General

Recently, the Shanghai Shipping Exchange released the "2021 (Mid) Water Transport Situation Report". The following is the container situation report.

Container water transport situation report

01

Review of the international market in the first half of the year

01

Significant increase in transportation demand

In the first half of the year, as the pace of vaccination of the new crown vaccine accelerated, the control measures adopted by major countries such as Europe and the United States were relaxed, and the global economy entered a path of recovery. According to the World Economic Outlook issued by the International Monetary Fund (IMF) in April, the global GDP growth rate will reach 6% in 2021, up 0.5% from the January forecast. Among them, the economic growth rate of the euro area economy is expected to reach 4.4%, which is 0.2 percentage points higher than its January forecast; the US economic growth is expected to reach 6.4%, which is 1.3 percentage points higher than its January forecast. All major economies have experienced positive economic growth and the growth rate has expanded (see Table 1).

With the steady recovery of the economies of major economies, the overall global container shipping market demand has risen sharply. According to Clarkson's second quarter report, the growth rate of global container transportation volume in 2021 is about 6.0%, and it is expected to reach 206 million TEU. Among them, the Asia-Europe westbound route is estimated to be 16.9 million TEU, an increase of 9.7%; the pan-Pacific eastbound route is expected to be 21.4 million TEU, an increase of 13.8%; the intra-Asian route is expected to be 62.2 million TEU. , Up 9.1%.

02

The fleet size grows steadily

In the first half of the year, the speed of new ships entering the market remained stable, and the large-scale ships continued to advance. According to Clarkson's statistics, as of May 1, the number of full container ships worldwide was 5,426, 24.24 million TEU; the number of capacity containers increased by 3.9% year-on-year, of which the capacity of 12,000 TEU and above accounted for 29.9% of the total capacity. This is an increase of 1.7 percentage points from the end of 2020. As of May 1, the weekly capacity invested by the world’s major liner companies on the Far East-North America and Far East-Europe routes were 568,800 and 423,500 TEU respectively, an increase of 47.6% and 24.6% year-on-year; an increase of 23.44 compared to the same period in 2019. % And a decrease of 1.83%.

In the first half of the year, transportation demand rebounded sharply, the market's supply of capacity was tight, and the idle capacity continued to decline. Alphaliner data show that on April 26, the global idle container ship capacity totaled 590,000 TEU, accounting for 2.4% of the total capacity, a decrease of 0.5 percentage points from the same period in March.

03

Ship rents continue to rise

In the first half of the year, with the continuous advancement of new crown vaccination, the situation of foreign epidemic prevention and control has been steadily improving, the economies of major economies have gradually recovered, market transportation demand has remained high, and the imbalance between supply and demand of transportation capacity has continued. The demand for ship leasing has grown steadily, and some cargo owners have also participated in leasing activities. The market rent level has steadily increased and reached a high level during the year. Clarkson data shows that at the end of April, the rent levels of various container ships have increased compared with the end of 2020. Among them, the daily rents of 9000TEU, 6800TEU and 4400TEU vessels with 6-12 months charter periods have increased by 49.7% and 44.0 respectively compared with the end of 2020. % And 68.0%, a significant increase.

02

Review of the Chinese market in the first half of the year

01

Foreign trade has risen sharply

Since 2021, China's advantages in national defense against the epidemic have been highlighted, and international manufacturing orders have been relatively sufficient. In the first five months, the total value of China's foreign trade imports and exports was US$2.27 trillion, a year-on-year increase of 38.1% (26.8% over the same period in 2019). Among them, exports were US$1.24 trillion, an increase of 40.2%, and 29% over the same period in 2019; imports were US$1.03 trillion, an increase of 35.6%, and an increase of 24.3% over the same period in 2019.

In the first five months, ASEAN, the European Union, and the United States were China's top three trading partners, with year-on-year growth rates reaching 38.7%, 38.3% and 52.3% respectively. On the one hand, this is affected by the recovery of production and consumption in major economies such as Europe and the United States. On the other hand, due to China’s "New Year’s Day" in early 2021, companies have accelerated their resumption of work and production; the outbreak in India once again broke out and spread to Vietnam and other countries, global life and anti-epidemic supplies Demand orders flow to China, leading to a high supply of suitable containers.

