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Home > Chemial News > Echemi Focus > Out of control! Raw materials are up! Sea freight has risen! An unprecedented price increase is coming!

Out of control! Raw materials are up! Sea freight has risen! An unprecedented price increase is coming!

Echemi 2021-07-01

Global shipping costs are constantly reaching the top in a "rocket-like" manner. The four words "sit on the ground and raise prices" are sufficient to describe the current global shipping market. Although the performance of shipping companies is "prosperous", the price may be that the macro economy has to bear imported inflation. risks of.

 

When freight rates soared in August and September last year, ocean carriers were already shouting "freight rates are becoming crazy" and "record breaking". Today, ocean freight rates are still breaking through previous records.

 

In addition, since the blockage of the Suez Canal and the continuous fermentation of the epidemic, the congestion crisis of South China ports has occurred. With the new voyages of major shipping companies, it is almost difficult to see signs of relief. The deterioration of the situation has not only made a cabin Hard to find, further leading to crazy increases in freight rates.

 

From July 1st, more and more shipping companies will join this price increase "queue": some companies have resorted to the "three consecutive increases" within half a month, and some companies have even set a single record in shipping history. The second highest increase...

 


The sequelae of the "big ship jam"

 

Three months ago, on March 23, a large freighter stranded in the Suez Canal, which led to a world-renowned "Shige Jam of the Century" accident.

 

Since then, the "sequelae" of the global port congestion caused by the Suez Canal ship jam has gradually spread to China.

 

Since May, as hundreds of container ships affected by the previous ship jam have arrived in China, major container ports in China such as Shanghai Port and Shenzhen Yantian Port have experienced severe congestion.

 

Shanghai Port is the world's largest container port. According to reports, the port has been operating at full capacity for a long time, but congestion continues. The average daily operation volume exceeds 130,000 TEUs, which was once 149,500 TEUs, which is close to the highest in history. 

 

Shenzhen Yantian Port, another major container port in China, also ushered in a large number of European ships arriving at the port, causing the port to pick up containers slowly, increase the volume of containers in the yard, and long queues of container trucks entering the terminal.


Vespucci Maritime shipping analyst Lars Jensen publicly stated that the number of congested containers at Yantian Port has exceeded the number of containers blocked in the Suez Canal three months ago.

 

As the epidemic spread in many regions of Guangdong, congestion appeared in many ports in southern China. As a result, China's export goods have to continue to move northward, and ocean freight rates have been pushed up as a whole.

 

The second half of the year is the traditional peak season for shipping, including the Western Halloween, Black Friday shopping festival, Christmas and other goods will be sent out from August to December, plus difficult bookings, serious port congestion, unstable shipping schedules, etc. Unfavorable factors, the shipping situation will be even more tense in the second half of the year.

 

Since May, Hapag-Lloyd, Mediterranean Shipping (MSC), COSCO SHIPPING, Matson, Kambara Steamship and other shipping companies have announced several rounds of fee increase notices.

 

Compared with a year ago, ocean freight has risen several times on average. What's more, the FAK rate from Asia to Northern Europe is approaching US$20,000 per 40 feet—this is an increase of 1,000 compared to the spot rate a year ago. %, which is an increase of 10 times year-on-year.

 

Hard to find a cabin and rising prices have become the norm in the shipping industry this year.

 

The congestion of the port and the sluggish supply chain, the continued growth of exports, the strong demand for container transportation, and the decline in the capacity of the besieged epidemic, the export container freight rate continues to rise due to multiple factors.


The actual freight rate is much higher than the related index:

 

For example: the United States used to be $1500/large box, but now the small box is $10000, and the large box is more than $13000;


Southeast Asia, Thailand is normally $300/large box, now it is $1600/large box;

 

In Europe, the normal small box is about $800, and the peak season is about $1000. Now the small box is above $8000 and the large box is about $17000, which is still rising;

 


Does the surge in shipping prices create resistance to exports?

 

The unbalanced global recovery in 2021 will further push up prices. The current soaring ocean shipping prices in Europe and the United States show strong demand in Europe and the United States, while poor shipping may pose a certain resistance to export transportation.

 

On the one hand, the triple pressures of rising raw material prices, appreciation of the renminbi, and high shipping prices have inhibited the enthusiasm of small and medium-sized enterprises to receive orders;

 

On the other hand, facing the current problems of poor shipping, port congestion, prolonged delivery time, shortage of containers, etc., some exporters are also facing the problem of not daring to receive orders and not being able to ship goods, which exacerbates the problem of export transportation. resistance;

 

The impact of the current Southeast Asian epidemic on my country is two-way. On the one hand, ASEAN’s external demand may be weakened. On the other hand, due to the suspension of ASEAN’s production capacity repairs, the substitution effect of my country’s exports will increase. However, whether order backflow occurs requires further Observation also depends on the prevention and control of the epidemic in Southeast Asia.

 

On the whole, my country’s export structure has been continuously optimized. Among the current export products, electromechanical products and high-tech products have become the main force. Under the continuous external demand, my country’s exports will still maintain a certain degree of resilience.

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