The German newspaper Der Spiegel reported on the 3rd of December that global shipping prices had turned into a nightmare in 2020 because of the Covid-19 pandemic. Shipping costs reached record heights in December. One of the worst victims of this situation is China. The shipping cost between China and Europe suddenly skyrocketed.
"We find it almost impossible to get our hands on shipping containers. And cargo ships are nearly as difficult to find. We are astonished to see the shortage become this serious. I do not think anyone saw this coming," said Rolf Habben Jansen, CEO of Hapag-Lloyd, the largest shipping company in Germany. The shipping companies that operate between China and Europe have fully loaded all of their cargo ships. The shipping cost per container already doubled several times. And all the cargo ships have been booked for December as well. The profit of Hapag-Lloyd increased by 85% in the first nine months of 2020. And the transport volume will likely remain as large in the last quarter of this year.
The Russian newspaper Kommersant reported on the 3rd of December that the shipping cost between China and Russia increased as well. The price per shipping container increased almost fivefold and in some cases nearly tenfold. Some overseas importers have stopped ordering from China. According to Russian media the rising price is the result of many different factors, but one of the main factors is the outbreak of Covid-19, and another factor is the festive period at the end of the year. One Russian import and export trader said that the shortage of shipping containers in China is the result of trade imbalance between Pacific and South Asian producers and consumers in North America and the European Union. China has stopped importing large volumes of commercial products from the USA, but the USA continues to import large volumes of Chinese products. The shipping containers that travel from China to the USA do not return in the same numbers.
The founder of Russian transport company VIG Trans stated that the number of shipping containers that traveled from North America to Asia declined by 14% in the first 9 months of this year, while the number in the opposite direction increased by 12%. Kommersant also cited market specialists who predict that a large volume of shipping containers will return to China in January next year. Perhaps then the price will come down again.
There seems to be a polarization in the global shipping industry since the outbreak of Covid-19. On the one hand there is a shipping container shortage and the price is going up, and on the other hand many ports across the globe are congested with a backlog of shipping containers. The situation is still uncertain, and only developments in the relationship between supply and demand will provide clarity for the market situation next year.
Source: Global Times, stcn.com