The new year has just begun, and the global shipping industry is wailing again. The offshore RMB exchange rate against the US dollar has broken the 6.44. The ocean freight rate that is most concerned about shipping from China has skyrocketed again. Shipping from China overnight The sea freight on the Mediterranean route has soared by 25.8%, and the sea freight from China to Europe has risen by 23.5%. In just five and a half months, sea freight has soared by 1535%.
At present, the freight rates of almost all routes shipped from Asia are rising. The continuous increase in transportation demand and the continued shortage of global containers are the main reasons for the increase in freight rates.
According to the notice issued by the shipping company, following the increase in the surcharge in mid-December 2020, a number of shipping companies plan to implement a comprehensive price increase from January 1, 2020. This is another increase in logistics freight from China. One of the reasons.
Unbelievable ocean freight, on the first day of 2021, will still make it impossible for global buyers who import from China and Asia to sleep. Following on December 28, 2020, the ocean freight rate for shipping from China to the U.S. line suddenly got out of control and soared by nearly 10% from the previous day! The Euro-Mediterranean route ushered in a soaring freight rate on the first day of the new year.
First, let’s take a look at the Baltic Daily Freight Index released on the 1st, the global container freight average index, which jumped from 3377 USD/FEU on December 31 to 3740 USD/FEU on January 1, an increase of 10.75%.
This freight rate is 2.5 times the average freight rate of US$1497/FEU in the same period last year.
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In recent months, the “historical record” of container freight rates has become the norm. On some routes, the upward trend of freight rates has not abated at all. The rate of the European-Terrain line’s freight rate jumps was a bit unprepared, and even more incredible.
According to the Freightos Baltic Daily Index on January 1, 2021, the freight rate of the China/East Asia-Northern Europe route hit a record high, reaching $6,992/FEU, compared to the last day of 2020 on December 31. The price of US$5,662 jumped 23.5% overnight.
Freightos’ latest weekly data shows that the rate of the Asia-Northern Europe route has increased by 19% this week to $5,923/FEU. In the same period last year, the data was only $1888.
According to the Baltic Daily Freight Index: On January 1, 2021, the China/East Asia-Mediterranean route hit a record high, reaching US$7,101/FEU, a sudden jump from US$5,644 on the last day of 2020 on December 31. 25.8%.
In just 5 and a half months, the shipping cost from China to South America has skyrocketed by 1535%!
According to the Shanghai Container Freight Index SCFI report this week, the freight rate in South America has exceeded 8000 USD/TEU to reach 8173 USD/TEU. This is the first time that SCFI’s freight rate on this route has exceeded 8000. The route index broke 7000 USD/TEU for the first time, and the week before it broke 6,000 USD/TEU for the first time.
Many importers are unable to adapt to this rhythm of price increases and are still waiting and waiting.
What’s more worth mentioning is that due to the impact of the epidemic, the freight rate of this route dropped below 500 USD/TEU for the first time in July 2020. This means that in 5 and a half months, the freight rate of this route has increased by 1535 percent.
What’s more, this freight rate may not be the real freight rate. As relevant industry insiders said, the freight cost presented by the index is actually an illusion. The price you see does not include the freight for premium services. In fact, a large additional fee may be required on top of this price. For example, because of the lack of containers at the Chinese port of departure, additional fees need to be paid.
For example, in order to guarantee the container QR code and container space, some operators charge an additional fee of US$1,500 or even US$2,000 (per FEU). If there is no space and QR code for the container, then the price is meaningless.
Many importers encountered many sea freight traps at the beginning. For example, they received a freight forwarding quotation from Ningbo to Los Angeles. The sea freight cost from Ningbo to Los Angeles costs 4500 USD, but the sea freight quotation from freight forwarder B costs 5500 USD. The sea freight quotation differs by 1000USD. Many people will choose to use the service of A freight forwarder, but two situations will occur at this time. At the last moment, often this kind of price is too much lower than the market price, and the freight forwarder will increase the price at the last minute, or Informed that at this price, it is impossible to obtain the QR code of the container and the empty container. You need to pay 1000USD-10,000 US dollars (per FEU) or more to get the space, otherwise, you will have to wait three to four weeks. It sounds scary, but this sad, outrageous story is happening all the time.
Many importers have switched to CIF from the previous FOB term, but the ocean freight under the CIF term is very expensive. Suppliers’ freight forwarders often add a profit of 1,000 USD or much more. This is not a stable and cost-effective solution. One can be mentioned here. The solution is to find your own Chinese freight forwarder, reliable, efficient, direct, and first-hand ocean freight.
Of course, it is very difficult to find a reliable Chinese freight forwarder or Chinese shipping company， At present, most Chinese freight forwarders still lack an international mindset and sustainable development ideas. Their services and prices are likely to be short-term. In the previous FOB terms, Most importers still let their own freight forwarders find Chinese operating agents through various associations and alliances. Although this model increases the time cost and expense of communication, it is for importers who cannot find reliable Chinese freight forwarders. , It is relatively safe. Of course, you can contact Bestforworld immediately.
A large wave of ocean freight surcharges for shipments from China has struck, pushing up freight rates again:
According to the notice issued by shipping companies, following the increase in surcharges in mid-December, some shipping companies will begin to implement general rate increases (GRI) from January 1, 2020.
What is the GRI?
GRI-General Rate Increase rate increase surcharge: generally shipped from China and Asia to South American routes and US routes. This is not easy to understand. What are the so-called comprehensive rates?
To what extent will this surcharge be added?
It may be due to various reasons such as ports, ships, fuel oil, cargo, or other aspects that make the shipping company’s transportation costs significantly increase. In order to compensate for these increased expenses, the shipowner adds a comprehensive rate increase surcharge.
On January 1, 2020, CMA CGM, COSCO (only applicable to service contracts), Evergreen, HMM, ONE, Yang Ming, and ZIM announced the charging of US$1,000 per FEU for GRI from Asia to the United States;
In addition, Hapag-Lloyd listed the price of each FEU GRI on January 1 at US$1,500, including the previously delayed GRI.
Hapag-Lloyd will increase the new freight rates from Asia to Europe and the Mediterranean from January 1, 2021. Hapag-Lloyd also announced that it will charge GRI on all dry containers from East Asia to the United States and Canada from February 1, 2021.
Maersk issued an announcement stating that starting from January 1, 2021, 40-foot reefer containers from Mainland China, Hong Kong, Macau, and Mongolia to the Nordic region will be charged a peak season surcharge of US$2,000 per box.
In addition, CMA CGM, COSCO, Evergreen, HMM, ONE, OOCL, YangMing, and many other carriers serving East Asia/U.S. trade routes have adjusted their fuel surcharges, effective from January 1 to March 31, 2021.