Sea freight skyrocketed and ships were hard to book

As the market continues to roll in, the profits of foreign trade have been pressed very low, and recently there have been many “black swan” events, which make the original not rich days even worse.

Many textile people have said that the sea freight, exchange rate, a profit is gone, do not dare to transport goods, want to transport also can not book a ship!

Exchange rate crash

Under the impact of the strong dollar, Asian currencies are suffering an unprecedented storm of depreciation. No matter the yen, Indian rupee, Korean won and other major Asian economy currencies, or the Indonesian rupiah, Vietnamese dong, Philippine peso and other small ASEAN currencies, have suffered a new round of selling pressure. Some currencies hit multi-month or even all-time lows.

In addition to Asian currencies, currencies in Europe, South America, Africa and other countries have also suffered varying degrees of depreciation.

The minutes of the Federal Reserve’s May monetary policy meeting, released on Tuesday, showed that it would take longer than expected to be confident that inflation had sustained moderation due to disappointing inflation data and strong economic growth in the first quarter.

Officials at the meeting noted that components of US goods and services prices had risen markedly recently and that there had been a “lack of further progress” towards the Fed’s 2 per cent longer-run inflation target. Demand growth needs to slow if the inflation target is to be met.

Still, Fed officials believe the current level of the federal-funds rate is sufficient to dampen economic activity and bring inflation down, with the potential for inflation to return to its long-run 2% target, suggesting the central bank will continue to hold rates steady.

Raise the price

Since the end of April this year, we can feel the freight rates of routes to Latin America, Europe, North America, the Middle East, India and Pakistan and other regions have risen, and the increase is more obvious in May.

According to the Shanghai export container comprehensive freight rate index released by the Shanghai Shipping Exchange, the index has continued to rise since the beginning of April 2024. Data released on May 10 showed that the Shanghai Export Container Composite freight Rate Index stood at 2,305.79 points, up 18.8% from the previous week, 33.21% from 1,700.98 points on March 29, and 132.16% from November 2023, before the Red Sea crisis broke out.

Among them, South America and European routes rose the highest. The freight rate (sea freight and sea freight surcharge) for exports from Shanghai port to the basic port market in South America was US $5,461 /TEU (20-foot container, also known as TEU), up 18.1% from the previous period and 95.88% from the end of March. The freight rate (sea freight and sea freight surcharge) of exports from Shanghai port to the European base port market was US $2,869 /TEU, up 24.7% from the previous week, 43.88% from the end of March, and 305.8% from November 2023.

Data released on May 10th by Drewry World Container Index (WCI), a shipping research consultancy, also showed that the Drewry World Container Index (WCI) rose to $3,159 per FEU (40-foot container) as of May 9th, up 81% from the same period in 2022, That’s 122% higher than the 2019 pre-pandemic average of $1,420 /FEU.

Insiders revealed that, in addition to the objective problem of insufficient transport capacity, this wave of shipping prices are not without shipping companies’ “rising tide” : Maersk, Da Fei, Hebberot and other head shipping companies have issued a price increase letter.

Maersk announced that it will increase FAK rates on the Far East to Northern Europe routes from June 3, from $2,825 to $2,975 per 20-foot container, and from $5,500 to $5,900 per 40-foot container and tall container. Cma CGM has announced an increase in FAK rates from Asia to Northern Europe starting June 1st, with an increase of $500 to $3,200 for 20-foot containers and $1,000 to $6,000 for 40-foot and 40-foot tall containers.

Lack of box

According to the global shipping market dynamics released by Kuexun, the world’s largest shipping forwarding company, on May 9, after the May Day holiday, the overall shortage of container sources has not been significantly improved. Major shipping companies have different degrees of shortage of containers at the main ports of departure, especially large and high containers. Some shipping companies continue to strengthen the control of the use of containers in Latin America routes; Even as new ships continue to be delivered, there are fewer empty vessels available for charter, and charter rates for ships above 1,700 TEUs are rising sharply; The new Chinese-made containers are fully booked by the end of June. Given the current situation, freight rates will remain firm in the near term; At the same time shipping companies have been brewing a new round of freight rates push up.

A Shenzhen freight forwarder said that before and after the May Day shipping space, cabinets are tight. On the one hand, as China develops the South American market, shipping companies have transferred the main transport capacity to the South American route, resulting in a shortage of shipping space in Europe. In addition, it is necessary to take a detour to the Mediterranean and Red Sea in Europe, so many cabinets cannot come back, which aggravates the shortage of shipping space. As for whether the rush for boxes will be set off again, there are signs that south China has no problem accepting different suggestions, and some ports are seriously short of boxes. On the whole, the freight forwarding industry is making more money now than in the off-season, but it is not up to the crazy level of 2021. Whether it can rise to the peak season Christmas depends on the development of the international situation, at least for now, it is unlikely to look at the freight rate of the airline.

Shipping supply and demand pattern is expected to reverse in the fourth quarter recently, a number of shipping giants issued announcements, announced to increase shipping prices, many routes increased by about $1,000 to $2,000. Freight forwarders said shipping prices on African routes jumped $2,000 to $3,000 a week, and some positions needed to be booked up to a month in advance. In the first four months of this year, exports of newly built domestic containers increased sharply. The shipping market is hot, and many ship owners add containers to increase capacity. Industry insiders believe that with increasing capacity, shipping supply and demand pattern is expected to reverse in the fourth quarter.