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Starting from August, we will charge an extra 5000 US dollars per box, is US$20,000 per box enough? A small partner joked: The value of 10,000 yuan, the shipping cost of 100,000 yuan, what else is this product!

Drewry predicts that the container shipping industry will achieve a record profit of 80 billion U.S. dollars in 2021, higher than the previous forecast of 35 billion U.S. dollars.

Sea freight is about to hit a new high! Starting from August, we will charge an extra 5000 US dollars per box, is US$20,000 per box enough?

A small partner joked: The value of 10,000 yuan, the shipping cost of 100,000 yuan, what else is this product!

Recently, Hapag-Lloyd announced that due to the continuous extraordinary demand from China and the resulting supply chain operation challenges, it will implement a value-added surcharge (VAD) for all cargo transportation in accordance with the regular FAK guidelines.

This surcharge will not affect any medium-term or long-term contracts, and is intended to replace some other temporary surcharges, such as SGF (delivery guarantee fee).

The VAD surcharge will take effect on August 15, 2021, and will be paid by collection at destinations in the United States and Canada. The amount is as follows:

China to North America (U.S. and Canada)

USD 4000 for all 20' container types

USD 5000 for all 40' container types

According to reports, some carriers, such as Zim and ONE, have charged US West Coast shippers more than US$7,000 per 40-foot container for so-called value-added products, in addition to the FAK rate.

With the arrival of the peak shipping season, market demand has increased significantly, and some shipping companies have announced that they will charge a comprehensive rate increase surcharge (GRI) and peak season surcharge (PSS).

The latest Shanghai Container Freight Index (SCFI) broke the 4000-point mark for the first time, which is four times its historical average. This means that liner companies are steadily setting the most profitable year in history.

The index has been below 1,000 for most of the past 10 years, but it has broken records for most of this year, surpassing the 3,000 mark in May. In the context of exceptionally strong demand in the United States and severe global port congestion, the index showed little signs of weakening.

At the same time, Drewry's World Container Index (WCI) also recorded a new week of growth. The WCI’s average composite index is now $5,871/feu, which is $3,799 higher than the five-year average and 339% higher than a year ago.

Drewry predicts that the container shipping industry will achieve a record profit of 80 billion U.S. dollars in 2021, higher than the previous forecast of 35 billion U.S. dollars. If freight rates exceed expectations for the rest of the year, an annual profit of $100 billion is not impossible, more than three times the historical record of liner shipping.

The alarming data released by the container shipping industry has also prompted regulatory agencies in many countries to intervene and try to find solutions to alleviate the double blow of record high freight rates and delayed container arrivals faced by exporters.

Freightos, an international online freight market, said: "As the peak season heats up, demand for shipping continues to exceed supply, pushing the Asia-Northern Europe freight rate to exceed the $13,000/FEU mark. Since last week, due to the possibility of shipping capacity shifting to routes outside Asia, Europe to South America Shipping costs have increased by more than 30%."

And added: "Especially the trans-Pacific capacity is so severely restricted that most bookings-if the cabin can be booked-rely on offline bidding wars."

In addition, the major U.S. rail operator Union Pacific will suspend shipping of containers from West Coast ports to inland Chicago to clean up a large backlog of containers. Freight rates are likely to see a further surge this week.

Judah Levine, Head of Research at Freightos, commented: “Some shippers who urgently need to replenish inventory are switching from sea to air, which shows how much pressure the industry is currently under.”

As more and more carriers on trade routes are now ignoring contracts, forcing shippers to accept extremely high FAK and high surcharges.

Except for very large companies, other companies may not be able to withstand these huge cost increases, or pass the costs on to customers, which will lead to the loss of orders and customers.

However, if things go on like this, shippers' grievances towards ocean carriers will inevitably accumulate!

In the current shipping market, the freight is not the highest, only higher!