By Arthur Chen   Photo：Ian Taylor，Link：Unsplash

The crazy party of sky-high ocean freight rate has never reached celling until now. Steamship lines, in a way, are wailing for the constantly short of equipment, on the other way, keep on purchasing less quantity of new built container or leasing used container than it should be.  The current true situation is all steamship lines need to input 20% more than last year in new built container or used one to implement the vacancy because of the congestion of seaports worldwide, especial in the norther American.  On the other hand, the new orders for building up new container ships have arrived new world record than past 10 years.  All steamship lines are investing big fund to expand the vessels volume both ship sizes and numbers, and the very early new vessels released shall be in 2023. The new built container should be come up in the same path to fulfill those new ships touch down water.  If steamship lines place over needed orders to build new containers within 2021 to 2023 may cause too large supply of equipment more than real demand of shipping. This may cause the ocean freight rate turns downward which is not liners glad to encounter it.

Well, better to keep always short of equipment so that space supply is always less than demand will promise lines in continuously in big advantage.

The US seaports congestion are still in place, even though slightly be improved after vaccination in these few months, the laden containers are stuck at rail ramps for uploaded to rail into IPI terminals. Maersk line claims they are operating “ blank sailings” in order to catch up the empty containers retrieved from USA back Asia in which can be loaded again. This is averaging takes at least 2 weeks longer than usual. The “ blank sailings” in June has decreased their capacity by 18% from Asian ports to west coast of the US and shall be 13% shortage in August.  It means the night mare of “ blank sailing/ skip calling Asian ports” is a on-going strategy for all steamship lines this year to keep balance of the space supply and demand so as to keep high ocean freight rate not reach celling.  No wonder the public stock market has high EPS provided by all shipping lines since 2020 and probably till end of 2021.  If you are one of initial players in stock market to any steamship lines back to mid 2020, 200% market price increased is the minimum amount.  

In brief, though the congestion raised unexpectable due to pandemic, the smart carriers really know how to dominate the basic economic rule – always keep less supply than demand ! And do every possible way to keep it going as long as possible. If you have spare money, maybe it is a good idea to buy some stocks of steamship lines and you may be lucky enough till 2022.