Freight rates between China and the United States soared by 250%! 'A box is hard to find' or will make a comeback!

As a "barometer" of global trade, containers have a complete set of operating procedures. However, under the impact of the epidemic, this set of procedures has fallen into chaos, and issues such as insufficient containers and uneven distribution of containers have also become obstacles to the performance of many companies. ".
There are orders but no boxes. The shortage of empty containers starting from the second half of last year has really broken many foreign trade companies. Today, the situation has just improved, but people in the industry have given warning that the situation of soaring freight rates and "hard to find a box" may be coming back. The reason is the blockage of the Suez Canal.

On March 29, the Suez Canal, which had been blocked for nearly a week, finally opened to navigation. Upon hearing this good news, the head of a foreign trade company in Ningbo, Zhejiang Province contacted customers as soon as possible to discuss new sales and shipment plans. This company has more than 7,000 refrigerators that need to be sent to France through the Suez Canal.

Wang Jianming, Director of Overseas Department of a company in Ningbo, Zhejiang: For us, March and April, including May, is a very important export season for us.

Although the Suez Canal has resumed navigation, the news that the blockage of the canal will cause the freight rate to continue to rise one after another has caused many enterprises to worry about it. The person in charge of the largest local logistics company in Ningbo also said that shipping companies have started to take advantage of the opportunity to increase prices, including the US routes that have nothing to do with the Suez Canal.

Jia Jun, person in charge of a logistics company in Ningbo, Zhejiang: The overall shipping price has been increased. The European Red Sea has risen by US$2,000 this week, and US routes that have nothing to do with the Suez Canal have recently increased their prices by about 40% to 50%. So it is expected that ocean freight will remain high in the second quarter of this year.
At the same time, with the arrival of the traditional peak shipping season for manufacturing companies, the "hard to find a box" situation has once again appeared. Many companies have already begun to book less than April.

The person in charge of a foreign trade company in Ningbo, Zhejiang: Our current inventory in Spain is already at zero sales, and our local agents in Europe and our customers are all anxious to urge replenishment.
Freight rates between China and the United States soared by 250%! When will the sky-high freight cost be closed?
Both the shortage of containers and the uneven distribution of containers provide support for rising shipping costs. Taking China-US shipping prices as an example, data from the Shanghai Shipping Exchange shows that in mid-March, the shipping price from Shanghai to the west coast of the United States has risen to US$3,999 (approximately RMB 26,263) for a 40-foot container, which is the same as the same period in 2020. That’s an increase of 250%.
Analysts at Morgan Stanley MUFG Securities said that compared with the annual contract fee in 2020, the current spot freight rate has a gap of 3 to 4 times.

It is reported that in October 2020, the container equipment leasing company Textainer predicted that with the accelerated vaccination progress, the shortage of containers will be alleviated by mid-February 2021. However, currently, Textainer's prediction has not been fulfilled; and According to the latest forecasts of analysts from Japan’s Okazaki Securities, if the shortage of containers and ship detention cannot be resolved, the rare high freight rates at this stage will continue until at least June.
It should be noted that the "big ship jam" in the Suez Canal seems to make the operation of global containers "worse worse" when the balance of global containers has not yet been restored. According to media reports, nearly 300 ships have been waiting in line during the past week of the big ship jam. Although traffic has been restored, it still takes three and a half days for the traffic to be fully unblocked.