Since August, the Chinese shipping market has been facing a shortage of cabins and containers, which has led to a surge in container prices. And as one of our forwarder confirmed that the sea freight increased five times this year! At present, the US line has the highest increase, and the European line has also risen very strongly. Some Chinese container manufacturers said that the current order has been scheduled for March next year.

Textainer and Triton of the world’s three largest container equipment leasing companies said in an interview with the media that the shortage of containers will continue in the coming months.

By December, the shortage of containers began to intensify. At the same time, it was accompanied by other serious problems such as delays in shipping schedules, refusal to accept cargo by ship owners, and port congestion. The situation of European exporters can be said to be worse. Many European countries have successively blocked off, causing some ships to be unable to unload their cargo in time and return to the port. The sea freight on the European, North American, and South American routes have all soared.

Why the container is not enough? 

1, Due to the counterattack of the European And American epidemic, most countries have begun to close their cities again, directly affecting people’s normal work and life, resulting in cabinets stuck in major ports.

China is suffering a great dearth of shipping containers due to a big imbalance in global trade, exacerbated by the Covid-19 pandemic, which has led to containers full of goods leaving China and then not returning.

2, Peak season of order export.

As Christmas and Chinese New Year are approaching, the export volume in previous years was relatively large at this stage, and this is also the case this year.

Some orders from Southeast Asian countries have also been transferred to China for production, which has increased China’s share of global exports. The China Container Industry Association said the COVID-19 pandemic’s impact on production in countries around the world and the nearing of Christmas, a peak season for export of Chinese products to Europe and the United States, were part of the reasons for the shortage of containers.

Why sea freight sharply increase?

1, Big loss in the early.

Storage fees and demurrage incurred during this period are also a huge expense. Under this circumstance, with the gradual recovery of demand, no shipping company is willing to continue operating at a loss, and freight rates naturally soar.

2, Increasing an extra charge

Container shipowners have nominated further surcharges and rate increases for Asia-to-Europe routes in the final weeks of the year as a shortage of boxes in Asia outpaces the slowdown in export shipments.

As early as July, the world’s largest shipping company CMA-CGM announced that it would increase the FAK cost of its 40-foot container from US$100 to US$2,300 from August 1st, and launch a peak season surcharge of US$200 TEU in July.

As 2020 enters the end of the year, major shipping companies will issue further notices of price increases in 2021, and the increase has reached a new height! Hapag-Lloyd will implement a general mark-up (GRI) for goods from the US and Canadian ports to Australia and New Zealand, effective from December 15, 2020 (origin receipt date). In addition to Hapag-Lloyd, Maersk and other shipping companies have also issued the latest price increase notices.

3, Labor shortage

It has become a problem to recruit a basic number of seafarers worldwide. Seafarers’ wages have also risen sharply this year, which has also increased shipping costs to a certain extent.

Tips solution

Gao Feng, a spokesman for the Ministry of Commerce of China, said on December 3 that China will increase container supply and strengthen monitoring of the shipping market to further stabilize the rising logistics costs in international trade.

Chinese container manufacturers have extended their normal working hours from eight hours to eleven hours, and have started producing 300,000 20-foot equivalent units every month since September.

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