Container marine market welcomes the busiest period

After Shanghai gradually resumed work and production, the Shanghai Containerized Freight index has kept increasing recently. Some cargos in Ningbo were transferred to Shanghai port after the lockdown in Shanghai canceled. As a result, the delivery volume in Ningbo dropped, as well as the freight. The freight of the Red Sea route remained firm and that of South America route moved up. According to the latest data collected by CCFGroup, the freight offer from Ningbo port to Egypt/SOK was near US$10,000/40HQ, around US$9,500/40HQ in actual transactions, that to Pakistan/Karachi was at US$4,300/40HQ and that to Brazil (NAV) was at US$7,200-7,300/40HQ.

Europe and Mediterranean routes: The supply and demand relationship was largely stable. The freight rates fluctuated little recently.

North America route: There was an excess supply of space on this route, and the freight rate dropped slightly.

Shipping companies are planning to adjust up the freight in mid-Jun?

Some consolidators deployed more ships in terms of European route and America route, expecting shipment to be big after Shanghai's lockdown ended, while the shipment was worse than anticipated at first and may be big until mid-Jun.

It was learned that some consolidators are planning to raise price from mid-Jun and the increment may be at least 10% or above, not ruling out to revise up price by collection of additional charges at first. The pressure of increasing price was mainly from the following aspects: firstly, the shipment is estimated to gradually ascend after Shanghai's lockdown stopped. Secondly, insiders worried the strikes of workers at ports in the West Coast of America would impact the global shipping capability. In addition, the port congestion in Europe due to the Russia-Ukraine conflict, soaring oil price, the transportation slowdown of shipping companies in response to the new regulations on environmental protection and the ahead of schedule of peak season and so on were other factors.  

The world's major shipping companies began to evaluate the increase in freight rates. According to industry insiders, as it is the first increase since a series of falls, the increase should not be small, and the time point for the increase is expected to be around mid-June.

Strikes appear in Germany and South Korea, what's the effect?

Local time on Jun 9, Verdi, Germany's largest service industry union, announced that there would be a strike at Germany's five largest ports. In support of the ongoing labor negotiations between the terminal union and the port operator. In addition to Hamburg, Germany's largest container port and Europe's third-largest container port, the German ports of Emden, Bremen, Bremerhaven and Wilhelmshaven were also affected by strikes. There were already 150,000 containers waiting for shipment at German ports, and the strike would further exacerbate the situation.

The strike is expected to increase operational problems and cause more delays and shipping schedule changes, once again affecting all other European ports in Germany, the Netherlands, Belgium, France, the United Kingdom, Poland and so on.

In addition, South Korea also saw intensified strikes. 25,000 freight truck drivers requested that the government freight rate system be extended to guarantee basic wages to cope with rising fuel costs. The price of fuel and the cost of living have soared this year. Truck drivers have to pay more for diesel than ever before, but their freight has not risen, and their income was hit hard.

So far, the impact seemed to be limited, with all 12 South Korean ports operating as usual as of 10:00 local time on Wednesday (8th). HMM, South Korea's largest shipping company, said there were no major disruptions for the time being. South Korean media said that although not all drivers took part in the protest, South Korea's exports of steel, plastics, consumer goods and other goods could slow if the demonstration lasted for several weeks.

Members of the U.S. Congress are preparing to strengthen regulation of international shipping companies

Members of Congress are preparing to tighten regulation of international shipping companies, with the White House and importers and exporters of U.S. arguing that high freight costs are hampering business, pushing up costs and fueling inflation, according to media reports on last Saturday. Democratic leaders in the House of Representatives said they plan to adopt a measure already passed by the Senate next week to strengthen regulatory restrictions on shipping operations and limit the ability of shipping companies to impose special fees. The bill, known as the Ocean Shipping Reform Act, was passed by an oral vote in the Senate in March. The bill passed by Congress has been the largest reform of shipping rules since 1998. The World Shipping Council said it would not comment on the bill until Congress passed it. Stay tuned!

Container marine market welcomes the busiest period? Are you ready?

As the peak season on container marine market comes ahead of schedule, will tight containers appear again? According to recent public data from major ship operators, carriers were trying to add millions of new containers to solve the problem of serious capacity crunch, but as shipping market enters the busiest period, these containers have showed signs of being stuck in the port again. Lee Bridgett, an analyst at IHS MARKIT, believed that demand for containers has far exceeded capacity as supply chains continue to deteriorate, ongoing congestion at other ports around the world and low return rates for containers returning to Asia.

It was estimated that about 12% of the world's container ships stay outside crowded ports for several weeks longer than normal, while inland distribution, especially in the United States, was still hampered by a lack of trains, truck drivers and limited storage space. In Los Angeles, for example, 40% of containers have to be transported by rail, but only about half were loaded every day.

However, there were some good news: After a frenzied jam last year, the number of ships waiting to be unloaded outside the ports of Los Angeles and long Beach has declined sharply. The reduction in containers on the west coast was related to the transfer of carriers to ports in the eastern United States. Some shipping companies increased shipping capacity between Asia and the east coast of the United States by 25% in early 2022 compared with the same period last year. Shippers were increasingly moving to the east coast of the United States to avoid a backlog of ships in Los Angeles and long Beach ports.