General

Yes, you read that right, shipping prices are going up again! From July 1st, a new round of FAK and GRI price increases has started. Are the industry partners heartbroken~

On June 25th, the Shanghai Shipping Exchange announced that the latest Shanghai Export Container Index (SCFI) was 3785.40 points, a record high, which was 37.04 higher than the previous index. The index reflects the direction and extent of changes in the settlement freight rate in the spot ocean shipping market, which means that ocean shipping prices are still on the way to increase.

As of June 30, the Baltic Dry Bulk Index (BDI) had risen to 3324, an increase of 2.12% from the previous day, breaking the record high since early June 2010 and setting a new high.

Reasons for rising shipping prices

1. The sequelae of the boat jam in the Suez Canal

Three months ago, the great ship jam in the Suez Canal of the century was still fermenting, and the “sequelae” of the global port congestion caused gradually spread to the mainland of China. Since May, as hundreds of container ships affected by the previous ship jam have arrived in mainland China, major container ports such as Shanghai Port and Shenzhen Yantian Port have experienced severe congestion.

2. The impact of the epidemic rebounding again

The global epidemic has rebounded again, and as the epidemic spread in Guangdong and other regions, the strengthening of epidemic prevention and control measures has also exacerbated the congestion in Shenzhen Yantian Port.

Yantian Port is one of the most important ports in South China, with an annual container capacity of more than 13.35 million TEUs and 107 navigable routes, mainly European and American routes. In 2021, Yantian Port has as many as 38 American routes, which will bear about a quarter of China's trade with the United States. After the outbreak of the epidemic, the freight rates of American routes have been directly increased.

3. Get together at Western festivals in the second half of the year

The second half of the year is the traditional peak season for shipping. Many western festivals, such as Halloween, Black Friday Shopping Festival, Christmas, etc., are held from August to December. The shipping costs in the first half of the year have soared due to the epidemic. The shipping costs in the second half of the year are With the traditional peak season for shipping, coupled with multiple adverse factors such as difficult bookings, serious port congestion, and unstable shipping schedules, the shipping situation will be even more tense in the second half of the year.

How to deal with rising shipping prices?

Recently, the State Council Information Office held a press conference, and the relevant persons in charge put forward measures to deal with the increase in shipping prices:

1. Do a good job in epidemic prevention and control, and import external defenses

Instruct local ports and transportation and shipping departments to do well in epidemic prevention and control and to ensure smooth work, such as related vaccination, personal protection, crew shifts, port loading and unloading operations, and coordination of blocking links in logistics, etc. A lot of work.

2. Ensure the transportation of key customers and key materials

Priority will be given to the transportation of civilian and biological materials and the transportation of epidemic prevention materials and other key materials, and corresponding guarantees will be made.

3. Actively coordinate international supply

On the main routes of mainland China, the number of cabins invested by major liner companies increased significantly from January to May this year. Among them, the capacity of North American routes reached 5.51 million TEUs, an increase of 65% over 2020 and an increase of 27% over 2019. . The capacity of European routes has also increased by 38% compared with 2020, and by nearly 10% compared with 2019.

4. Increase container productivity

Due to the difficulty of turnover of empty containers, the current demand is also very tight, and Chinese container manufacturers are increasing their productivity. The current monthly production capacity has been increased to 500,000 TEUs. By May, the shortage of empty containers at major ports in mainland China had dropped to 1.3%, which was gradually alleviated.