Congestion in the maritime industry may continue until 2023! High freight rates contribute to global inflation

According to Reuters, the global shipping crisis caused by the epidemic has caused delays in cargo shipments and contributed to the effect of inflation, which may continue until 2023.

Economists have rarely included freight-related figures in calculating inflation or GDP in the past; companies are worried that the opportunities for raw materials and labor costs are also greater than those for transportation, but these are changing.

According to the Baltic Sea Container Shipping Index, although the current 40-foot container freight rate has fallen by about 15% from the September all-time high of 11,000 U.S. dollars, it only required 1,300 U.S. dollars before the epidemic. 90% of the world's cargo is shipped by sea. Such high shipping prices have increased global inflationary pressures, and the current inflation is more serious than expected.

Berenberg analysts estimate that 11% of the world's cargo containers were blocked at sea in early November. Although it was better than when it was most blocked in August, it was still much higher than the 7% before the epidemic.

Charles Zhao, CEO of Golden Bridge International Inc, recently hosted a forum at the US-China Business Association to share his years of experience in the logistics industry. It was mentioned that the logistics and transportation problems during the epidemic were very difficult. The original price of a container was US,000, but the price has now risen to US,000 to US,000, and the highest is US,000. Shipping has gone from US per kilogram to US or 15 per kilogram, and many goods are worth more. If the freight is lower than the freight rate, many manufacturers have shipped goods that are too late to be sold. Under the pressure of fines, they simply do not abandon the goods.

Charles Zhao said that the port congestion has reached a very serious level. There were more than 100 large ships parked outside the port on December 6th in Los Angeles and Long Beach. I am afraid that it will be better before the end of the Christmas season before the end of next year..

Charles Zhao analyzed that the reason for the congestion of the terminal was that the railway could not pull the container from the terminal. The terminal was full of goods. When the ship came there was no place to unload the goods. The trucks were not enough. The warehouses were full because the goods were unloaded. Empty cabinets are piled up in warehouses, and there is no place to pick up empty cabinets at the wharf, which forms a vicious circle. The empty containers cannot be returned, and the cost of storage of cars and cabinets can be more than 2,000 US dollars. Not only the price increase of the US line, but also the freight cost of the Asian line, the logistics congestion causes the cost of all aspects to increase.

According to data from Canadian RBC Capital Markets, at the end of October, the time required for container ships to complete unloading at Long Beach in Los Angeles, one of the world's largest container ports, was twice as long as before the epidemic. The bank’s analyst Michael Tran also said that even if the Los Angeles Long Beach port reaches the goal of handling 3,500 more containers per week, it is unlikely to clear the backlog of containers before 2023.

A report by the United Nations last month pointed out that high shipping prices threaten the recovery of the global economy and may increase global import prices by up to 11% and consumer prices by 1.5% between now and 2023.