According to a report from maritime industry analyst Joe Monroe, global shipping companies are posting record revenue in 2020. This increase has prompted the FMC to announce that it will closely monitor the actions of the shipping lines, which it has asked to begin reporting any rate changes on a monthly basis rather than on a quarterly basis.
In fact, Monroe said, Maersk announced that the fourth quarter of 2020 would be better than the third quarter. Rates continued to increase as the year is practically closed, as shipping lines cannot accept more reservations for 2020 and they are already completing reservations for January.
But will the FMC intervene to end this madness? Last week the Agricultural Transportation Coalition (AgTC) held virtual meetings in which many exporters expressed their anger because the ships were not complying with their contracted reserves, turning quickly and taking the empty containers back to Asia, where they are paid high premiums to take products to the United States.
In the past, the FMC conducted investigations that went nowhere. Perhaps the solution is that the shipping lines require the approval of the trade regulatory authorities before adding or removing a shipping service. "After all, this mess was started by the way shipping lines manage their blank sailings," the analyst said.
Monroe highlighted in his analysis the observation made by his colleague Lars Jensen of SeaIntelligence, who indicated that terminal operators worldwide saw a decrease in profits of 1.9 billion dollars during 1H20, while shipping lines improved their EBIT by 1.7 billion dollars during the same period. Are we witnessing a massive transfer of economies and companies to the bank account of the shipping lines? Monroe asked.
Now Chinese ports are busy to the point of saturation handling the demand from their primary markets of North America and Europe. The situation is affecting the ports of Shanghai, Ningbo, Tianjin, Qingdao, Shenzhen, and Xiamen. However, at the other end of the Trans-Pacific Route, the Port of Long Beach in the US announced it mobilized 783,523 TEUs in November, i.e. 30.6% more than in November 2019. In October, there was a 19.4% growth over October 2019.
The figures for the port of Los Angeles should be just as high. In October, the Port of Los Angeles registered a growth of 28.9% over the same period of 2019. However, each week congestion seems to get worse at Southern California's terminals.