02

Rapid growth of port container volume

According to data from the Ministry of Transport, in the first 5 months, the national ports completed a container throughput of 113.91 million TEUs, a year-on-year increase of 16.8%, and the growth rate was 23.6 percentage points higher than the same period in 2020. Among them, coastal ports completed 10.62 million TEU, an increase of 15.8%, and the growth rate increased by 22.3 percentage points; inland ports completed 13.29 million TEU, an increase of 24.8%, and the growth rate increased by 34.5 percentage points. The container throughput of major ports is showing a rapid growth trend.

03

The liner on-time rate dropped sharply

In the first five months, due to the continued impact of the epidemic, the liner schedule rates of 50 major ports in the world have all declined to varying degrees, and the liner schedule rates of nearly 60% of the ports have fallen by more than 20% year-on-year. In the first two months, there have been workers' strikes in ports in Europe and the Americas, as well as the reduction of manpower and work efficiency due to the infection of the new crown virus; coupled with the impact of severe weather such as snowstorms, the ports have continued to be congested and the liner schedule rate has dropped significantly. Affected by the sudden blockage of the Suez Canal at the end of March, the global logistics chain was severely disrupted from April to May. Among them, the European-to-land routes are the most affected, and major European ports have experienced delays or out-of-work; American ports are also facing ship schedule delays and capacity retention, which has exacerbated the further decline in liner schedule rates (see Table 2) .

04

Freight rates remain high

In the first five months, China has managed the epidemic well and the production order has been stable. Due to the tense epidemic situation, the demand for prevention and control materials and subsistence materials is soaring around the world, and the demand for transportation on various routes is strong. China's export consolidation market has risen sharply, and the average utilization rate of the ship's space has continued to maintain a high level. The transportation demand in the first quarter was generally stable, and the freight rate remained stable; the freight rate increased significantly in the second quarter. As the epidemic prevention and control situation in Europe and the United States stabilized and the supply of containers was in short supply, especially the port congestion and schedule disorder caused by the blockage of the Suez Canal in March, etc. The situation is frequent, the supply of transportation capacity is generally tight, and the average space utilization rate of ships is basically maintained at the full load level, supporting the rapid increase of freight rates on most routes. On June 18, the China Export Container Freight Index released by the Shanghai Shipping Exchange was 2526.65 points, an increase of 44.1% from the beginning of the year; the average value of the composite index in the first half of the year (as of June 18, the same below) was 2044.78 points, a year-on-year increase of 131.4 %. Shanghai Shipping Exchange released the Shanghai Export Container Comprehensive Freight Index, which reflects the spot market, at 3,748.36 points, an increase of 30.6% from the beginning of the year; the average value of the comprehensive index in the first half of the year was 2,997.72 points (see Figure 1 and Figure 2).

North American routes

The US epidemic has been effectively controlled, the economy has recovered and continued to improve, and market freight rates have soared. In the first three months, the daily number of newly confirmed cases and deaths in the United States remained high, the market demand for various medical and daily supplies remained stable, and the spot market freight rate remained stable. In the second quarter, on the one hand, with the widespread use of the new crown vaccine, the US epidemic has been effectively controlled, economic recovery has been steadily accelerated, consumer demand has accelerated, and market transportation demand has continued to maintain high levels; on the other hand, due to the impact of the epidemic, the western and eastern US Shortage of port manpower and equipment, overall poor loading and unloading efficiency, slow supply chain turnover, serious congestion in some ports, significantly prolonged ship detention time in the port, and low turnover efficiency caused by detention of empty containers in the yard, and the average ship space utilization rate basically maintained At the full-load level, the freight rates of the West and East Americas have been boosted steadily. On June 18, the Shanghai Shipping Exchange announced that the freight rates of Shanghai exports to the West and East US routes were 4716 US dollars/FEU and 8914 US dollars/FEU, respectively, up 17.3% and 87.7% from the beginning of the year. In the first half of the year, the US West and The average freight rates of the US East route are US$4,315/FEU and US$5,859/FEU respectively (see Figure 3).

