Chinese ports eased, and freight declined on trans-Pacific routes

According to reports says ,Congestion at Chinese ports has been greatly eased, while congestion at US ports continues.Since the beginning of this year, shipping prices have risen in magnitude, momentum, and scope as never before. At present, "freight is comparable to cargo value", "a container is hard to find," and "shipping jams and stranded at sea" seem to have become the new normal in the shipping market. Recently, delays caused by congestion in US ports have become more serious.

According to data from shipping data provider eeSea, 153 container ships berthed in Shanghai and Ningbo ports on September 24. As of this Monday, 81 container ships berthed near these two ports, a decrease 47% in only two and a half weeks. The reason may have 2: one is for typhoon influenced, another is measures for factory power rationing affects China’s export freight volume.

Richard Fattal, chief commercial officer of Zencargo, a digital freight forwarding company based in London, said that the freight rate from Asia to the West US was as high as US$18,000/FEU, but has now dropped to US$11,000/FEU; the rate to the East US has also decreased. , Currently maintained at 18,000-20,000 US dollars/FEU. Shifl’s data also shows that the Pacific route has dropped from US$17,500/FEU to US$8,500/FEU.

As Chinese manufacturers have reduced production, weaker market demand has led to a decline in freight rates on some routes. However, it was said that the reduction in Chinese factory output means that manufacturing orders from the United States and the European Union cannot be completed on time, orders will be backlogged, inventory shortages and price increases will be more pronounced. And congestion still exists, and recently there have been signs of spreading from North America to Europe. On the west coast of the United States, the decline in Chinese exports eased the congestion in the Ports of Long Beach and Los Angeles, but the ship's waiting time was still as long as two weeks. The latest data from the Southern California Maritime Exchange shows that 59 container ships are on hold, which is lower than the peak of 73 ships on September 19.

With the increasing market demand and factors such as port congestion and insufficient capacity, the shipping market has maintained a prosperous state this year. Shipping companies have made substantial profits and port companies have also achieved a better pace of development. However, foreign trade businesses that rely on shipping are facing unprecedented difficulties.

Under this unpredictable price trend, some shipping companies have also begun to offer discounted prices. The scalpers who had previously stockpiled and speculated were also eager to sell their inventory, which further promoted the decline in prices. However, the current downward trend in shipping prices has not been fully developed, and only some routes have this situation.

At the same time, the congestion problem that caused the increase in shipping prices has not been resolved. China’s shipping industry survey shows that serious ship port congestion is the main reason for the steadily increasing dry bulk freight rates, which has significantly reduced the effective capacity of shipping companies. If port congestion will continue, the dry bulk shipping market may continue to increase. There is a new round of rising prices.

Sea-Intelligence, a shipping analysis and consulting agency, released a report to evaluate the impact of congestion and ship delays on shipping capabilities deployed globally. The report shows that due to congestion and ship delays, 12.5% of the global capacity is unavailable, which is equivalent to reducing a fleet that is slightly larger than that of CMA CGM or COSCO.

Relevant agencies predict that at least until the end of 2022, shipping congestion can be eased and normal. At the same time, Drewry raised his expectation on the average global freight rate. It is estimated that the overall pre-interest and tax profit of the container shipping industry this year will be as high as 150 billion U.S. dollars.

According to Sea-Intelligence reports, in August this year, 12.5% of the global capacity was reduced due to congestion and delays, which means that the global capacity of 3.1 million TEUs could not be used due to congestion and delays.

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