The European line's freight rate had set a record, and the U.S. line will be blocked for half a year! Shipping before the Spring Festival is difficult, difficult, difficult!

European line contract price set a record

The 2022 long term contracts for European routes had been signed recently. The relevant shipping companies said that in the past, the European routes were all relatively loose contracts. Now the global shipping industry is a seller’s market. Shipping companies had substantially increased the long-term contract price by 2.5 to 5 times. For example, Hapag-Lloyd required three years for a sign, and it is very persistent; while Maersk did not sign long-term contracts for general customers, and the binding clauses of the new contracts had also increased significantly.

Shipping data consulting company Xeneta (freight comparison analysis platform) said that based on the first batch of data obtained from its shipper users, most contracted freight rates in 2022 will be reached "at a record high level." According to Xeneta, the average price of long-term contracts in the Asia-Northern Europe region signed in the past three months was US$11,900/FEU, while the contract price of a 40-feet container in 2021 was only between US$2,000 and US$4,000, a significant increase from the contract price in 2021, The increase reached 2-5 times.  

In addition, some insiders said that many shipping companies refused to provide any short term contracts for freight forwarders and non-vessel carriers (NVOCC) on the Asia-Northern Europe route, and even the contracts provided recently had only two weeks of validity. A British non-vessel carrier revealed that the shipping company had been looked for reasons to delay the progress of the contract negotiation, and "never talk about the content of the contract next year". Except for the spot price, no shipping company was willing to provide or perform the contract, almost " Everyone said to wait until after the Spring Festival to talk."

The U.S. line will be blocked for half a year

The Port of Los Angeles is the largest and busiest container port in the United States. Its import volume in 2021 was expected to "reset historical records", reaching approximately 5.5 million standard containers, which was 13% more than the highest record set in 2018.

Although the Port of Los Angeles had been operating in all weather mode for more than two months, the port congestion problem had not been alleviated. The Associated Press reported that at this stage there were more than 70,000 empty containers parked at the Port of Los Angeles wharf and other sites in the port. In the long run, it will become increasingly difficult for new incoming cargo to be transferred to trucks and trains.

There were still a large number of cargo ships stranded at the Port of Los Angeles and the nearby Port of Long Beach. As of December 19, the number of vessels waiting for berths outside the Port of Los Angeles and Long Beach had reached a record 104, which was higher than the queue of new ships in mid November. 86 ships at the time of system implementation. The current anchoring average waiting time is 20.7 days, which was close to the peak of 20.9 days in early December.

Generally speaking, the voyage time from Asia to the Port of Los Angeles is about 14 to 17 working days, but nowadays it often happens that the cargo ship floats at sea for 30 days but still cannot dock.

The executive director of the Port of Los Angeles, Seroka predicted that the port congestion phenomenon may not be alleviated until the summer of 2022, from June to July which mean that the port congestion phenomenon in the United States will be maintained for at least another six months.

Rates continue to increase

The shipping company was prepared to launch GRI and FAK up to US$1,000/FEU on the entire Asia-Europe and Trans-Pacific routes from January 1, 2022. In some cases, it will also reintroduce equipment and space to guarantee premiums!

In addition, under the pressure of "zero infection" epidemic prevention, China's major ports began to announce price increases in December, which will be implemented from January 1, 2022:

Ningbo Port: Increasing the loading and unloading fees of foreign trade containers by 10%. After the adjustment, the ordinary heavy container of 20feet in Ningbo Port was adjusted from the original 490RMB to 539RMB, the empty container of 20feet was adjusted from the original 429RMB to 472RMB; the ordinary heavy container of 40feet was adjusted from the original 751RMB to 826RMB, and the empty container was adjusted from the original 643RMB to 707RMB.

Shanghai Port: The price of 20feet heavy container for domestic trade transit will be increased from 160RMB to 240RMB.

Guangzhou Port: The port operation leasing fee for foreign trade loading and unloading operations, 20feet foreign trade standard heavy containers (loaded containers) will be increased from the original 490RMB (trailer collection and dredging method) and 540RMB (water transfer method) to 583RMB, and the foreign trade empty container will be announced. The price has been increased from the original 300RMB to 357RMB.

Industry insiders believe that the adjustment of the loading and unloading fees of the above mentioned ports is only the beginning, and other domestic ports are expected to make appropriate adjustments to some of the charging items in 2022 in the future.

However, it should be noted that the charging objects for port container loading and unloading operations are shipping companies, not manufacturing customers. This round of port price increases means that the shipping boom is transmitted to domestic ports.