Rents and freight are rising and rising! The container has been stranded for a month! The Ministry of Transport officially responded!

The booming container freight market has further driven the skyrocketing of container rents and second-hand container ship prices. This is a year in which container ships have repeatedly broken records.
The Ministry of Transport responded to the "detention of seaborne containers and soaring costs": it has become a global problem! On-time rate dropped to a trough!

Recently, the Chinese government website learned about a reply from the Ministry of Transport on the issue of “detention of shipping containers and soaring costs”.
A netizen "rzhorus" (mobile phone number 0162) from Rizhao City, Shandong Province left a message saying: Simply from myself, I export products to Poland. In the past, under normal circumstances, the shipping time required about 38 days, and the total cost of customs declaration was about 10,000 yuan. But at the moment, ocean freight has soared, and our fee for a small container has tripled or quadrupled. Not only that, but now the containers we ship from Qingdao Port have to stay in Chinese ports for more than one month. Even if the plan is not delayed, it will take at least 70 days to arrive in Poland. Moreover, shipping companies are now picking and choosing the goods and the arrival port, and the business that had no problem before is now stuck because of the shipping problem.
In response to the above issues, the Ministry of Transport made the following reply:
Affected by the superimposition of multiple factors, the demand for international container transportation has been released intensively since June 2020. In addition to the necessary repairs and maintenance, the major liner companies have basically put all their shipping capacity into the market. Affected by factors such as insufficient labor caused by the spread of the epidemic abroad, ports in the United States and Europe have experienced serious congestion since the fourth quarter of 2020. For example, the most congested ports in the United States, Los Angeles and Long Beach, currently have more than 30 container ships waiting, 85% Ships need to be anchored for at least 8 days to operate; container cargo stays at the terminal for up to 2 months; and European routes generally call at multiple ports, due to the congestion in the main ports of call, the entire voyage time is prolonged. The congestion of foreign ports, the disorder of the logistics supply chain and the reduction of efficiency have caused large-scale delays in container liner schedules. The on-time rate has dropped from more than 70% to the current 20%, which has seriously affected the operational efficiency of container ships and aggravated the container ship schedule. The contradiction between shipping capacity and empty container supply and demand. Problems such as tight shipping capacity, shortage of empty containers, and rising freight rates have become global issues. Vietnam, India, South Korea and other countries have also seen rapid increases in freight rates. The freight rates of some major routes have exceeded my country. Regarding the above situation, our ministry attaches great importance to actively coordinating with relevant liner companies to optimize the allocation of shipping capacity on Chinese routes, increase the capacity of Chinese routes and the return of empty containers, and minimize the large-scale delays in shipping schedules caused by congestion in overseas ports. influences. (Water Transport Bureau of the Ministry of Transport)
On-duty rate has reached a new low

In 2021, the changes in the 2M alliance are mainly to reduce the number of ports of call on routes, and to improve operational efficiency and stability by skipping voyages. Specifically, the focus of the adjustment is to solve the problem of ship schedule delays caused by the congestion of ports in the southwest of the United States. The routes that used to cover Southeast Asia, South China and East China at the port of departure are now adjusted to cover only South China or only East China, shortening the voyage and speeding up the turnover of ships. No change in the Northwest.

Ship rents have risen sharply, and 50,000 USD/day is also normal
On the other hand, liner companies have been selecting vessels to replace the soaring charter rates. This is especially true for charterers of large container ships, with daily rents of US$50,000 and leases for up to 5 years are becoming more and more common.
For example, CMA CGM recently leased an old-fashioned narrow-body container ship, Northern Juvenile, 8814TEU, built in 2009, with a lease term of 5 years, and the rent reached 48,500 US dollars per day.
And just a few weeks ago, another similar sister ship Northern Jamboree, built in 2010, was also leased for 48 months for 8814TEU at a rent of US$44,000 per day. This means that in just a few weeks, the rent of this type of container ship has increased by about 10%.
According to VesselsValue's statistics, the current one-year time charter rate of an 8800TEU vessel has soared to a record 54,000 US dollars per day, which is more than 400% higher than in June 2020. Star Shipping recently leased a 9034TEU ship with a lease term of 5 years. It is said that the rent is as high as US$55,000 per day.

Clarkson introduced in the latest market report, “As the number of ships available for chartering is decreasing, buyers are also interested in ships that are delivered at a later date when the current employment period expires. All signs of market prosperity. It has all been revealed: while the price has improved significantly, the lease time has also become longer and longer."

In addition, the rents of small ships have continued to rise across the board. The latest NEW CONTEX index for measuring the rent of small container ships provided by the Hamburg Shipbrokers Association of Germany reached 1286 points, which set a new historical record.
And the charter prices of various types of ships from 1100TEU to 6500TEU are on the rise.
VesselsValue's data shows that the current daily rent for a 4,250 TEU ship is 33,080 US dollars/day; a 1,750 TEU ship, the daily rent is 27,760 US dollars/day; a 1,100 TEU ship, the daily rent is 22,110 US dollars/day .
Ship freight rates are skyrocketing, and the capacity shortage may continue into the third quarter! There is no hope for prices to fall in a short period of time!

How long can the hot market last? Alphaliner, a shipping consulting agency, predicts that in the medium term, the container leasing market will remain unchanged and may continue into the fall. However, the agency also pointed out that in the long run, these higher rents may have an impact on tenants.
VesselsValue said when looking at the prospects of the container ship chartering market that the current strong market shows no signs of ending. The tight supply of capacity will not ease in the short to medium term. The demand for capacity of all sizes is very strong, and the rental prices of container ships are very strong. Will continue to rise sharply.
The second-hand container trading market is hot! Container freight hit a record high last week!
Trading in the second-hand container market is hot, and ship prices have soared. According to the latest issue of the Shanghai Export Container Freight Index, the container freight rate hit a record high last week, and the Shanghai Container Freight Index broke the 3,100-point mark.

Similarly, the container ship leasing market has risen 55% since the beginning of the year, and is about to break the record in the spring of 2005. According to data provided by Clarkson, the average daily income of container ships reached US$24,833, which is close to the US$25,018 per day in 2005.
Clarkson data shows that the total capacity of container ship transactions in the first quarter of this year reached 420,000 TEU, the highest level on record.

Take the classic Panamax vessel as an example. The price of a 10-year-old 4,400-teu container ship rose by 40% in March of this year, and a sharp increase of 84% from the beginning of this year, and has now reached 35 million U.S. dollars.