Global port of plug, Forwarder increase prices to push freight rates to record highs

Recently, at the monthly economic talks on the theme of "International Logistics and Shipping Situation" held by the National Economic Center, Dashan Jia, the deputy dean of the Institute of Water Transport Sciences of the Ministry of Communications, pointed out that in terms of tonnage, compared to 2019,global shipping demandwill beincreased by 4.4% in the year of 2021, while container demand increased by more than 5%.  

In terms of capacity, compared with 2019, the size of the global maritime fleet will increase by 4.1% in 2020 and is expected to increase by 3% in 2021.

He pointed out that compared with 2019, global shipping demand this year is expected to increase by 1%, container growth by 5%, while the size of shipping capacity and container supply will grow by 7.1% and 7.4%, respectively. There has been a significant rise.

In his view, the rise in container ship rentals, seafarer costs, intermediary fees, and oil prices have all contributed to the surge in shipping costs.

Xiaoming Song, deputy general manager of Guangzhou Port Group, introduced that the current global container shipping capacity is 24 million TEU, and the container reaches 48 million TEU. In the first half of the year, the capacity from China to North America and Europe increased by 55% and 30%. However, the “difficult to find one cabin, and the difficulty of finding one container” continued to intensify.

In Xiaoming Song's view, the fundamental reason for the lack of capacity lies in the inefficiency of the capacity caused by the port clogging and the shortage of seafarers.

At present, the average congestion time of basic ports in Europe is 3 to 5 days,that US West ports is 10 to 12 days, and US East ports is about 7 days. Recently, Asian ports such as Yantian Port and Ningbo Port have also experienced congestion.

In addition, he emphasized that it is necessary to be alert to the problem of freight forwarders' price increases, which push up the entire shipping price.

Since the Ministry of Transport of China has strict management of shipping prices, the prices of all routes and various surcharges need to be reported to the Shanghai Air Exchange, so the basic charges of shipping companies are not too high.

However, the layer-by-layer price increase of the intermediate freight forwarders has caused the prices to increase exponentially, which has caused considerable pressure on logistics costs for the exports of manufacturing enterprises.

Freight has skyrocketed, Ministry of Commerce: Measures have been taken

Since the outbreak of theCovid-19epidemic, the logistics cost of related shipping has soared by more than 10 times. In addition, the second half of the year is the peak season for shipping, with strong demand and insufficient capacity, and shipping prices have soared. Some sellers said that comparing the overall cross-border logistics freight rates in July and August, the increase has been close to 50%.

High shipping costs squeeze seller profits. Some sellers said that due to the soaring freight, they have already “ship one order,loss one order”, even so, it is still "hard to find a container." At present, some freight forwarders have refused to accept low-value goods.

According to the analysis of many industry insiders, the situation of high ocean freight rates is very likely to continue until next year.

A few days ago, at a regular press conference held by the Ministry of Commerce, the spokesperson of the Ministry of Commerce Feng Gao said: “The Ministry of Commerce has worked with the Ministry of Transport, the Ministry of Industry and Information Technology, the State Administration of Market Supervision and other units to increase container supply and enhance shipping Active measures are taken in terms of transportation capacity and strengthening international cooperation."

Local governments have also increased their shipping service guarantees for small and medium-sized enterprises to help them reduce costs and losses.

The Ministry of Commerce also stated that it will continue to work with relevant departments and localities to further study targeted measures, do a good job in stabilizing foreign trade and smooth international logistics, strengthen cooperation with various trading partners, and work together to cope with challenges.

The Ministry of Commerce has stated that it is believed that other local governments will also take action in the future.

However, high shipping prices and port congestion have become a global problem, and sellers still need to be more prepared.