By Arthur Chen      Photo : pixbay

The new contracts for the American trade will be negotiated by March. The bottom basic new fixed rates depend on agreed rate with those few US giant clients.  The forecast is not less than USD 6000.

Since last year, all the shipping lines have been devoting great efforts to buy new as well as used ships in various markets. They expect to accept the newly added shipping allocation as soon as possible to place more space into operation to earn high shipping margin. Following the crazy high profits gained by container transportation in 2021, all shipping lines are still optimistic about the continued booming of cargo volume and high freight rates in 2022. The prosperity of the container shipping market will continue, and carriers will turn their profits into shipbuilding and buying ships. Wan Hai, which is mainly based on the Asian trade, rushed to buy ships to block new allocation before the Lunar New Year. It was announced on the 28th that two 1781TEU container ships were acquired at a price of US$43 million each, with a total transaction value of US$86 million. Wan Hai line bought the ships regardless of the cost. The original cost was 23 million US dollars. Wan Hai line bought it at an increase of 86.96%. It should be because the ship was about to be delivered and could immediately running into the market to earn this year's super high freight rate. The two ships will be delivered in the second and third quarters of this year, respectively.

According to Xinde Maritime Network, the Greek ship owner Dioryx Maritime recently sold a second-hand Panamax container ship at an astonishingly high price. The company sold a 4,250TEU vessel named Lonikos (built in 2009) to an Asian shipping company for a whopping $95 million! This price is about 33%/$32 million higher than the price of similar container ships three months ago. According to market sources, the price also reflects a certain degree of rationality, considering the current high rental rates for container ships. In order to obtain ships as soon as possible to invest in more capacity to earn opportunistic wealth, the current shipping companies are willing to throw high prices to snatch capacity. With chartering now increasingly expensive and the charter market extending from short-term contracts of a few months to several years, smaller carriers are finding it harder and harder to get hold of vessels while the ocean shipping market is still hot.  So for small shipping companies, paying "astronomical prices" for ships may be the only way to fill the gap in their liner service. They all hope to grasp the situation in the shipping market in 2022 that the demand is greater than the supply and the port congestion cannot be relieved in the short term, and the new virus continues to affect the work efficiency of port personnel.

From the demand side, the SCFI quotation shows that the freight rates of various routes around the world entered a adjusted period in the last week before the Lunar New Year. For long-term contracts, the freight rate per 40-foot container on the US East Line fell by 3.1% to US$10,985; the freight rate per 40-foot container on the US West Line fell by 0.23% to US$7,957; the freight rate per 20-foot container on the European Line fell by 0.03% to US$7,780. US dollar; the freight rate per 20-foot container of the Southeast Asia route to Singapore fell 1.78% to US$1,483. Production bases in Asia have been shut down one after another for the Lunar New Year, and the global maritime supply chain can take a breather, which will help ease the port congestion. According to the past, it is normal for SCFI to be revised down by 1% to 2% on the closing date, but it only dropped by less than 1% in 2022, indicating that the demand for shipping is still there. The start time will be earlier, and after the Lantern Festival or the first month of the lunar calendar, the volume and freight rates will gradually recover. Since there is no large-scale New Year's holiday stuff moved in February and March, the market expects that the first quarter of the cargo will be mainly based on inventory replenishment and deferred shipments. In addition, the demand for European and American goods is still strong, and the West American Terminal Union will exchange the contracts with liners in June, the cargo owner may ship freights earlier than planned schedules, and the US trade may be coming sooner than ever toward the peak season. In addition, the world's largest free trade economic system RCEP (Regional Comprehensive Economic Partnership) has launched in 2022, boosting multilateral trades, and the demand for shipping on the Asian route is optimistic, supporting the continued high freight rates too.

From the fact that shipping lines are actively increasing the capacity of ships and the congestion in various ports have not yet been resolved, the market expects that the freight rate of container transportation in 2022 will be easy to rise and difficult to fall. The new contract for the American trade will be negotiated by March. The bottom basic new fixed rates depend on agreed rate with those few US giant clients. Many industry insiders predict at least $6,000 a FEU.

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