Electrical Equipment / Components & Telecoms

The shortage of capacity has pushed freight rates on major routes from China to the United States and Europe to record levels. Ocean carriers will further increase their rates starting this week, and FAK rates from Asia to Northern Europe will approach US$20,000 per 40 feet. This is an unbelievable increase of 1000% from the spot rate a year ago.

At the same time, Transpacific Shipping Company will launch an impact on shippers from Asia to the United States from June 15th, with a GRI of up to US$3,000 per 40-foot container (see article: Price hike is coming! Mid-June Later, many shipping companies announced the increase in freight rates! The price increased by 3,798 US dollars! It set a record for the highest single increase in freight rates in shipping history!), some shipping companies currently have freight rates of 17,000 US dollars/40 feet to the east coast of the United States.

Transatlantic shippers have also felt the impact of rising interest rates, which have risen sharply on a week-on-week basis: Last week, the Baltic Shipping Price Index (FBX) rose by 17% from Northern Europe to the United States, to US$5,069 per 40 feet.

Last week, the FBX index from Asia to the Mediterranean climbed further by 4% to 10,696 US dollars per 40 feet; the FBX index from Asia to Northern Europe rose further by 5% to 11,006 US dollars per 40 feet, but the relevant agencies observed from last week that the UK actually delivered Most carriers offer about $16,000 per 40 feet.

A UK-based NVOCC said that "outrageous rates" have caused many orders from China to be cancelled, explaining: "This has had a significant impact on retailers who cannot move inventory at increased retail prices."

Andy Cliff, based in Warrington Consulting, warned that some importers are caught in the trap between the fixed price and high freight rate agreed with major retailers and may run into trouble. "Many British importers will find themselves in trouble, with freight rates eight times higher than last year; therefore, bankruptcy is expected in 2022," he warned.

Another British freight forwarder said that the market is currently "chaotic." He said: "Our customers' imports are stagnating, and smaller importers such as the Garden Center will face bankruptcy. In addition, it is said that importers are seeking to transfer production back to Europe. Rates have increased. He added: “We ship about 150 reefer containers every week. Although MSC and Maersk have been very supportive of exports, finding a space in a blank voyage is a real challenge. "

In the Trans-Pacific region, last week’s latest Baltic FBX index from Asia to the West Coast of the United States rose 11% to $6,153 per 40 feet, while the index to the East Coast rose 17% to $8,836 per 40 feet.

Like the Asia-Europe trade, shippers in the Pan-Pacific region can only hope to obtain these rates in the short-term market, and from the many BCOs and NVOCCs who are eager to ship products to the booming US market, carriers can effortlessly Land fills any available space at a price twice the spot freight rate.

The main driving factor for the new round of sharp increases in almost all trade routes is the congestion crisis in South China ports, especially Yantian Port. According to reports, as many as 40 ships are waiting to berth as of last week. "Compared with the blockage of the Suez Canal, the congestion of Yantian Port has a much greater impact on the flow of goods across the Pacific." said Monroe, a Washington state-based Jon Monroe Consulting consulting firm. "Importers will be severely affected because their containers have been stranded in southern China for several weeks, and they are almost or impossible to load." (View article: The impact of the Yantian Port congestion has exceeded the Suez Canal blockage! Major shipping companies once again added port hopping voyages )

When the backlog of Chinese ports eases, the ports on the west coast of the United States will still face pressure. The consulting company said that the congestion in Southern California ports has shifted from the ship side to the land side, especially because the rail transport company was unable to clean up intermodal containers in the port. Monroe claimed: "The railway company does not have enough trains to quickly transport containers inland."