Europe-to-land route

In the first quarter, the freight rates of European routes tended to fall steadily. The rapid recovery of market conditions in the second quarter drove up freight rates, and the spot freight rate reached a new high during the year. In the first quarter, the epidemic continued to spread in European countries, and the British Delta mutant strains further tightened the epidemic prevention policies of various countries. The logistics supply chain system is still under pressure. The average space utilization rate of ships in Shanghai Port remains at a high level, but the freight rate is level. High callback. In the second quarter, benefiting from the gradual promotion of the new crown vaccine, the situation of epidemic prevention and control in European countries has improved, epidemic prevention measures have been relaxed, and market demand has steadily recovered. In addition, the impact of the Suez Canal congestion continued to ferment, container turnover was slow, congestion in some ports was severe, and market capacity was tight. As a result, some liner companies had detours and skipped ports to guarantee schedules, and booking prices were increased accordingly. Spot market The freight rate has steadily increased, and the freight rate of the European route set a new high for the year on June 11. On June 18, the Shanghai Shipping Exchange announced that the freight rates for Shanghai export to Europe and Mediterranean routes were 6351 US dollars/TEU and 6392 US dollars/TEU, respectively, up 42.7% and 48.7% from the beginning of the year. In the first half of the year, the European and Mediterranean routes averaged The freight rates are 4593 USD/TEU and 4650 USD/TEU respectively (see Figure 4).

South American route

The South American market was affected by the epidemic and fluctuated greatly, and the freight rate of the route stabilized and rebounded after adjustment.

In January, the market volume performance was acceptable, the transportation demand was generally stable, and the freight rate remained high. From February to March, the local market's demand for medical supplies remained at a relatively high level, but the demand for other living supplies declined, market fundamentals were weak, and freight rates were adjusted at a high level. According to data from the Shanghai Export Container Freight Index, the freight rates of the Shanghai-South American route have fallen for 11 consecutive weeks since January 15, with a cumulative decline of 20.1%. Since April, due to the fact that the spread of the epidemic has not been effectively controlled, the South American epidemic has rebounded, and the number of new infections per day fluctuates at a high level. The market demand for medical supplies and other living supplies has further released, and the local production recovery capacity is limited. South American market imports Demand has steadily recovered, and the spot market freight rate has entered an upward channel. On June 18, the Shanghai Shipping Exchange announced that the freight rate for the Shanghai export route to South America was US$9,297/TEU, an increase of 7.7% from the beginning of the year; in the first half of the year, the average freight rate for the South American route was US$8005/TEU (see Figure 5).

Australia and New Zealand routes

In the first half of the year, the market freight rate showed a "U"-shaped trend. At the beginning of the year, the market freight rate dropped after a small fluctuation, and the freight rate fluctuated relatively slowly. In the first quarter, the local epidemic situation was well controlled, transportation demand was generally stable, and the demand for living materials decreased. The freight rate fluctuated and fell after reaching the high at the beginning of the year. Since the second quarter, the market supply-demand relationship has been steadily improving, and the market's supply of capacity has been tight, supporting the recovery of freight rates. On June 18, the Shanghai Shipping Exchange announced that the freight rate for the Shanghai-Australia-New Zealand route was US$2,395/TEU, down 2.3% from the beginning of the year; in the first half of the year, the average freight rate for the Australia-New Zealand route was US$2,146/TEU (see Figure 6). .

05

The volume of domestic trade containers quickly recovered

The foreign epidemic has repeatedly brought about an increase in orders from Chinese foreign trade companies, and the internal branch transportation of containers in major ports across the country has quickly resumed after the epidemic has been well controlled. According to incomplete statistics from the Shanghai Shipping Exchange, in the first 5 months, the main container internal feeder ports completed a throughput of 8.219 million TEU, a year-on-year increase of 10.9%.

