CMA said that due to the strong demand for containers, it is difficult to supply the required container equipment, so it announced that its peak season surcharge between Europe and the United States will be increased by US$1,000/FEU to US$2,700/FEU, effective from October 1st, 2021. This will add more costs to importers who import from China to the United States. Many American importers have been on the sidelines and waiting for the drop in ocean freight from China to the USA.
A British partner of Bestforworld, they have a large number of goods shipped to the United States, the market went crazy overnight.
He said: “A minute ago, we were still thinking about how lucky we are not to suffer from the sharp increase in freight rates for Asian cargo. Then we received notices from shipping companies about GRI and additional charges. They also said that unless we are in other Pay additional fees on the basis of the price increase, otherwise our containers will not be able to be shipped.”
“For many years, we have been accustomed to the stability of the North Atlantic. Freight rates have never fluctuated as sharply as the Asia-Europe routes, but everything has changed, and I don’t think freight rates will fall. This means that exports to the United States are more profitable. Low products will no longer be viable. I have discussed this issue with several of our long-term customers. This is another fatal blow to exporters.” He added.
Freight rates on Asia-U.S. routes are also rising sharply. Especially the sea freight from China and Vietnam to the United States, according to the latest price assessment of S&P Global Platts, the spot price from Asia to South America still maintains a high level.
According to last week’s assessment, the price from North Asia to East Coast South America is US$11,200/FEU, which is nearly 560% higher than the US$1,700 in May 2020. Of course, the actual transaction ocean freight is much more expensive than this price.
At the same time, on the hot Asian route to the west coast of the United States, the Baltic Freight Index (FBX) described the price as “stable”, stabilizing at $18,425/FEU, still 452% higher than a year ago. Similarly, from Asia to the east coast of the United States, the price hardly fluctuates at US$20057/FEU.
However, the recent lack of fluctuations in ocean freight rates may be because the shipping companies have nothing to sell, because they are fully booked for all voyages in the next few weeks, and the excess capacity is waiting to be unloaded in San Pedro Bay. More than 40 container ships are occupied.
Jon Monroe Consulting, based in Washington State, said: “The current high freight rates and the inability of shipping companies to provide on-demand services force large and medium-sized retailers to find other ways to transport containers.”
Home furnishing retailer IKEA is the latest large chain store to admit that it has decided to take action to alleviate the supply chain disruption and a global shortage of goods the company is experiencing. At the same time, there are reports that shipowners, including the dry bulk industry, are currently seeking measures to deal with the challenges faced by the container shipping industry.
IKEA confirmed that it has begun to use chartered ships to transport goods from China and other places. The company also said that it is buying containers to ensure that there have enough containers to deliver the goods to its stores.
Containers shortage is also a big problem in nowadays shipping market.
IKEA explained some of the reasons behind its decision to charter ships and purchase containers, which are expensive measures. The company said that due to continued port congestion and incidents such as the “Long-giving ship stranded”, the company’s shipments have been severely delayed. After the Long Grant blocked the Suez Canal and was detained by the Egyptian authorities, it took the company several months to complete the shipment. IKEA said that shortages of raw materials and problems in the global supply chain are causing shortages and supply interruptions in its stores.
In order to better control the transportation of goods, IKEA has joined the growing ranks of retailers who charter their own ships. This spring, home improvement chain Home Depot first publicly talked about charter boats. Since then, other major retailers have taken similar measures. Wal-Mart reports that it has chartered boats, and Dollar Tree, a discount retail chain in the United States and Canada, also reports that it has chartered boats.
But despite this, Dollar Tree reported that it had problems with chartering. As a crew member tested positive for COVID-19, one of the company’s chartered boats was postponed for two months. In view of the current pressure facing shipping companies, once the supply chain is interrupted, there will not be enough capacity to make up for it. Said Mike Witynski, President and CEO of Dollar Tree.
Some logistics companies in the United States also lease a dry bulk boat that is not used to load containers to help their customer’s transport goods from China to the United States.
Now, more and more people in the shipping industry say that dry bulk companies are considering loading containers on their ships. The insurance group issued a warning against this behavior.
“In recent weeks, we have heard that dry bulk carrier owners are trying to obtain container ship certification to allow their ships to load containers.
As container shipping capacity is not expected to increase significantly in the near future, and the bottleneck of the supply chain cannot be alleviated in the short term, there may be more shippers looking for measures to solve the current market constraints.
Of course, there are still many risks in chartering. For example, the overall operation is not professional enough, and any omission in any link will cause the delay of the entire process, resulting in greater time delays and economic losses.
If many freight forwarders and importers blindly charter ships, they are bound to take very large risks and cannot just see high profits.