Market situation – Container flows – Update IV

In order to provide a clear overview, we have broken the market down into several segments covering different areas worldwide. Although not all trades are in the report, similar trends apply.

Asia

The final Shanghai Containerized Freight Index (SCFI) for 2020, published on December 31, recorded a staggering 190% gain over the year on global trade lane averages. The spot rate from Asia to North Europe has leaped by almost 300% year on year!!

The Loadstar, a publisher of articles on transportation and logistics, was told by shippers that they are paying USD 16,000.00 / 40’ to guarantee shipment in the second half of January. Referring to the earlier customer update, this is causing several shippers to postpone their scheduled shipments until after Chinese New Year, only fueling rumors that the pricing ex Asia will uphold well beyond Chinese New Year. On the Transpacific trade, the rates have flattened out somewhat, so it seems that the maximum level has been reached. To Latin America East Coast, the market has seen the biggest change in rates of all major trades. Last year, the spot rate in the summer was a meager USD 400 / container. This week the spot rates between Shanghai and Santos went up to well above USD 8500 / TEU!

United States

The U.S. trucking industry has been extremely stretched due to the impact of COVID-19 on labor availability, and the lack of chassis. The situation is only becoming more problematic. In addition to the driver and equipment shortages, huge growth in volumes globally as well as terminal congestion at the ports are impacting haulage operations and timely deliveries. Long hauls are particularly difficult to secure. To meet preferred loading and unloading dates, the trucking companies are asking for a window of 4 weeks or more. Short(er) hauls are easier to fix. The time window for these transport moves is between 1 and 2 weeks.

Europe

Traditionally, prior to the Chinese New Year, volume moves from Asia to the world peak. This is also the case for Europe. This is putting massive pressure on the terminal operations. Even the big terminals are getting massively congested. As a result, MSC has discharged a vessel with cargo from the Far East destined for Belgium in Zeebrugge instead of in Antwerp at its own MPET terminal. The U.K. entered a full lockdown for at least seven weeks from January 5, as the new variant of the virus is causing more infections, although they are vaccinating people on a huge scale. We will only be able to determine the impact of the lockdown on infections, and on the cargo volumes, in the next weeks. In the U.K. ports, shipping lines were already facing heavy congestion, and with no improvements expected in the near future, 2M and THE Alliance have announced that they will no longer call at Felixstowe but discharge their U.K. imports at alternative European ports instead.

General

The current high pricing on a global scale seems unlikely to end in the coming weeks. Chinese New Year is now seen as the turning point. However, it is expected that even in the period following Chinese New Year, the rates will not go down significantly due to the ongoing equipment shortage in almost all exporting areas. It is difficult to predict when the market will come back to acceptable levels. We will keep a close eye on future developments.