“At present, the congestion of Ningbo Zhoushan Port Company Limited(601018) has eased. After all, the peak of Spring Festival shipments has passed.” On February 10, Lao Zhao said by telephone that this was the 20th Spring Festival shipping market he had experienced.
Lao Zhao is a senior marine cargo transportation agent, commonly known as “freight forwarder”.
The first financial reporter found that the foreign trade shipping market in the Spring Festival had a situation of “developing first and restraining later”. Firstly, the peak shipment led to port congestion and high freight rates. Secondly, during the Spring Festival, workers around the country had holidays. With the reduction of export goods, shipping prices fell.
However, Lao Zhao and other industry insiders predict that the “suppression” is short-lived. After the Spring Festival, China’s import and export goods will still return to the previous normal, and port congestion and shipping prices will continue to operate at a high level.
“over cabin” and congestion
One month before the Spring Festival, epidemic prevention and control across China were tightened, and the foreign trade export supply chain suffered a new round of impact. Regional blockade measures and large-scale nucleic acid screening, coupled with the shipping peak of enterprises before the Spring Festival, led to continued congestion in China’s major foreign trade ports, including Ningbo Zhoushan Port Company Limited(601018) .
On January 27, Ningbo Meidong Container Terminal Co., Ltd. issued a notice to inform customers that since mid December 2021, “The phenomenon that some shipping companies receive goods beyond the shipping space is becoming more and more serious, resulting in the serious overload of our heavy container yard. Some routes transship containers on site before opening the port (containers dumped in previous voyages) And the transfer box has far exceeded the export space. However, our company negotiated with the shipping company. For the route with serious over allocation and receiving, the shipping company shall provide the shipping list of this voyage, and our company shall receive the box in strict accordance with the shipping company’s list “.
When it comes to the shipping company’s over cabin receiving, A person in the shipping industry told reporters: “for example, the shipping company has a capacity (space) of 2000TEU (standard container) , in order to collect more goods and store more goods years ago, 4000TEU or even 6000teu shipping space was released to customers. When customers sent 6000teu goods to the wharf, they found that only 2000TEU goods could be loaded on the ship, while other goods that could not be loaded on the ship could only be stacked on the wharf. Therefore, the more overstocked, the more overstocked, the more overstocked, and finally blocked the wharf. “
How serious is the overboard situation? Take an Oriental Miami ship as an example, with a capacity of more than 8000 TEU and attached to four ports, with an average of more than 2000 TEU per port. However, the first finance and economics reporter noted that an Oriental Miami ship with a shipping date of January 19 had 3900 TEU of containers dumped and transferred on site before the opening of Ningbo Zhoushan Port Company Limited(601018) , while the export forecast was 2200 TEU. The combined total of the two was 6100 TEU, almost three times the actual available shipping space (more than 2000 TEU per port on average).
In the view of the industry, container overbooking is the sales “routine” of shipping companies, which is similar to airline overbooking tickets, but it also further highlights the tense situation of transportation capacity before the Spring Festival of the year of the tiger.
The congestion of Ningbo Zhoushan Port Company Limited(601018) is not a special case. The South China port with dense foreign trade transportation also continues to be congested, and the shortage of containers and cabinets is still severe. Recently, when visiting some ports and terminals in South China, the first financial reporter saw that there are many shore bridges in major port areas, container loading and unloading is quite busy, and Shenzhen Yan Tian Port Holdings Co.Ltd(000088) , Shekou port and Guangzhou Port Company Limited(601228) container heavy container exports are busy.
In order to ship early, some enterprises had to transport the containers to the port in advance and wait for the containers to be returned to the ship. As a result, many ports have introduced current limiting measures for the containers to be returned, that is, about 10000 containers are limited to enter the port every day. Shenzhen Yan Tian Port Holdings Co.Ltd(000088) , Guangzhou Port Company Limited(601228) , Shanghai port, Ningbo Zhoushan Port Company Limited(601018) and other ports have this measure.
“When the port is full, the trailer driver has to transport the heavy containers to the storage yard near the port for unloading, and the unloading fee has to be paid for unloading, and the price is very chaotic.” A freight forwarder told reporters.
