Highlight News - Ocean freight reached USD 10,000/40' !!!! Blamed to covid-19

02 Dec 2020

By Arthur Chen

There was a popular joke in freight business before 2020 - Our ocean price is dirt cheap, there is more than cheapest if you hand over freight to us. Last year from Asia to US, Europe roughly USD 1000 - 1500/40',but this year 3000 - 5000/40'. Not surprised at all, the ocean rate has reached 5 digits in Nov, 2020. Yantian, China to Algeciras, Spain was closed at USD 10000/40' port to port. It is said, from China to Africa shall also reach 5 digits these few days. Do you know the reasons? It is blamed to severe shortage of empty containers have no way back to Asia in which all stuck in US, Europe, Australia etc. And the reason of stuck there, it is covid-19 second wave outbreaking in these countries that cause seriously limited labors to work in airport and sea ports, warehouses, ramps, rail stations, trucks. Vaccine is the only way to save the world both human and economic.

Image by Valdas Miskinis from Pixabay 

FMC has taken action to investigate liners that imposed on unreasonable surcharge in the US ports.

During the sky-high rate in trans-pacific containers transportation, after Korea、Chinese MOT put their hands investigating liners, finally, US FMC also started to engage legal action for checking their unreasonable surcharges in main ports in Nov 19th. The inspectors are focusing the demurrage fee, storage fee, detention fee, withdrawing fee etc.  which is abnormal than before and extra high cost to all importers & exporters. The ports congestion which leaded containers break down, transiting to other ramps and also the shortage of labor in operation were not made by clients in the US. Many customers have proposed to FMC in claiming the extra high expense after Pandemic blasted. However, some carriers are still insisting to collect these surcharge and they shall face the investigation and hopefully FMC action can bring down unreasonable extra cost. From the financial reports end up to #3 quarter, 10 major container liners have made huge profit over 14.3 billion. Looks the carriers built up their happiness from pandemic unexpected and the sweet fruits go to them as well as the e-commerce platforms such as Amazon.

Image by Gerd Altmann from Pixabay 

International Ports- Colombo congestion

Report shows there are 50000 TEUs stuck in Colombo port, Sir Lanka due to short of labors and again it is caused by covid-19. This cost ocean freight increased double and impact to India、Bangladesh and Singapore with averaging 2-4 weeks delaying in shipping out.

Image by Andromachos Dimitrokallis from Pixabay

Unbelievable market this year bring carriers great margin ever than last 10 years

Started from third quarter this year, ocean shipping market has been booming and brought in huge profit. Maersk has increased 83% net profit compared to last year same #3 quarter and Hapag-Lloyd announced 50% profit gain in for first half year. All other liners have same huge income more or less same as the 2M alliance ( Maersk & MSC ).The high demand of commodities are belong to consumer goods such as tablets、laptops、home appliances、toys、fashion wares and electronics etc.. Due to lock downs and working from homes. This hot sales may be lasting to Chinese new year holiday. More worst, there are huge amount of containers stuck in Europe and USA waiting either to transfer to inland ramps or ship empty containers back to Asia. Report from HTA , just in Las Angeles, there are more than 15,000 containers piled up in Long beach port which caused "paralysis" to the port and connected roads. The delay of shipping dates could be 2-3 weeks or more. Everyone look at this nightmare could be solved in March 2021 but maybe later. The exporters and importers who pay ocean bill shall keep on suffering at least 3 more months from now.

Photo:John Guccione,Link:Pexels

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