Epidemic has caused "a box of hard to find" global container ship freight rates soared by 80%
"Lianhe Zaobao" reported on January 8 that the COVID-19 pandemic has caused global port congestion and “unavailable containers”, which has pushed up shipping freight rates soaring by about 80% within two months. The current rise has not faded.
However, shipping costs generally only account for about 5% of the prices. The industry estimates that the surge in shipping costs is not expected to have a significant impact on the prices of mass consumer products. Some of the Singapore butchers and food importers interviewed said that they had taken into account the rising demand for Chinese New Year goods during the Lunar New Year, and started importing more food last year to ensure sufficient futures sources and stable food prices at the end of the year.
In recent months, the global shipping industry has experienced port congestion, which has led to a shortage of containers, and shipping freight has doubled and soared.
According to the global container freight rate of Drewry, a shipping consulting company, the freight rate per TEU at the end of last year was US$4,359 (approximately S$5752), which is an increase of 75% from the level of approximately US$2500 in October last year. %.
The China Container Freight Index of the Shanghai Shipping Exchange also shows that it has risen 66% to 1,658.58 points at the end of last year from the level of around 1100 points in October last year.
Cai Caibao, founder of ShipsFocus, a Singapore shipping consulting service company, said in an interview with Lianhe Zaobao that container ship freight rates have skyrocketed, and containers are “hard to find”, mainly due to the coronavirus.
He said: "Many ports have adopted stricter import and export restrictions, resulting in longer docking times for ships and reduced turnaround times, which invisibly caused a shortage of containers and soaring freight." However, he pointed out that freight only accounts for about 5% of consumer goods, so Even if shipping costs double or triple, its impact on overall consumer product prices is not significant.
"Besides, many supply chain companies have taken quick measures to deal with the supply chain interruption caused by the epidemic. I believe that port congestion and soaring freight rates will alleviate."
Port congestion is expected to ease in a few months
When asked, PSA said: “The global supply chain has been under tremendous pressure in the past few months. The emergence of this special situation is the result of a combination of many factors, including the surge in consumer goods in global trade and the economic restart. Companies fill up their inventory, drastic climate change affects upstream Asian ports, and the re-blocking of some countries has led to the reduction of downstream port capacity."
The group said that, like many other ports in the world, the port of Singapore, as one of the global hubs, has faced many challenges in recent months. "However, we are actively increasing production capacity and working closely with shipping company customers and their alliances to ease the current situation."
International rating agency Fitch Ratings analyst Sabrina Muller believes that global port congestion will ease in a few months. Once the peak season is over, freight rates will begin to decline gradually from the middle of this year.
She said: "We expect port congestion will be gradually eliminated in the next few months, although this may trigger investment plans by ports and shipping companies. We expect that in the medium and long term, industry players will pay more attention to improving port efficiency and digitalization, and accelerating the adoption of technology. And automation."