You are here: Home / NEWS & INSIGHTS / INSIGHTS / How Much More Will International Shipping Freight Rise?

How Much More Will International Shipping Freight Rise?

Views: 0     Author: Site Editor     Publish Time: 2021-08-31      Origin: Site

casting cable protector-Newland

The outbreak of Delta, the resurgence of the epidemic in the United States and Europe, and the "labor shortage" in many ports around the world have further dragged down the release of global shipping capacity and pushed up freight rates. Some logistics companies in China have also been affected and have to make business adjustments.

casting cable clamp-Newland

Head of International Logistics Company: Yan Yan

Since the beginning of this year, the defects of capacity and the increase in freight rates of the entire market has led to some of our low-value customer groups chose to reduce shipments temporarily to ease the current pressure on the market. In fact, with the overall development of the market, many of our shippers are no longer able to withstand such high freight pressure. All this is due to repeated outbreaks of the global epidemic, which causes a series of squeezing.

under reamed centralizer-Newland

On August 10th, the Global Container Freight Index showed that the shipping freight from China & Southeast Asia to the east coast of North America exceeded US $20,000 per TEU for the first time, which has been at a high level for half a month. Just a week ago, the value was $16000 per TEU on August 2nd.

A report released last month by the Baltic International Maritime Conference(BIMCO) and International Chamber of Shipping(ISC) pointed out that there are about 1.89 million crew positions on more than 74,000 merchant ships around the world. However, the problem of shortage of crews is also worsening due to the epidemic. At present, the gap of crew positions is 26,000, and additional 90,000 crew members will be required to add by 2026. The continuous shortage of crew may threaten the global supply chain.

In the past month, the Baltic Dry Bulk Index BDI index has risen by more than 10%. On July 16th, BDI reported at 3039 points. On August 16th, BDI closed at 3606 points, a cumulative increase of over 160% from the beginning of this year. Last Friday, the index continued to set an 11-year high, reporting 4092 points, the highest since mid-2010.

hinged welded bow spring centralizer-Newland

Chief Analyst of Shenwan Hongyuan Transportation: Yan Hai

This round of the BDI index rise, on one hand, is a transmission of the upward demand for bulk commodities to shipping freight, and is essentially affected by the upward demand for bulk commodities under global currency and fiscal stimuli. At the same time, the supply side is similar to containers, and the efficiency of dry bulk terminals has also declined. In addition, the entire fourth quarter is also the peak season for dry bulk, so essentially grain and coal will be in strong demand in the fourth quarter. Therefore, these series of factors have superimposed and drived on the recent rise in BDI. In terms of seasonality, if the impact of the epidemic on efficiency of the terminal in the fourth quarter is still there, then the BDI index still has space for further upwards.

positive centralizer-Newland

International Logistics-Newland

According to data from logistics companies, starting from the second week of August, the number of global freighters stuck in ports caused more than twice the number of "sea traffic jams" at the beginning of this year, and the shipping supply chain has been strained.

In this round of "super cycle", shipping companies that have made a fortune continue to raise their profit expectations. Maersk's latest semi-annual report shows that the company's net profit reached US$3.732 billion in the second quarter, far higher than US$359 million in the same period last year. This sets the company's best quarterly performance in history. Meanwhile, the company expects the performance of the third quarter will exceed that of the second quarter. However, Maersk also said that due to potential changes in current demand pattern, supply chain obstruction and equipment shortages will still have an impact on the market trend, and the performance in the next few quarters may still fluctuate above normal level.

hinged welded bow spring centralizer-Newland

Chief Analyst of Shenwan Hongyuan Transportation: Yan Hai

In fact, container industry is a very interesting phenomenon. The profitability of shipping companies is indeed inversely proportional to the feedback of customer service quality. In other words, the better the customer experiences, the corresponding is that the position is not tight. The worse the shipping company profits, the tighter the position is. The worse customer experience, the better of the shipping company profits. From this perspective, this is not a laudable virtuous circle. So after this round of the epidemic, actually we are also wondering whether there is a way to make the whole shipping company win-win with the cargo owner. We can see that in fact, Maersk's strategy has changed from simple maritime transportation to land transportation. Therefore, we need to consider how to solve the problem of mismatch between supply and demand in the long run.

solid body centralizer-Newland

According to a Gallup Survey by the US Polling Agency, 83% of Americans have felt that prices have risen sharply in the past two months. 60% of people said that it was difficult to buy some products due to supply shortage recently, another 57% said they experienced serious delays in ordering products. The latest data show that the overall food price rose by 3.4% in the United States, and the price of meat and milk rose by more than 6%.

semi rigid centralizer-Newland


Director of the Institute of Logistics and Supply Chain Management: Wang Guowen

On August 19th, the waiting time for ships at Los Angeles Port was 12.2 days. In the past three or four months, it was roughly two to three weeks or even longer, which has actually reached its limit in ports of North America. However, on the whole, the main port congestion actually still occurs in the destination port. Now the port congestion in the East and west of the United States is most serious. The whole global ocean route will affect the overall turnover efficiency of ships when any port is affected. Therefore, the recovery of the epidemic requires capacity recovery of the entire global supply chain. Any bottleneck and checkpoint in any place may bring fluctuations within the scope of the whole chain.

stamping rigid centralizer-Newland

The World Trade Organization estimates that the total value of seaborne cargo exceeds US$19 trillion each year. Data analysis shows that the growth rate of global maritime trade in the past was positively correlated with the growth rate of global GDP. However, currently the growth rate of seaborne trade is less than the growth rate of global GDP, plus the impact of COVID-19, which means that the current ocean shipping industry is facing new contradictions.

slip on set screw stop collars-Newland

Professor, School of Economics and Management, Chinese University of Hong Kong (Shenzhen)

Former IMF Economist: Zhang Jinfan

Because our supply chain is very long, the stability of supply chain will decline. International trade involves various complicated laws and regulations. If we let this complexity continue to develop, it may cause some risks. When there is no epidemic, we will never imagine it. If your system is complex enough, many unexpected events will happen frequently in the future, which will have an impact on the entire global economy. So now many people are beginning to reflect on whether the supply chain needs to be shortened or diversified. This will be a new trial for international trade.

Article reprinted from NetEase News



    6550 W Sam Houston PKWY. N. #200. Houston, TX 77041
  +1(832)206-5834


   No.73, Western Section, Chao Yang Street, High Tech Zone, Weinan City, Shaanxi Province, China
  +86 171 9131 5281


   6th Floor, Concorde Tower, Dubai Media City, UAE, PO Box 126732
   +9714 454 9771




 Copyright © 2021 NEWLAND INDUSTRIAL CO., LTD. | Sitemap | Privacy Policy |  Terms of Service