On the 10th, a reporter from the First Financial Daily checked the global container freight index launched by the Baltic Shipping Exchange and Freightos, showing that while the freight indexes of other routes have almost no changes, the shipping prices on China/Southeast Asia-Nor

A business employee who has been engaged in import and export trade for a long time lamented to the First Financial reporter that sea freight prices have soared since this year. As a shipper, "grabbing boxes" has been exhausted, and more expensive prices do not necessarily represent a better result. It is still a delay.

Tsinghua University Sino-US Relations Research Center Senior researcher Zhou Shijian told the First Financial reporter that in the first half of this year, containers sent by China could not be recycled in time, causing container prices to generally soar; with the recovery of the global economy in the second half of the year, freight rates continued to rise.

Urbank , Vice President of the China World Trade Organization Research Association, said in an interview with the First Financial reporter that the shipping price from China to North America has now risen to more than 20,000 US dollars, which is already a historical high. This is mainly affected by the epidemic. Some shipping companies may encounter obstacles in the suspension of terminals. In addition, there are also problems in shipping terminals in some countries. These factors have accelerated the compression of capacity on certain routes. The sharp rise in shipping prices is also related to the US dollar, and the increase in commodity prices was also obvious some time ago. The fluctuations in the US dollar and the epidemic will have a certain impact on freight rates.

How long will it take for sea freight prices to continue soaring under the epidemic? Is there any way to crack it?

Delta spread aggravates "one box is difficult to find"

Global container freight index shows that the shipping price on the east coast of China/Southeast Asia-North America exceeds US$20,000, up more than 500% year-on-year from a year ago. A reporter from the First Financial Daily saw that on the 2nd, the shipping fee for the route was still around US$16,000. Currently, the shipping fee between China and Europe is fixed at nearly US$14,000.

Why has the shipping price surged again recently? There are signs that the delta mutant strain ravages the world, causing the epidemic to rebound in many countries, which has led to insufficient loading and unloading personnel at major foreign ports, which has generally slowed down the container turnover time. The container recycling rate is low when the container clearance time becomes longer, and the phenomenon of "hard to find a box" is even more serious.

According to the latest data from shipping consulting agency Sea-Intelligence, the time it takes for a container to be loaded and unloaded from a ship to a dock train is 18 days in Seattle , two weeks in Auckland and more than a week in Port Savannah.

analysis shows that shipping delays absorbed 25% of all transPacific capacity, while demand soared by 25% over the same period.

Sanne Manders, chief operating officer of Flexport, a freight forwarding company headquartered in San Francisco, said that the transportation time from Shanghai via Los Angeles/Long Beach Port to Chicago (including cargo transit and ship voyage at the departure point) has more than doubled from 35 days to 73 days.

"This means that a container takes 146 days to cycle back to its origin for reloading, reducing the effective capacity of the container by 50%." Manders said.

Huo Jianguo said that the rapid growth of shipping prices is also related to the monopoly of shipping by some overseas companies. "We have many ships, but our ships are rented to these companies, and they control the freight rates, and the freight rates are under great pressure. Because now, the large shipping companies are basically in the hands of Europe and the United States, and our control capabilities are limited," he said.

Zhou Shijian also reminded reporters that the epidemic directly affects seafarers. "Before, due to the epidemic in cruises and other aspects, many people will not come out to be seafarers when they can live a decent life," he said.

It is worth pointing out that with the arrival of the shopping peak season, carriers will start charging port congestion fees and surge demand fees, while limiting intermodal bookings.For example, starting from mid-August, container shipping company Hapag-Lloyd will charge a surcharge of US$5,000/FEU for goods traveling eastwards, and other carriers will also charge similar fees.

's soaring container rates in turn result in higher containership charter fees, forcing shipping companies to prioritize services on the most profitable routes. "Ships can only make profits in industries with higher freight rates, which is why capacity is mainly transferred to the United States," said Tan Hua Joo, executive consultant at Alphaliner, a maritime consultant. Philip Damas, managing director of Drewry, a maritime consultant, also saw that some shippers have reduced the volume of low-profit routes, such as transatlantic and intra-Asia routes.

"These factors have turned global container shipping into a highly confusing, undersupply seller market , where shipping companies can charge four to ten times the normal price." He said that it has not been seen in the shipping industry for more than 30 years, and this "extreme rate" is expected to continue until the Chinese Lunar New Year in 2022. How extreme can

be? Craig Grossgart, senior vice president of maritime affairs at

Super International Freight Forwarder, told a story at a press conference in late July: a shipping carrier told a company that it would cost $32,000 to ship a standard container from Shanghai to Los Angeles.

Granted, the offer is an outlier—mainly for customers who require a large number of backlogs to move at one time, but this example can also illustrate what kind of despair some shippers are in now and how strong the carriers are now.

