On August 30, CIMC Group held a performance briefing for the first half of 2021 at its headquarters in Shenzhen. Mai Boliang, Chairman and CEO of CIMC Group, conducted a study and judgment on the development prospects of the container industry, which is the most concerned issue in the current market: Containers ” The situation of “boxes being hard to find” may continue into the first half of next year. The company will do its best to ensure the supply of new boxes and help solve the problem of “hard to find a box”.
Freight rates are at record highs, trans-Pacific trade lanes are carrying more cargo than ever before, and a boom in the container shipping market has seen new orders for container ships (measured by capacity) worldwide rise in less than eight months this year. more than doubled. However, shipping industry executives have warned that the supply of container ships is likely to remain tight in the coming years given surging demand and modifications to the fleet.
New ship orders surge and ships are in short supply
According to Hellenic Shipping News, there are currently 619 orders for container ships to be delivered in the future, with 381 ships in 2021 alone. It is unprecedented that the order capacity has reached 3.44 million twenty-foot equivalent units (TEU) in such a short period of time.
(Image source: Greek Shipping News)
Peter Sand, chief shipping analyst of the Baltic International Shipping Council (BIMCO), said: “The current order book has 5.3 million TEU capacity, with plans to start adding to the fleet in 2023. At the beginning of 2021, the order capacity was only 2.5 million TEU. Since then, the order capacity has increased by a record 3.3 million TEU, indicating that the ship Timor-Leste is investing heavily in new shipping capacity.”
Reports indicate that container ships with a capacity of 16,000TEU have the most orders. From February to June this year, only five shipowners ordered 60 ships. In recent years, due to trade frictions and the outbreak of the COVID-19 epidemic, shipowners have noticed different trade models, and the more “versatile” 13,000-16,000TEU container ships are more popular than ultra-large container ships (ULCS). Despite the recent sharp increase in container ship orders, shipping industry executives believe that the surge in demand for container ship services and the complexity of retrofitting the fleet for environmental reasons mean that there is still a possibility of insufficient container ship supply in the coming years.
According to the British “Financial Times”, Xavier Destriau, chief financial officer of Israel’s Zim Lines (ZIM), said that many old ships have passed their scrapping years and the tight supply of ships poses “a potentially major threat.”
Andi Case, CEO of Clarksons, the world’s largest shipbroker, said that since 2017, the number of global shipyards has decreased by three Two-thirds dropped to about 115. He said: “We are still far away from an oversupply of the fleet.”
Container shipping giant Maersk (Maersk) Chief Executive Soren Skou said on an earnings call this month: “We are currently at historically high levels. The freight rate is caused by supply exceeding demand. There is simply not enough capacity.”
According to “Greek Shipping News”, so far in 2021, container ships equivalent to 1.5 million TEU in capacity have been ordered in 2023. It will be delivered in 2015 and 2024 and is not expected to break the record of 1.66 million TEU set in 2015.
Supply chain issues linger
Freight rates hit record high! It may not get better until next year at the earliest
Supply chain problems caused by the epidemic have pushed shipping costs to historical highs. The shortage of ships has increased the possibility of continued high freight rates, which is very important for retailers and consumers. Not good news.
The Drewry World Container Index shows that in the week ended August 26, the weighted average freight rate of a 40-foot container on major transoceanic routes increased by 2.1%, reaching a record high of US$9,818.
The jump in freight rates has put corporate profits under tremendous pressure. According to Retail Detail, the shipping cost for Belgian companies to import goods from China is now 10 times higher than before. Nikolas Van der Veken of Fitnessking told a Belgian newspaper: “We used to spend $1,800-2,200 to ship a 40-foot container, now it sometimes costs $24,000.”
In response to rising shipping costs and raw material prices, companies have announced price increases, and American toy manufacturer Hasbro is one of them. Hasbro Chief Financial Officer Deborah Thomas said the company expects ocean shipping costs to be on average four times higher this year than last year.
In addition to rising product prices, consumers also need to be prepared for shipping delays of several weeks to avoid leaving empty-handed when the shopping season comes.
Robinson Global Logistics (C.H. Robinson) CEO Bob Biesterfeld said: “The pressure on the global supply chain has not eased, and we do not expect it to improve in the short term.” He said: “As As we’ve been predicting for months, consumers will see some empty shelves during the holidays. Also, if you’ll be buying most of your gifts online, place your order early. Delivery time can take 4-6 weeks.”
No�Industry insiders predict that the tight global supply chain may continue until next year. Transport economist Thierry Vanelslander said that as long as the new crown epidemic is not under control, maritime freight will continue to be disrupted. Biesterfeld believes that the problems of port congestion and soaring freight rates may not ease until after the Lunar New Year in February 2022. </p