Driven by strict epidemic prevention and control measures and the orderly vaccination of the new crown vaccine, the production and operation activities of Chinese enterprises have resumed quickly, and the daily consumption demand of residents has rebounded significantly year-on-year, which has increased the demand for domestic material transportation. According to data from the National Bureau of Statistics, the total retail sales of consumer goods from March to May increased by 34.2%, 17.7% and 12.4% year-on-year respectively, maintaining a strong growth trend. According to statistics from the Shanghai Shipping Exchange, the domestic container throughput of major container ports in the first five months was 31.537 million TEU, a year-on-year increase of 28.1%. Among them, the main ports in the Bohai Rim region totaled 12.154 million TEUs, an increase of 36.2%; the Yangtze River Delta regions totaled 9.162 million TEUs, an increase of 6.7%; the main ports in South China totaled 7.89 million TEUs, an increase of 14.9%; The total number of ports was 2.037 million TEU, a decrease of 1.3%; the major ports in the upper and middle reaches of the Yangtze River totaled 295,000 TEU, an increase of 18.4%. After the epidemic has been effectively controlled, except for the slight decline in the southeast coastal areas, the domestic waterway container shipping market has shown a trend of rapid growth.

In May, the outbreak of the epidemic situation in Shenzhen Port aroused the attention of the industry. Since May 31, Yantian Port has adopted disinfection, quarantine and other upgraded anti-epidemic measures, which slowed down the processing speed of containers and caused serious terminal congestion. By the beginning of June, it caused a backlog of tens of thousands of export containers. The growth of container cargo volume has caused a certain impact. Since Shenzhen Port's domestic trade shipments were mainly concentrated at China Merchants Port and Da Chan Bay Terminal, while the epidemic mainly occurred at Yantian Terminal, it did not have much impact on domestic trade container shipments. In the first five months, the domestic container throughput of Shenzhen Port was 941,000 TEU, a year-on-year increase of 34.5%.

03

International market outlook for the second half of the year

01

Economic rebound stimulates transport demand

Since the outbreak of the epidemic more than a year ago, there are still huge uncertainties in the global economic outlook. The epidemic has caused the world economy to shrink by 3.3% in 2020, and the degree of recession exceeds the 2008 global financial crisis. In the first half of the year, the epidemic still spread around the world, especially the number of people diagnosed daily in India and Brazil also broke out in a short period of time, which continued to have a serious impact on the world economy. With the use of vaccines in European and American countries, the epidemic has begun to show signs of slowing down in Europe and the United States, and the economy has rebounded sharply after experiencing the impact of the epidemic. According to the forecast of the World Economic Outlook released by the IMF in April, the global economy will resume growth in 2021, and the economic growth rate in 2021 will be raised to 6%. As major economies introduced large-scale fiscal support policies during the epidemic, and the timely introduction of vaccines slowed down the serious consequences of the epidemic, the world economy has rebounded substantially before the epidemic has completely ended. Although the continued promotion of vaccines has boosted people's mood, the emergence of variant delta strains and the increasing number of deaths have caused new concerns.

In 2020, the epidemic caused the economies of advanced economies as well as emerging markets and developing economies to be in recession at the same time. This is the first time since the "Great Depression". However, benefiting from the large-scale stimulus measures introduced by various economies and the rapid introduction of vaccines, the economic recovery speed of various economies is also unprecedented. According to the forecast issued by the IMF, the economic growth rate of advanced economies in 2021 is expected to be 5.1%. Specifically, the number of confirmed cases and deaths of the new coronavirus in the United States has long been ranked first in the world. The use of vaccines has improved the epidemic to a certain extent. In addition, the United States has implemented unprecedented fiscal and monetary measures, and the economy has rebounded rapidly. The United States is expected to grow by 6.4 in 2021. %, the growth rate is 9.9 percentage points higher than that in 2020. The early outbreak of the epidemic in European countries, coupled with the outbreak of mutant strains in the United Kingdom in Europe, caused a serious impact on the economy. The degree of economic development of European countries is quite different, which has a certain drag on economic recovery. It is estimated that the overall economic growth of the euro area in 2021 will be 4.4%, and the growth rate will increase by 11.0 percentage points from 2020. Among them, Spain’s economic growth rate will reach 6.4%; Germany, France 

