By Arthur Chen       Photo：Kelly L

The long-term contract rates are the most important indicator for judging the prosperity of the container shipping market. This year, both customers and liners are optimistic that the freight rate is still at high.

U.S. ports are at risk of  congestion again as exports from Asia surge. Recently, the queues of ships outside the two ports of Los Angeles and Long Beach have reappeared. The latest data from the Los Angeles Port Operation Report shows that on April 19, about 47 ships were waiting for berths. The Port of Los Angeles pointed out that with the recent increase in trading business, the backlog of containers will rise again. Many shipping lines announced that from May 1st, they will increase the general rate increase (GRI) for the trans-Pacific routes from Asia to the United States, ranging from one thousand to two thousand US dollars per FEU, an increase of about 10 to 20%. As some Chinese factories restart production one after another, there is a possibility of a sudden surge in export goods into The US. The number of container ships waiting outside crowded ports around the world has risen sharply recently, with 20% of all container ships currently traded around the world at a standstill. Between April 12 and 13, there were 1,826 container ships waiting outside the world's ports, accounting for about 20% of the global fleets. More than 500 container ships are stuck outside Chinese ports, accounting for nearly 28% of the total number of waiting ships in the world.

From the perspective of shipping costs, after 13 consecutive weeks of declines, the real time spot rates are expected to stop falling and rebound in the near future. With the resumption of running factories in Shanghai, and the large volume of shipments may start again, the originally blocked ports will also gradually open up, which will gradually to ease the supply chain that has been broken, and the busy shipping capacity may appear even greater, all aspects are pushing up freight rates to rebound. The latest Shanghai Export Container Shipping Index (SCFI) fell 0.82% to 4,228.65 points for the week. Although it fell for 13 consecutive weeks, the decline is narrowed down. In particular, the freight rate of the Far East to the US east coast increased by 0.64%, which has been rising for two consecutive weeks; the freight rate to the US west coast stopped falling and remained flat, and the decline of the European trades also narrowed down to 1.15%. Experts believe that this shows that demand is gradually picking up, and spot freight rates have bottomed out. The latest Shanghai Containerized Freight Index (SCFI) has risen 0.3% to 3128.45 points, rebounding faster than expected. By the industry insiders, China is the country with the largest export in the world, and the SCFI index can effectively reflect the current supply and demand of global trade. The trend is going up.

What is very strange in the market now is that the shortage of space and the on-going congestion of US ports have not been fundamentally resolved. The spot freight rate has continued to decline recently, but the major shipping giants expect that the supply chain crisis will still be difficult to alleviate in the short term. Maersk said congestion at port terminals will continue to delay supply chains in the second half of the year. MSC said it may continue to cancel sailings in May because of delays in sailing times due to supply chain issues. Hapag-Lloyd said it would launch a express service from the China to Germany to solve supply chain issues. Ocean Networking Shipping (ONE) pointed out that the recent increase in global ports congestion have caused about 10% of the world container ships to be immobilized. Therefore, based on the premise that the supply chain has not recovered by the end of the year, it can be confirmed that the current short-term spot freight rate drop in the shipping market has little impact on the performance of the carriers, because the long-term freight rate has doubled this year, and various surcharges It has also been increasing. The source said that the price of the long-term contract in the United States this year has more than doubled compared with last year. After the new long-term contract takes effect in May, it will directly double its revenue. The long-term contract rate is the most important indicator for judging the prosperity of the container shipping market. This year, both customers and container liners are optimistic that the freight level is still at high.

To remind everyone, as Bangladesh will usher in the 9-day Hari Raya holiday this Friday, the port of Chittagong will face serious container and ship congestion. Some ships have been waiting at the port for four or five days, and about 13 container ships were waiting to berth at the outer anchorage yesterday. The yard has nearly 42,000 TEU containers, out of a total yard storage capacity of 49,018 TEUs. The Bangladeshi government has decided to ban trucks carrying non-essential goods from the highways for three days before Eid al-Fitr to facilitate travel to the countryside, amid fears of heavy traffic congestion. Almost all factories will be closed from April 29 and reopened on May 8, officials said. Container unloading will continue during the holidays, except on Hari Raya, when there will be an eight-hour break. The port typically receives over 4,000 TEUs per day. Deliveries of most cargo at the port yard will be suspended over the holiday period as there are few truckers to transport the goods. Freight forwarders, bank staff and other stakeholders may also be unavailable. The port of Chittagong will face serious problems in the coming weeks.

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