Shipping container explosion! One container in Chinas ports is hard to find and may last until next year

category:Finance
 Shipping container explosion! One container in Chinas ports is hard to find and may last until next year


Benefited from the strong market demand, the freight of container ships is also rising. An employee of a freight forwarding company told the first finance and economics reporter that in recent weeks, container freight rates of major shipping companies have increased day by day and week by week, especially by the most popular European and American routes.

This is the container terminal of Yangshan Port in Shanghai on November 3. Xinhua News Agency

For example, he said, the container freight rate from Shanghai to Los Angeles in the United States has skyrocketed from about $1200 in March to $4000 in November, and this price will go up as Christmas approaches..

Chinas container availability index fell to its lowest level this year

How serious is the congestion of shipping containers worldwide?

Florian Frese, a spokesman for containerxchange, a platform that provides shippers with traceable container sources, said in an interview with first finance reporter that 40 foot containers are in extreme shortage, and the demand for such containers has not been so tight before.

Our monitoring data show that almost three-quarters of the 40 foot containers have been shipped, so it is difficult to find empty containers. In addition, compared with last year, the 20 foot common dry cargo container (20dc) and the 40 foot ordinary dry cargo container (40dc) are also extremely scarce.

The container availability index (CAX) developed by containerxchange can quantify the container availability of major ports in the world. According to the index, at present, there is a serious shortage of 40 foot container containers in Shanghai port, which is only 0.07, the lowest level recorded this year. The same period last year, the monitoring showed that this value was 0.69.

40 inch high container container at Shanghai port in deficit (provided by containerxchange)

Current availability of 40 inch high container containers at Shanghai Port compared with the same period last year (provided by containerxchange)

It is worth noting that this is not only a phenomenon unique to Shanghai port. According to containerxchange data, the usable index of 40 foot container is only 0.17; that of 40 foot container is 0.23; and that of 20 foot container is 0.14. All of the above data are lower than the same period last year.

The scarcity of domestic port containers directly leads to a sharp rise in freight rates of major ports.

The superimposed effect of trade imbalance and epidemic situation

At present, most containers are concentrated in European and American ports. For example, the port operation in California of the United States is in a state of paralysis. Due to the delay, more containers are piled up, resulting in the empty container crisis in Chinese ports. She also pointed out that at present, the demand in Africa and South America is also very strong, but some containers are not of the size required for the transportation of the goods, so it is not easy to find the right size of boxes in the current situation of general shortage of containers.

Chen Yang also believes that the current empty sea containers are mainly concentrated in the United States, Europe and Australia.

Chen Yang told the first finance and economics reporter that the large congestion of shipping containers has a great relationship with the current international trade imbalance. Originally affected by the epidemic, at the beginning of this year, many analysts thought that the freight market might lose tens of billions of dollars this year, Chen Yang said. But in reality, such a situation did not happen. Since June, demand in Europe and the United States has soared, which is unexpected.

Why cant containers from China or Vietnam come back after they are assembled in European and American ports? Fraser believes that this is the delay effect of the stagnation of the sea transportation in the previous months, the interruption and delay of shipping caused by the epidemic have seriously disrupted the normal rhythm of the circulation of empty containers in international trade.

Chen Yang also believes that although the number of containers received by European and American ports has soared in the past few months, the epidemic has led to a decline in port operation efficiency. For example, at present, most of the containers sent from Asia to the United States are concentrated in California, New York, New Jersey and other places. These local governments have adopted relatively strict anti epidemic policies, so port workers and truck drivers have reduced their work, and container trailers are also inadequate. The speed from ports to inland factories has also slowed

At present, Europe and the United States are experiencing the second wave of epidemic, and the phenomenon of port shortage of workers and vehicles is everywhere. In addition, the data show that due to various factors, the ships punctuality rate has dropped from 85% to 90% in June to 56% in September, with an average delay of five days, and the punctuality rate continues to decline.

The latest report from seaintelligence, a shipping consulting company, showed that the global ship shift rate fell to a record low of 52.4% in October.

In addition, Chen Yang also pointed out that the new coronavirus has been frequently detected in cold chain containers returning from Europe and the United States recently, which has also aggravated container congestion to a certain extent.

Container companies try to overcome empty container crisis

In response, Fraser said that in the current epidemic situation, the key factors to maintain competitiveness are: first of all, increase transparency and flexibility. With the scarcity of equipment, people begin to look for alternatives. The popularity of SOC container and the more effective advantages of online trading platform are embodied.

The so-called SOC box is the cargo owners own container. An employee of a state-owned enterprise told the first finance and economics reporter that the company had previously sent the goods to Africa in the form of 20 SOC boxes, but due to the high freight rate of the shipping company, the company decided not to transport back the self purchased containers temporarily, but to use them as warehouses and other temporary use locally.

Chen Yang said that in fact, at present, the major shipping companies are trying to overcome the shortage of transport capacity, but deployment of container ships to and from the sea is obviously not as simple as deploying taxis. He told the first financial reporter that data provided by alphaliner showed that during the period of the most serious epidemic in the first half of the year, in order to reduce costs, the container shipping capacity of the world was suspended by 11%. It will take some time to activate these ships, which are either cold idle or hot idle.

In addition, in order to catch up with the shipping date and ship empty containers from Europe and the United States back to Asia as soon as possible, many shipping companies have tried not to take back the cargo, according to the first financial reporter. For example, the current grain export season in the United States coincides with the peak season. Due to the fact that it takes about two weeks for containers to get in and out of the inland area, coupled with the fact that grain is a heavy cargo, which affects the ships loading capacity, the German heberot shipping company has publicly announced that it will stop collecting grain. Most other companies choose to reject full containers in actual operation. In this unprecedented container supply chain crisis, large container leasing companies saw business opportunities and said that the demand will remain strong in the coming months. Orders from the largest container manufacturers are also higher than ever. In this regard, Chen Yang warned that investment containers should not be too optimistic, beware of the bubble. He was bearish on long-term value investment. If the situation stabilizes next year, containers may face a surplus situation. We dont think its going to ease in the next few months, Fraser said. But as the benefits of vaccine development continue to spread, maybe next spring the hard to find box will improve. International trade in goods will be normalized. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931

In addition, in order to catch up with the shipping date and ship empty containers from Europe and the United States back to Asia as soon as possible, many shipping companies have tried not to take back the cargo, according to the first financial reporter. For example, the current grain export season in the United States coincides with the peak season. Due to the fact that it takes about two weeks for containers to get in and out of the inland area, coupled with the fact that grain is a heavy cargo, which affects the ships loading capacity, the German heberot shipping company has publicly announced that it will stop collecting grain. Most other companies choose to reject full containers in actual operation.

In this unprecedented container supply chain crisis, large container leasing companies saw business opportunities and said that the demand will remain strong in the coming months. Orders from the largest container manufacturers are also higher than ever.

In this regard, Chen Yang warned that investment containers should not be too optimistic, beware of the bubble. He was bearish on long-term value investment. If the situation stabilizes next year, containers may face a surplus situation.

We dont think its going to ease in the next few months, Fraser said. But as the benefits of vaccine development continue to spread, maybe next spring the hard to find box will improve. International trade in goods will be normalized.