China and Italy will grow by 3.6%, 5.8% and 4.2% respectively. The Japanese epidemic rebounded in the first half of the year. The shortage of chips and the sharp reduction in logistics efficiency dragged down Japanese exports, and the debt burden became even heavier. The one-year postponement of the Tokyo Olympics failed to give a good boost to the economy. The Japanese economy is expected to grow slightly by 3.3% in 2021. , The growth rate is slower in major economies.

As the health system is not yet sound, the epidemic has a greater economic impact on developing countries. Before the epidemic, developing countries whose economic growth level was higher than that of developed economies have no advantage in the speed of economic recovery. Except for China, where the epidemic is well controlled, most countries will continue to recover their economies in the context of the continued epidemic. According to IMF forecasts, the economic growth rate of emerging markets and developing economies is expected to be 6.7% in 2021. China has relied on strict control measures to fundamentally control the spread of the epidemic. The spread of the epidemic around the world has led to a substantial increase in China's exports, and the economy has recovered rapidly in a short period of time. It is expected to increase by 8.4% year-on-year in 2021. The Indian epidemic was originally well controlled, but with the emergence of the delta mutant strain and a sudden outbreak in the first half of the year, the subsequent economic recovery is facing greater uncertainty. Although India’s economy is expected to grow by 12.5% year-on-year in 2021 in April, the growth rate is likely to slow down significantly in the context of the sudden outbreak of the epidemic. The severe epidemic in some commodity supplier countries has had a significant impact on the supply of commodities, and the extremely loose monetary policies adopted by countries to maintain the stability of the financial market have substantially pushed up the prices of major commodities. Although rising commodity prices are good for commodity exporting countries, the drag of the epidemic and the increase in inflation have made the overall economic situation of most commodity exporting countries not optimistic. Brazil, Russia, and Mexico, where the epidemic is more severe, are expected to grow at 3.7%, 3.8% and 5.0% respectively in 2021. If the follow-up epidemic control of these countries is not effective, economic growth will face greater risks.

Although the epidemic is still spreading all over the world, the global supply chain has been hit, and the efficiency of port operations has dropped significantly, but the demand in the container shipping market is recovering well. According to Clarkson's forecast, global shipping demand will increase by 6.1% year-on-year in 2021. Among them, the volume of the Pacific route was approximately 29.4 million TEU, a year-on-year increase of 6.9%, and the growth rate increased by 2.3 percentage points; the volume of the Asia-Europe route was approximately 25.3 million TEU, a year-on-year increase of 5.7%, and the growth rate increased by 8.9 percentage points; The traffic volume was approximately 28.8 million TEU, a year-on-year increase of 6.7%, and the growth rate increased by 12.3 percentage points; the north-south route traffic volume was approximately 33.9 million TEU, a year-on-year increase of 5.9%, and the growth rate increased by 7.1 percentage points; the intra-regional shipping volume was approximately 8890 10,000 TEU, a year-on-year increase of 5.8%, and the growth rate increased by 6.6 percentage points (see Table 3).

02

Capacity scale continues to be large-scale

According to Clarkson's statistics, as of June 1, the total global order for full container ships was 474 vessels and 4.224 million TEU, accounting for approximately 17.1% of the existing fleet. From the perspective of the delivery period, it is estimated that the delivery capacity will be about 799,000 TEU in 2021, accounting for about 3.2% of the existing fleet. If all of these capacity are delivered on schedule, regardless of the amount of ship dismantling and delayed delivery, the capacity is expected to reach 24.718 million TEU in 2021, a year-on-year increase of 4.6%, and the growth rate is 1.7% higher than that in 2020. Among them, the capacity of 12000-14999TEU, 15000TEU and above was 3.808 million and 4.024 million TEU, respectively, an increase of 4.8% and 15.9% year-on-year.

