The issue of container shortages in the shipping industry is getting worse. Data released by the Shanghai Shipping Exchange last Friday (November 11th, 2020) showed that the freight rate of the European line increased by 24.2% in a single week, and the freight rate per container (20-foot container) was $2,948USD. The container (40-foot container) was about $5,896, and the Mediterranean route rose 28.9% to $3,073 per container, and the per large container rose above $6,000 to $6,146USD. As the shortage of containers is estimated to be unsolved before Lunar New Year rolls around, the shipping company has adjusted the freight rate from every two weeks to a weekly basis, and the freight rate will continue to soar.
The freight rate from the Far East to Europe has risen sharply and violently since the fourth quarter, going up by 152.39% in two and a half months. Compared with the low point of $725USD in late April of this year, the high and low points are three times worse. Some airlines have pointed out that the current freight rates of Europe and the Mediterranean line have reached a record high. The freight rate of the European line started to rise late, but it rose much faster than the American line. The freight rate on the US Westbound was unchanged at $3,948USD per large container on Friday, while the eastern US line edged up 2.2% to $4,804 per large container. It is expected to increase by $1,000USD for each large container on December 1.
The voyage of the Far East to Europe route has exceeded $1,000 since September, and the market situation has become tense. Due to the extreme shortage of containers, the surge in shipments from Asia to Europe, and the congestion of British ports, freight rates of the European route are expected to exceed $3,000 this week. .
The Far East to West America and Mediterranean routes also hit all-time highs, and the Far East to East America routes also rose sharply, rising by $104 per FEU (40-foot container) to $4,804USD, approaching a never before seen number.
Since the combined market share of the top ten airlines in the market has exceeded 80%, the industry concentration has increased, and the freight rate has risen sharply since the third quarter. The airline company Maersk (Maersk) has raised its full-year EBITDA from $7.5 billion to $8 billion and from $8 billion to $8.5 billion. It also announced last week that since employees had a hard time this year, approximately 80,000 employees, including 11,000 crew members, received a $1,000 Christmas red envelope per person.
In addition, the European line accounts for 30% of the operation of Evergreen and Yangming. Because the European line has a low proportion of the length of the line, almost all of them are spot-based. The price increase is more direct than the American line, and Evergreen and Yangming benefit greatly.
The industry predicts that this wave of skyrocketing freight rates due to port congestion and container shortages will continue until the Lunar New Year.