Ocean freight prices continue to rise, setting a historical record!

This year, the shipping industry is facing historic challenges. According to the Wall Street Journal, the increase in container freight rates on routes from Asia to the United States and Europe is setting a record high.

According to statistics, freight rates on the US East Coast route soared by US$310 to US$9,254/FEU, an increase of 3.46%; freight rates on the US West Coast route increased by US$228 to US$4,944/FEU, an increase of 4.8%; freight rates on the European route and the Mediterranean route increased to US$6,786/TEU and US$6,655/TEU, respectively.

Statistics show that since the second quarter, the SCFI freight index has been showing a continuous upward trend for 12 weeks. The current freight rate has increased significantly compared with the beginning of the year, especially on the US East Coast line. The freight rate at the beginning of the year was about US$4,700/FEU, and now the freight rate of US$9,254/FEU is almost twice the freight rate at the beginning of the year.

Shippers are competing to raise prices in order to obtain shipping space, and the shipping capacity will continue to be tight this year. The freight rates from Shanghai to Europe and the United States have increased by as much as 10 times compared to the same period last year , but even so, it is still difficult to get a cabin!

Now , July and August are the peak seasons for many businesses around the world to replenish stocks. In order to cope with the upcoming school season, businesses have to prepare stocks in advance. The demand for backpacks, computers, school supplies, clothing, shoes and hats and other products will continue to rise. The arrival of the peak shipping season will further intensify the trend of rising freight rates.

From the current perspective, major shipping companies will start a new round of surcharge increases in July and August. If the relevant fuel costs, shipping fees and other additional costs are taken into account, the freight rate from the Far East to the East Coast of the United States can reach 15,000-18,000 US dollars/FEU, the West Coast of the United States has also exceeded 10,000 US dollars/FEU, and the freight rate from the European line is about 15,000-20,000 US dollars/FEU!

This year, the shipping industry has been facing a series of problems such as lack of ships, containers, workers, and port congestion. Since the Suez Canal ship blockage at the end of March, the congestion of European ports has intensified. In June, Yantian Port and its nearby ports were closed due to the epidemic, forcing cargo ships to stay at sea, which further aggravated the shipping pressure. Although Yantian Port has resumed normal operations, it still cannot be fully digested in the short term.

As Europe and the United States gradually lifted their lockdowns in June and started a buying spree mode, the market entered its traditional peak season in the third quarter. Demand far exceeded supply of shipping capacity, driving freight rates to soar. However, the congestion at US ports has not improved so far. It is expected that the SCFI freight index will break through the 4,000 mark this week, driving freight rates to new highs.

Consulting firm Hackett Associates is optimistic that the United States' container imports will reach more than 29 million TEUs in 2021, a significant increase of 14.5% from 2020. The United States' imports from mainland China increased by 51.5% year-on-year, and imports from other parts of Asia increased by 44.5%. This move will benefit Asian production countries such as China, Japan, and Vietnam.

The high freight rates have made sellers miserable, and the shipping pressure continues to increase. Sellers must pay real-time attention to shipping trends, seize peak season opportunities, maximize profits, balance freight rate anxiety, and quietly wait for the shipping market to return to normal order!

Rising freight rates

Shipping tension