Does the surge in container ship rates threaten the global economic outlook?

Entering 2021, the imbalance between supply and demand in the freight market has still not been solved, and the high freight rate is becoming a major threat to the global economic outlook this year.

The lack of box problem is difficult to alleviate, the freight rates of all routes remain high

Affected by the epidemic and the shipping peak before the Spring Festival, the volume of goods on the European and North American lines remains high, the ports are congested, and the shortage of boxes leads to the difficult turnover of containers. The imbalance between supply and demand in the consolidation market has not been effectively alleviated.Global shipping rates are maintained at a high level.

Due to the recent port congestion caused by the epidemic, the average space utilization rate of container ships from Shanghai Port to Europe continues to be full, and most of the ships maintain the original freight rate, while the spot market booking price drops slightly.According to the statistics of Shanghai Shipping Exchange, the freight rate of Shanghai exports to the European basic port market on January 15th (sea freight and sea freight surcharge) was USD 4413 /TEU, down 0.9% compared with the previous period.The freight rate for Shanghai exports to the Mediterranean basic port market (sea freight and sea surcharge) is USD 4296 /TEU, which is the same as the previous period.

There is still a bottleneck in container transportation in North America. The average shipping space utilization rate of ships from Shanghai Port to the east and west of the United States is nearly full. The shipping rate is stable, and the booking price in the spot market has risen slightly.On January 15th, the freight rates (sea freight and sea surcharge) of Shanghai exports to the west and east basic ports of the United States are 4054 USD /FEU and 4800 USD /FEU respectively, with a slight increase of 0.9% for the west route and 1.1% for the east route.

South American epidemic is serious, the import demand is large, the transportation demand is high, the transportation company is increasing the overtime shipping schedule to ease the transport capacity tension.The average shipping space utilization from Shanghai Port to South America is more than 95%, and most of the flights are fully loaded. Some shipping companies have raised the booking price, while the spot market freight rate has risen slightly.On January 15th, the freight rate (sea freight and sea surcharge) of Shanghai exports to the basic port of South America is USD 8907 /TEU, up 3.2% compared with the previous period.

In Asia, Singapore and Malaysia port klang port congestion problem is most serious, a lot of lines to Europe or the Middle East ship over the two dock port do not do, so had to forwarder company will customer to Singapore or port klang port of goods bought from neighbouring johore in and out, such as estimation of southeast Asia line is likely to rise before the lunar New Year holiday in Singapore, port klang and ho chi minh city.

At present, Europe and Southeast Asia route has not yet moved up freight price news.However, due to the obvious shortage of space, the purchase fee of the American line remains high. The purchase fee of the American east line was raised to $4,000 /FEU in the middle of January, but so far there has been a purchase fee of $6,000 /FEU, and the purchase fee of the American west line has reached $2,500.Adding to the gloom is the recent confirmation of hundreds of longshoreworkers at the ports of Los Angeles and Long Beach, which could seriously slow down the ports' multibillion-dollar logistics economies.

Container shipping costs will multiply, with far-reaching consequences for the global economy

Most people in the industry believe that freight market supply and demand imbalances will continue until at least the first quarter of this year, San Francisco, deputy general manager of freight and customs clearance agent company Flexport Nerijus Poskus estimates, the global container gap at 500000, almost equivalent to 25 of the twenty thousand cases, the world's largest ship loading capacity, compared with last year's rising cost of shipping will increase this year.

Experts pointed out that it is expected that a large number of empty boxes will be shipped back from Europe and the United States in April and May, one to three months after the Spring Festival. The shortage of boxes is expected to ease, but it is still difficult to say exactly how.The timing of the shortage can then be judged by three signals: retail inventory, global ship on-time and the latest container ship supply and demand.If retail inventories remain low, demand remains strong;If ship on-time rates start to rise from a low point, then port congestion has eased.

According to Alphaliner's latest forecasts in December, global container volumes are growing at a faster 3.5 per cent this year than last.The gap between supply and demand figures narrowed, indicating a reversal of the oversupply in the containerized transport market in the past decade.While this year looks set to be a healthy year for supply and demand, if the outbreak returns, the market will be fraught with uncertainty.

Although the global economy is still badly hit by the epidemic, the freight industry has experienced the most severe price increase in history, as demand outpaced supply and increased freight prices.Comprehensive data show that the current European and American line and other popular routes have increased by several times, Australia has increased by nearly 9 times, European routes also increased by more than 5 times, and even Southeast Asian routes have also increased by more than 4 times since the end of last year.

Some manufacturers admit that they cannot afford the current level of freight rates, and it is more difficult to pass on the additional costs brought about by soaring freight rates to customers.Should be in the fourth quarter of last year the goods sent out, because of the lack of container without bunting, still unable to shipment, but already hold a mountain of goods warehouse, some European countries even offer 8000 euros (RMB 63000) are unable to find a container are available, and this is not seen in the past few decades.

Obviously, the freight rate surge caused by the supply and demand imbalance has already affected from the supply chain level to the operational level, forcing enterprises to reduce production or increase inventory pressure, affecting cash flow, and even affecting the demand side of the entire industrial chain by reducing orders.Consumers and businesses have to bear the cost of higher freight rates for consolidation, which could have an economic impact that outlasts the problem of "container shortages".