In terms of dismantling volume, it is estimated that the total dismantling volume in 2021 will be about 30,000 TEU, a sharp drop of 84% year-on-year. Due to the pandemic, the efficiency of the supply chain system has fallen sharply, and the shipping market is facing a situation of insufficient supply, and the probability of shipping capacity being delivered as planned is relatively high. If these factors are taken into consideration, it is estimated that the container ship capacity will be approximately 24.718 million TEU at the end of 2021, an increase of 4.6% year-on-year, and the growth rate will increase by 1.7% over the same period in 2020. Among them, the capacity of ships above 12,000 TEU is about 7.832 million TEU, a year-on-year increase of 10.3%; the proportion of the fleet is about 31.7%, an increase of 1.7 percentage points from the same period in 2020, and the proportion of large ships has further increased (see Table 4).

03

Operational efficiency is greatly reduced

In the context of continuing to be impacted by the epidemic in 2021, the operational efficiency of the global container shipping market has been greatly reduced. Although the overall market capacity is at a high level and still maintains a growth trend, it still shows a pattern of capacity tension and market freight rates have risen sharply. According to Drewry’s forecast, in 2021, the forward traffic demand on the east-west trunk routes will increase by about 11.5%, and the forward capacity will increase by 15.8%. The fundamentals of supply and demand are stable. The average space utilization rate of forward ships on the trunk routes will be about 91.0%. The rate will decrease by 3.5 percentage points compared with 2020. The trend of large-scale ships continues, and the capacity of ships above 12,000 TEU continues to grow. As large ships continue to invest in the main routes, if the epidemic is effectively controlled in the future, the main route capacity will be saturated, and the phenomenon of excess capacity cannot be ruled out. If the supply and demand of the main routes are unbalanced, spillover effects will be further generated, and some capacity will be allocated to emerging market routes. The supply and demand balance of emerging market routes will also be under pressure, and the overall market supply and demand balance may face certain pressure.

04

Industry concentration is generally stable

In recent years, the industry concentration in the container shipping market has been generally stable, and there have been no large-scale mergers and reorganizations for a period of time. At present, there are 4 liner companies with a market share of more than 10%, namely Maersk, Mediterranean Shipping, CMA CGM and COSCO Shipping Lines. The market share is 16.7%, 16.0%, 12.4% and 12.2% respectively. Three other liner companies each have a market share of more than 5%, namely Hapag-Lloyd, Ocean Network and Evergreen Shipping. The overall share of the above seven liner companies is about 76.6%, which is basically the same as before the outbreak, and the industry concentration is generally stable. In the actual operation process, the main liner companies mainly adopt the alliance operation method, forming a "three pillars" pattern with the 2M alliance, the ocean alliance and the THE alliance as the mainstay. The alliance operation method avoided the industry from competing for market share through fierce price competition and maintained market stability during the epidemic.

The epidemic has adversely affected the world trading system. Delays in shipping schedules in the container shipping market and reduced port handling efficiency have all negatively affected the supply of transport capacity. Since most countries have adopted large-scale fiscal and monetary easing measures to maintain market stability, which has stimulated actual demand, the container shipping market is facing a situation of insufficient capacity, and market freight rates have risen sharply in the short term. The scale of capital investment in the shipping industry is large, and costs such as fuel fluctuate greatly. If the epidemic continues for a long time, the stable operation of liner companies will face greater uncertainty.

04

China market outlook for the second half of the year

01

Transport demand is expected to continue to improve

In 2021, benefiting from the effective control of the epidemic, China's foreign trade has fully recovered to the level before the outbreak. As the epidemic continues to spread around the world, affecting the normal operations of local companies, various orders have been transferred to China, which has promoted a significant year-on-year growth in China's exports. At the same time, due to the currency stimulus measures adopted by various countries to promote the increase in demand for bulk commodities and the sharp rise in prices, the production costs of Chinese companies have risen sharply, coupled with the rise of the RMB exchange rate and the increase in export freight, the profits of foreign trade export enterprises have not increased at the same time. In the long run, this will impede the continued growth of China's foreign trade. Although the continued spread of the epidemic in 2021 has caused China to continue to face an uncertain and unstable situation, China's foreign trade still maintains a long-term and overall positive pattern. With the continuous implementation of a series of China's foreign trade stabilization measures, coupled with the in-depth advancement of supply-side structural reforms, foreign trade will continue to stabilize and improve quality in 2021.

