Asia-Europe container freight rates hit new highs
Due to the combined effects of strong maritime demand, port delays and container shortage, the spot price of containers continued to rise and reached new highs. Part of the reason for this price increase is the shortage of ships, as most of the capacity has been used on the popular Trans-Pacific and Asia-Europe trade routes. In fact, in recent months, many ships have been moved from less popular trade routes to the Asian market. Shipping companies have transferred as much capacity as possible to facilitate the expansion of Asia-Europe and the Trans-Pacific trade. However, there is no indication that the freight rate on the Asia and Northern Europe route is decreasing.
On May 17, Platts Container Rate 1 showed that the container freight rate on the North Asia and North Europe route climbed to 12,000 USD / FEU, an increase of 1,500 USD / FEU from the previous week and nearly ten times the estimated 1300 USD / FEU. for this route a year ago.
The latest increase in freight rates came at a time when demand on major global routes continued to exceed supply. Compared to the start of the pandemic, the number of empty containers in circulation in the shipping industry has dropped sharply. This is mainly due to the fact that once the containers are unloaded from the ship, due to the shortage of manpower at the terminal, poor inland transportation and the pandemic, the return time to port has increased significantly. The whole world is feeling this. Some containers can take 4 weeks to return to port after unloading, whereas in early 2020 it only took around 7-10 days. Due to the outbreak of the Covid pandemic at major hubs around the world, delays at ports have dramatically reduced the availability of support staff, resulting in significant delays.
For European trade routes, the closure of the Suez Canal in March caused major bottlenecks in European ports. Although the ports were able to clear some of the backlogs during the quieter period when container ships could not arrive, a large number of ships arrived at the port at the same time in April, resulting in a waiting time longer, making the market worse. situation already under pressure. As the delays mean the number of containers arriving at the port within the scheduled window has dropped dramatically, carriers have been hit hard. Although carriers around the world are working hard to secure new containers, there are people who are concerned that these containers will end up in ports and pose more problems for shipping.
By now, all ships have used their full capacity to transport fully loaded containers around the world, and carriers do not have a flexible system for moving empty containers. Therefore, some market players fear that due to the inability to move containers to appropriate areas, a large number of new containers will be stuck at terminals and further delays at ports. While the industry as a whole is hopeful that these logistical issues can be resolved as quickly as possible, it currently looks like these issues will last at least until the end of the third quarter.
In addition, Platts Container Rate 11 showed that the North Asia and UK route container freight rate also hit an all-time high, dropping from 1325 USD / FEU during the same period last year. at 14,500 USD / FIRE.
Source: Shipping abroad