Asia Capacity Issues and Record Container Pricing

15 Sep Asia Capacity Issues and Record Container Pricing

An interesting article supplied by Gary Sanderson (Business Development) John S. James Co. USA and commented on by Mike Wong (General Manager) CL International Forwarding Agency Co. Ltd. China

Asia-US rates are still soaring per the Shanghai Containerised Freight Index (SCFI). While the rise has been unpredicted, there are some points to note:

• Asia to USWC heading towards $4,000 per FEU
• Inactive fleets down from 12% in May, to 3.4% at September start

• Asia to USEC & USWC GRI increase avoided after Chinese government requested cancellation from specific steamship lines

• Less China imports, less empty containers for exporting
• Ranking by revenue puts Shanghai-Los Angeles in top spot

Please watch 

Mike Wong

“The Chinese government had stepped-in to request COSCO and OOCL cancel the GRI”

This happened on last Friday (11th September 2020).

• Less China imports, less empty containers for exporting

Regarding this point about empty equipment shortage in China, I have a full picture explanation for clients. Maybe it is useful for us to understand.

1. COVID-19 has nearly disappeared in China for 3-4 months. All factories have been resuming working for in this period. Supply of cargo ex China has been fully geared up.
2. Trades between China and US/Europe/Latin America/Middle East/Africa are very strong. Demand of shipping space & equipment is very high. This point can be reflected by the ocean freight from China to all countries. (Comparing with the rate in Apr, current ocean freight to US: Triple; To Europe: Increase by 50% ; To Mexico and other west coast countries of South America: Triple; To Middle East: Double…..etc)
3. Serious flooding happened in May-Aug in many inland cities of China which are also industrial hubs. Then, many factories in inland cities request additional equipment usage time. This slow down the turn over of 40’HQ in China.
4. Several container vessels (So far as I know, Maersk & ONE admitted) were found  sailors with COVID-19 when the vessels arrived China ports (Ningbo, Shanghai and Shenzhen also have similar cases). China government treated them very seriously. If a vessel is found COVID-19 there, the whole operation of that vessel will be delayed by 14 days+. This also slowed down the whole operation in container terminals and triggered terminal congestion.”