Currently, China’s foreign trade is facing the following challenges. First, the epidemic has caused greater uncertainty in global economic growth. At present, the epidemic continues to spread around the world. Although major economies have adopted loose fiscal and monetary measures and the economy has recovered in the short term, it has also caused increased debt burdens and risks of long-term growth uncertainty, which will continue to affect China’s foreign trade exports in the future. Recovery creates pressure. Second, the current multilateral trading system has been under attack, and signs of de-globalization of the supply chain system affected by the epidemic have appeared, which has continued to put pressure on the operations of Chinese foreign trade export enterprises. Third, as the European and American economies recover and local enterprises resume production, external demand may fall, and the growth rate of China's foreign trade exports may shrink in the second half of the year. In addition, trade frictions between some countries and China have increased, which continues to impact and trouble the steady development of China's foreign trade.

At present, the global epidemic has not been effectively controlled, the recovery of the world economy is unstable and uneven, the layout of the international industrial chain and supply chain has been profoundly adjusted, and the external environment facing China's foreign trade development is still complicated. Generally speaking, under the guidance of Xi Jinping’s new era of socialism with Chinese characteristics, China’s foreign trade has been strengthened and improved, and foreign trade policies have been stabilized. New business models and models have flourished, and foreign trade enterprises have continued to strengthen their development resilience. , Which will provide strong support for the steady increase in quantity and quality of imports and exports. Benefiting from the effective control of the epidemic, China’s export consolidation market has continued to improve. Although trade frictions may lead to increased risks and higher uncertainties in some routes, the overall consolidation export market is expected to continue to improve.

02

Freight fluctuations may increase

After the outbreak of the epidemic in early 2020, due to strict control measures adopted by China, the container shipping market has been greatly affected. In the first half of the year, benefiting from the good control of the epidemic, the production of enterprises was basically restored, and export trade increased significantly year-on-year. China's export consolidation market continued its positive trend since the second half of 2020. At the same time, the epidemic continues to have an impact on the container shipping market, the supply chain system is disrupted, the efficiency of port operations is greatly reduced, and the supply of transportation capacity is in a tight situation. In the second half of the year, the key factors affecting market trends are whether the epidemic can be effectively controlled and whether the supply chain and industrial chain are smooth. It is expected that China's export consolidation market will continue to maintain a good situation.

North American routes

Due to poor response, the number of confirmed cases and deaths of the new crown virus in the United States ranks first in the world. Although the United States has invested a huge amount of money to maintain the prosperity of the capital market, it cannot conceal the slow recovery of the real economy. The actual number of unemployed people far exceeds that before the epidemic. In the future, the US economy is more likely to break out of financial turmoil. In addition, the continued Sino-US trade frictions may also have a greater impact on Sino-US trade. At present, the United States has issued a large amount of unemployment benefits, which has stimulated a large amount of demand in the short term. It is expected that China's export consolidation demand for the United States will remain high for a period of time, but it is facing greater uncertainty. According to Drewry's prediction, the eastbound transportation demand of the Pacific route in 2021 is about 24.755 million TEU, an increase of 13.3% year-on-year, and the growth rate is about 5.5 percentage points higher than that in 2020. In terms of capacity, the delivery of container ships will decline in 2020 due to the impact of the epidemic, and the delivery of ships will gradually resume in 2021. According to statistics from Alphaliner, among the new ships scheduled to be delivered in 2021, 19 ships of 10000～15199TEU with 227,000 TEUs, a year-on-year increase of 168.0%. The epidemic has caused a shortage of labor, drastically reduced port operation efficiency, and a large number of containers are stranded in ports. With the increasing investment in container equipment and the restoration of new capacity, it is expected that the current shortage of empty containers and tight capacity will ease. In the second half of the year, if the U.S. epidemic gradually stabilizes, China's exports to the U.S. are expected to remain stable, but there will be certain difficulties if they continue to grow sharply. The supply and demand relationship of North American routes will return to balance, and market freight rates are expected to return from historical highs to normal levels.