North American consumption enthusiasm is high, and transportation capacity is difficult to improve

Data shows that North American consumers continued to maintain the "buy, buy, buy" model in the first half of 2021.

Data from the U.S. Bureau of Economic Analysis says that by May 2021, consumers’ spending on durable goods will be 25% higher on an annual basis than in 2019.

In the sub-indicators of the newly released second-quarter GDP (GDP) data in the United States, personal consumption expenditure also contributed significantly, with personal consumption expenditure increasing by 11.8% in the quarter.

The current consensus among the executives of the shipping industry is that the problem of tight transportation capacity will not be alleviated until February 2022.

Freight Right Global Logistics founder Robert Khachatryan believes that unless consumers do feel inflationary pressures or external events cause the economy to slow down, the current situation will not be alleviated.

"In May, we were already shipping Christmas products. Whenever there were spaces, someone would try to ship their products to the United States," Kazayan said. "They won't wait until September."

"It's not even a shipping problem, it's an infrastructure capacity problem," he added. "Long before we entered the peak season, the capacity of Los Angeles Port was already overloaded, maintaining around 160%, and even if the ships were added, the problem wouldn't go away. So only when demand fell Only when the price of 60% to 70% can you see real improvement. "

Huo Jianguo believes: "(price) is easy to go up and difficult to go down, it rises quickly and falls slowly. The earliest shipping price of this route before the epidemic was about US$6,000 to US$7,000. Now it rose to US$15,000 in the previous period, and now it has exceeded US$20,000, and to the level of US$22,000 and US$23,000. This is indeed a bit outrageous. But this is determined by the supply and demand relationship. There are many freight orders, and there are also shortages of containers."

Huo Jianguo analyzed to the First Financial reporter: "The shortage of boxes is because of us The terminal operation of the destination may be slow. Shipping companies cannot bring empty boxes back normally. Therefore, this is equivalent to a price increase in the box and sea freight. I estimate that a sharp decline in prices cannot be achieved in the short term, but there will be a process of gradually falling after stabilization. The epidemic is under great pressure now, and various companies and units are actually trying to expand profits by raising prices, and they also want to take the opportunity to make a profit."

Some analysts pointed out that even if the growth of consumer demand ends, inventory will always be at a historical low. In other words, replenishment behavior will continue to promote trans-Pacific trade.

The American Retail Federation predicts that imports from U.S. ports will surge before the traditional peak season in August, and many industry observers have also seen importers placing orders early to avoid delays in holiday goods.

FreightWaves's shipping market expert Henry Byers predicted that this would result in the longest waiting time for ships since early February: 25 to 40 ships were waiting in line for eight days just for a berth.

Super International Freight Forwarding Company urges customers to book with carriers eight weeks before their scheduled departure, as more waiting time will be added every week.

The aforementioned person engaged in import and export trade business told the First Financial reporter that this requires very accurate planning of the future container booking volume and accurate communication with the factory. After the booking is opened, the freight forwarder will stay up late to determine the booking situation with the US customers, "It is to compete for speed and character."

has a conditional note on the logistics supplier website that shows that retailers who need to put their products on the shelves by November 1 should ensure that they ship the products to the East Coast destination by August 21 and ship to the Western destination by September 3.

Kazayan and predict that importers may start ordering earlier in the future. “So that’s why we don’t think there will be a slowdown next year, and maybe even no: they may order Christmas in March next year.”

At present, sea freight analysts generally expect sea freight rates to rise further in the coming weeks, and as trade growth exceeds the number of fleets, there will not be much relief in the supply of ships until new ships are launched in 2023.

Jason Chiang, director of Ocean Shipping Consultants, a marine consulting firm, admitted: "Every time you think (the price) has reached equilibrium, something happens to make the shipping company raise the price."

He also said that new capacity orders exist, and are almost equivalent to 20% of the existing capacity, but these capacity will be online as soon as 2023, so there will be no significant increase in supply in two years.

Is there a way to crack the surge in shipping prices? Huo Jianguo told the First Financial reporter that before the epidemic, the world's freight volume and container quantity were basically balanced, and even before the epidemic, the orders for ships were declining, and the sales of boxes were relatively difficult, which shows that demand was saturated at that time. "The epidemic has caused a sudden shortage of supply, and box export orders may be good in the near future, but this is still unsustainable. Because the price increase is a short-term factor, not a long-term factor, and the price will settle one day. If you go to build a ship now, and the ship is built in three years, the shipping fee may also be reduced, so you cannot do a long-term emergency now," he said.

But Huo Jianguo also said: "(now shipping prices) companies still have the possibility of bargaining. Depending on different routes, shipping companies must have a bargaining process. Because the determination of prices is actually a factor at both ends. If you can put some pressure on shipping companies, it may at least suppress the momentum of crazy price increases."