General

The first quarter of previous years was the off-season for shipping, but this year’s off-season is also too busy!

This is a recent message posted on the Chinese government website and a reply from the Ministry of Communications. In fact, it is also the current dilemma faced by foreign trade companies:

The freight is priced at one price per day, frantically rising;

If you are willing to pay this money, you may not be able to get the cabinet;

The cabinet is guaranteed, and the boat may not be able to open on time;

Finally arrived at the destination port, but the port congestion can only continue to queue up on the sea;

...

Shipments that were not originally a problem have become a major problem since the third quarter of last year.

According to statistics from shipping consulting agency Drewry, the global container freight volume in the first quarter of 2021 increased by nearly 9% year-on-year, and the average China Export Container Freight Index (CCFI) was 1960.99 points, an increase of 113.33% compared with the same period of the previous year. Compared with the fourth quarter of the previous year, an increase of 56.8%!

Not to mention that at the end of March, Evergreen's container ships blocked the Suez Canal, the throat of Asia-Europe transportation. The Danish freighter company Vespucci Maritime pointed out that after the Evergreen stranded accident, shipping around the world must return to normal, let alone four to six months.

Now, the freight from Shanghai to Felixstowe, the largest container terminal in the UK, is US$14,000 per 40-foot container, plus a security deposit of US$1,500. Cargo owners don’t even think about bargaining, because there is no shop after the shipping space in this village.

Therefore, many foreign trade people said with emotion that this year they are not working for the boss, but for the shipping company.

Recently, many shipping companies have released their first quarter financial reports, and many have achieved the highest performance in history. I really envy others!

Maersk's first quarter profit set a record

On May 5, A.P. Mueller-Maersk released the first quarter of 2021 financial report. The company's performance has started exceptionally strong in 2021, and all business sectors including shipping, port services and logistics have achieved relatively high returns and growth.

In general, the first quarter’s earnings before interest, taxes, depreciation and amortization (EBITDA) increased from US$1.5 billion in the same period last year to US$4 billion, and earnings before interest and taxes (EBIT) increased from US$552 million to US$3.1 billion. Revenue increased by 30% to $12.4 billion.

It is worth noting that Maersk expects that the current special situation in the market-supply chain bottlenecks and shortages due to surge in demand will continue until the fourth quarter of 2021, and then return to normal.

COSCO SHIPPING Holdings makes 170 million yuan a day

On the evening of April 29, COSCO SHIPPING Holdings disclosed its first quarterly report for 2021, which showed that its profitability has exploded. In the first quarter of this year, it achieved a net profit of 15.45 billion yuan attributable to its parent, a year-on-year increase of 5200.62%. In other words, COSCO Shipping Holdings made an average daily profit of 170 million yuan in the first quarter.

In the first quarter of this year, the Asia-Europe (including Mediterranean) routes doubled in revenue from the COSCO SHIPPING line under the group (COSCO SHIPPING Holdings and its subsidiaries), which made outstanding contributions to the surge in COSCO SHIPPING’s performance. Data show that Asia-Europe, Asia intra-Asia, and trans-Pacific routes achieved revenues of 12.306 billion yuan, 9.661 billion yuan, and 8.935 billion yuan, respectively, representing a year-on-year increase of 136.93%, 69.18%, and 75.70%.

Evergreen Shipping's performance hits a record high

Although its container ships blocked the Suez Canal and faced sky-high compensation, Evergreen Shipping broke its best quarterly performance in history in the first quarter of this year-Evergreen Shipping’s operating revenue was NT$90.236 billion (approximately RMB 20.756 billion). Yuan), a year-on-year increase of 108% and a quarterly increase of 39.4%.

The substantial growth in Evergreen Shipping’s operating revenue was mainly due to the strong import momentum in the United States, the surge in freight rates, and the simultaneous surge in freight rates from Asia to Europe. Last year, Evergreen Shipping had 44% of its revenue from the Americas and 24% from Europe.

Xie Huiquan, general manager of Evergreen Shipping, pointed out that the global port congestion problem is difficult to alleviate, and the supply of container spaces is in short supply, especially the serious congestion of West Coast Port. Coupled with the arrival of the traditional peak season in the third quarter, congestion is expected to be delayed until the third quarter to ease.

HMM turned a loss to profit for the first time in 10 years

Thanks to soaring freight rates in 2020, South Korea's HMM (formerly Hyundai Merchant Marine) achieved its first profit since 2011. According to a person in the South Korean securities industry on April 11, the operating profit realized by HMM (formerly Hyundai Merchant Marine) and SM Merchant Marine in the first quarter of this year is likely to exceed the operating profit for the entire year of last year. If this performance situation continues, HMM's annual operating profit will exceed 3 trillion won (approximately US$2.68 billion) this year.

Shipping consulting agency Drewry said that the container shipping market has never been so hot, and the industry is currently at the peak of an unprecedented business upcycle. Although Drewry expects that freight rates will drop by 2022, it still believes that shipping companies will try to maintain high profits due to "favorable supply and demand growth trends and skilled capacity management."

Shipping companies are brewing a new wave of price increases

It is worth noting that under the current “high fever” situation in ocean shipping, shipping companies are preparing for a new wave of price increases-the shipowners of the Pan Pacific route are preparing to issue a notice of substantial freight increase (GRI). , Effective from June 1st.

MSC increase GRI notice

CMA CGM raises GRI notice

DB Schenker raises GRI notice

Foreign trade people who have shipping plans, please tell each other and prepare early!