Europe-to-land route

In 2020, the epidemic broke out earlier in Europe and lasted for a longer period of time. Later, due to the outbreak of the mutant delta strain, the European economy was hit harder. Entering 2021, although the epidemic continues to spread in Europe, the European economy has shown good resilience. Together with the unprecedented EU economic recovery plan adopted by the EU region, it has played a supporting role in the recovery of the European economy from the impact of the epidemic. In general, with the gradual slowdown of the epidemic, China's demand for European export consolidation is improving, and the market supply and demand relationship is stable. According to Drewry's forecast, the westbound transportation demand in Northwestern Europe and North America will be approximately 10.414 million TEU in 2021, a year-on-year increase of 2.0%, and the growth rate will increase by 6.8 percentage points from 2020. Due to the impact of the epidemic, the overall transportation efficiency has been greatly reduced, and some containers have been stranded in ports, and the market has shown a situation of tight shipping spaces. In terms of capacity, the overall capacity of the market is currently at a high level. During the epidemic, capacity growth has been relatively slow. However, the new capacity will be mainly large ships, which will be mainly invested in main routes to partly alleviate the shortage of capacity. In the longer term, when the container shipping market recovers from the impact of the epidemic, the market will return to the balance of supply and demand.

North-South Route

In 2021, the epidemic continued to spread all over the world. Countries invested a large amount of currency to push up the prices of bulk commodities, and most commodity prices rose to the level before the global financial crisis in 2008, partially alleviating the difficulties of resource exporting countries. However, because most of the resource exporting countries are developing countries, the public health system is weak, and there is a lack of vaccines to control the epidemic. The epidemics in Brazil, Russia and other countries are particularly severe, and the overall economy has been severely impacted. At the same time, the severe epidemic has stimulated the demand for daily necessities and medical supplies. According to Clarkson's forecast, in 2021, the demand for container shipping on Latin American routes, African routes, and Oceania routes will increase by 7.1%, 5.4% and 3.7% year-on-year, respectively, and the growth rate will increase by 8.3, 7.1 and 3.5 percentage points respectively compared with 2020. On the whole, transportation demand on the north-south route will pick up in 2021, and the epidemic has reduced the efficiency of the supply system and tightened the supply of transportation capacity. The north-south route market is supported by transportation demand in the short-term, but if the epidemic situation in relevant countries is not effectively controlled, it will put pressure on the market in the long run.

Japan route

After entering 2021, the epidemic in Japan has rebounded, surpassing the peak of the epidemic in 2020, so that the Tokyo Olympics may be held in a manner that prohibits spectators from entering the venue. The huge amount of funds previously invested in the Olympics may face huge losses. The epidemic has further hit the already weak Japanese economy, coupled with the increasingly serious structural problems such as an aging population, Japan's economic growth lacks momentum in the context of high debt. The transportation demand of China's export to Japan routes is generally stable. In addition, the liner companies operating the Japanese routes have formed a stable business pattern for many years, avoiding malicious competition for market share, and the market situation remains stable.

Routes within Asia

Asian countries with good control of the epidemic will face an increasingly serious epidemic in 2021, and countries such as India have caused the epidemic to get out of control because of the delta mutant strain. As Asian countries are mainly developing countries, the health and medical systems are weak, and the epidemic has hindered trade, investment, and the flow of people. Whether the epidemic can be effectively controlled will be the primary factor that determines whether the Asian economy can stabilize and rebound in the future. According to Clarkson’s forecast, in 2021, intra-Asia regional shipping demand will be approximately 63.2 million TEU, an increase of 6.4% year-on-year, transportation demand has stabilized and rebounded, shipping capacity supply on shipping routes is slightly tight, but the epidemic may cause greater uncertainty on future transportation demand.