As an important force in international logistics, freight rates for maritime container transport are rising. Major routes from China to the U.S. rose to twice as much as a year earlier, and to Europe reached four times as much, hovering near the highest point. The shortage of containers has failed to ease as housebound Life under the new crown (CCP virus) Epidemic has led to a surge in shipments of furniture and daily necessities, among others. Shipper companies are facing disruptions due to stagnant shipments and increased costs. Container shortage has the potential to become a heavy burden on the world economic recovery.
China Shanghai Shipping Exchange statistics show that Shanghai to the U.S. West Coast spot (instant contract) freight rate of $ 4,000 per 40 feet (12 meters) container, up to 2.4 times the same period last year. And the freight rate to Europe for each 20 feet (6 meters) container 4,400 U.S. dollars, up to 4 times. Freight rates to Southeast Asia, South America and South Africa also rose to 3 to 6 times, the highest price since the beginning of statistics in 2009.
The background for this is the surge in shipments to North America since the summer of 2020. The new crown epidemic in the U.S. continues, and Home-based living has brought about active consumption. Residential sales also remain firm against the backdrop of higher stock prices and monetary easing, with strong demand for furniture and home appliances shipped since the beginning of summer. Since autumn, shipments of auto parts and semiconductors have also recovered. Statistics from the Japan Maritime Center show that maritime container shipments from Asia to the U.S. increased 28% year-on-year in December 2020, maintaining two-digit growth for the fifth consecutive month.
Sea container transport
A large number of containers shipped from Asia, where they are produced, to the United States, where they are consumed, are stranded in the United States. The shortage of containers is also exacerbated by the stagnation of unloading operations and “traffic jams” on ships at U.S. West Coast ports due to cargo surges and epidemic prevention. Global container supply and demand imbalance, as a result, after the U.S. personal computer peripherals and car-related products began to recover the shipping costs to Europe, etc. also appeared to skyrocket.
Its impact is also expanding to Japanese shippers. A major Japanese general merchandise company, which imports goods produced in China and other places into Japan, said that freight rates have risen significantly since December 2020. It is reported that when shipping from China and Southeast Asia to Japan, some dates and liner fees have risen up to more than four times the usual rate. Shipping has also become sluggish, and some stores continue to have shortages and unavailability of cleaning appliances and storage supplies.
At Chugoku Agricultural Machinery Company, for example, shipments from Japan to Europe that were scheduled for shipment in January have been postponed until February. The person in charge said, “We cannot absorb the increase in freight costs, so we have decided to ask for a half share with our European customers on an exceptional basis for this shipment.
Among large companies exporting passenger car and truck parts from Southeast Asia to North America, etc., there were cases where shipping companies were not accepted even though they were entrusted with high freight rates at the peak. Exporters are committed to improving transportation efficiency, but it is difficult to absorb the costs on their own, and passing them on to prices will be a problem in the future. On the other hand, since there is also a risk of reduced sales due to price increases, countermeasures such as thorough promotion of cost cutting will be discussed at present.
At ports on the west coast of the United States, it is sometimes necessary to wait for more than 1 week to unload cargo. As we enter January 2021, new crown aggregation infections are appearing at the Port of Los Angeles and other places. If unloading is further delayed, it is likely to exacerbate the rise in freight rates.
Shipping companies will accelerate international interchange of empty containers, but there is a view that “the shortage of containers may not be resolved until May to June” (Takashi Maruyama, director of Shokai Mitsui). If cargo transportation slows down, industry and consumption are likely to come to a standstill.
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