“We have scheduled more than 50 foreign trade liner ships in the first week after the Spring Festival. Judging from the current trend of shipping schedule and operating container volume, it can be predicted that the port situation in the first quarter will be good all the way, and the throughput is worth looking forward to.” Insiders at a port in South China said.
“In fact, there is a shipping peak before the Spring Festival every year. Chinese manufacturing enterprises have holidays, and most Trailer drivers also want to go home for the new year. Shippers in Europe and the United States want to ship before the Spring Festival. Chinese manufacturing factories operate at full capacity, which leads to continuous congestion in ports and terminals.” Lao Zhao said.
The peak of shipment during the Spring Festival is also related to the full-scale production of Chinese manufacturing enterprises. According to the data of the National Bureau of statistics, China’s GDP increased by 4% year-on-year in the fourth quarter of 2021, and China’s manufacturing industry was also growing synchronously. In December 2021, the added value of industries above designated size increased by 4.3% year-on-year.
The release of the global purchasing index (vii-19) in the fourth quarter of 2021 still shows a very optimistic trend, although the manufacturing industry still faces many challenges. In December 2021, the PMI index of China’s manufacturing industry increased and has exceeded 50.3 for two consecutive months. With the arrival of the Spring Festival holiday, China’s economy still shows an expansion model.
The Spring Festival shipping market also makes it difficult for trailer drivers to recruit. The first financial reporter saw in a “trailer driver exchange group” in a South China port that there was a constant message of “finding an existing car to unload at a high price in cash” during the Spring Festival.
tight supply and demand will continue
After the continuous and intensive shipments before the Spring Festival, Chinese ports and shipping will usher in a brief gentle and decline during the Spring Festival.
Before the Spring Festival, Lao Zhao judged according to experience that “the prices in the first and second weeks after the Spring Festival should drop somewhat”. The reality is exactly what he expected, and the freight has decreased.
According to Zhao, it is not difficult to book shipping space at present. Taking the 40 foot container of Mason as an example, the freight from Shanghai to Los Angeles fell from a high of $30000 to $17000. “During the Spring Festival, the factory has a holiday, workers and trailer drivers go home for the new year, and there are no more goods to export, but the ships of liner companies still have to call at major ports in China, and the natural freight price has dropped.”
Although prices have fallen recently, according to Lao Zhao’s experience, freight prices will rebound with the increase of production and export volume of Chinese manufacturing factories in two weeks. He predicted that the price would rise to about $30000, which was comparable to last year’s market.
According to the data of previous years, the shipping price of a 40 foot container from China to the United States is generally $1000 ~ 2000. Since May 2021, the container freight rate from China to the United States has continued to rise. By August 2021, it has exceeded US $30000 / 40 foot container, an increase of more than ten times, and has remained at a high level since then.
The price does not come down, which is naturally related to the imbalance between supply and demand. From the relationship between supply and demand, we can roughly predict the shipping market after the Spring Festival and even the whole year.
According to a senior official of South China port, the loss of global effective transport capacity in 2021 is about 30%, and the loss rate is predicted to be 10% ~ 20% in 2022, with the corresponding transport capacity of about 3.5 million TEU. 169 new ships are expected to be delivered in 2022, with the transport capacity only increasing by 1.062 million TEU, a year-on-year increase of 3.5%, while the shipping demand is expected to increase by 5.9%. In recent years, in order to effectively cope with the transportation capacity, shipping companies are stepping up the construction of new ships, but it is difficult to deliver them for use in the short term. For example, Maersk, a shipping giant, has ordered many new ships.
Senior officials of the port predict that the tense situation of global transport capacity in 2022 is still difficult to alleviate, the congestion continues, and the sea freight is difficult to return to the normal level before the epidemic in a short time. “It is difficult to change the relationship between supply and demand in 2022, and it is expected that the pressure of supply and demand will begin to ease in 2023 and 2024”.
Maersk said that due to the high demand on the eve of the Chinese Lunar New Year, the shipping space has been quite tight, but the demand level is expected to return to normal soon. At the same time, it predicts that under the environment of continuous expansion of the global economy, the global container freight volume will continue to grow in 2022. “Unfortunately, problems such as cargo congestion, shipping schedule and capacity constraints still hinder the smooth operation of the logistics supply chain, and there are no other more effective solutions in the short term.”.
