The ocean freight rates keep increasing. Some clients delayed the shipment, even disappeared. But is it worth long time waiting? Let’s have a look at the information provided by government department.
Influenced by multiple factors, the demand for international container transport has been released centrally since June 2020, and the ship capacity of major liner companies has been basically all put into the market except for the necessary repair and maintenance. Influenced by factors such as labor shortage due to the spread of the epidemic outside the United States, Europe and other ports since the 4th quarter of 2020 serious congestion, such as the most serious congestion in the United States, the Port of Los Angeles and the Port of Long Beach, currently waiting for berthing container ships more than 30, 85% of the ships need to anchor for at least 8 days to operate; container cargo stays in the terminal for up to 2 months; and European routes generally stop at multiple ports. As the main ports of call are congested, resulting in the whole navigation time lengthened. Foreign port congestion, logistics supply chain disorder and lower efficiency, resulting in large delays in the container liner schedule, the rate of the permitted class has been reduced from the usual 70% or more to the current 20% or so, seriously affecting the operational efficiency of container ships, intensifying the contradiction between container ship capacity and empty container supply and demand. This round of capacity constraints, shortage of empty containers, freight prices have become a global problem, Vietnam, India, South Korea and other countries have also seen a rapid rise in freight prices, some of the main routes have exceeded our freight prices. For the above situation, the Ministry attaches great importance to actively coordinate the relevant liner companies to optimize the allocation of ship capacity on China routes, increase the capacity of China routes and empty containers back to the strength, as far as possible to reduce the impact of congestion in foreign ports caused by the large delay in the ship schedule on China’s import and export transport.
The situation started almost 1 year ago. No reason for a business on hold for a year. We’re on the same boat.
85% Vs 8 Days
Reason 1 for cost increasing, 8 days waiting for operating for 85% of the ships.
Reason 2 for cost increasing, many container stayed in the terminal for 2 months.
There are more reasons to list. But you can see it doesn’t mean that 2 times to 4 times of sea freight rates are reasonable.
Even though, we must accept the fact that shippers speak lounder.
Who gona win?
I think the one who didn’t hesitate to make positive decision winned. We have a large client placed order of spray paint for 10 40HQ containers, and he repeated once at the end of 2020. Now, in his market, price increases and less inventory from competitor.
Will this information help you to make decision? If you want to know more from China, talk to us.