epidemic situation in South America is more severe. The market has a high demand for various materials, and the transportation demand is stable at a high level. The booking quotations of individual shipping companies fluctuate slightly, and the spot market freight rates increase slightly. On May 7, the freight rate (sea freight and ocean freight surcharge) SCFI for exports from Shanghai to the basic port market in South America was 7,410 USD/TEU, up 1.3% from the previous period.
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