The global container transportation market is facing a new capacity crisis, originating in the Far East, which has pushed maritime freight prices higher.
Since last week, various freight forwarder firms have been alerting their clients about the lack of availability of empty equipment in China, a country where one-third of global manufacturing takes place. This situation is motivated by port congestion in Singapore, India, and Bangladesh.
“Overall congestion worldwide has further increased to 2.10 million TEUs (20-foot containers), and further deterioration is expected as disruptions in sailing schedules at various Asian ports are causing vessels to pile up at downstream ports,” stated LINERLYTICA, a market intelligence firm focused on the container transportation industry.
Public data from this company reports that as of June 1 of this year, the port of Singapore has a total of 53 anchored ships with 367,969 TEUs detained, followed by Shanghai/Ningbo (China) with 54 ships in line and 321,255; while the port of Klang (Malaysia) had 22 ships and 109,709 TEUs waiting to be serviced.
“Congestion is expected to worsen in June, forcing operators to procure new containers and charter ships until beyond September, with rate hikes expected on June 1 and 15. Asian ports are the most affected, with Southeast Asia accounting for 26% and Northeast Asia 23% of global bottlenecks. Congestion in Singapore affects service reliability, thereby raising container prices from China soon,” stated Eternity Group Mexico in a statement addressed to its clients.
This capacity crisis comes at a time when the world’s top 10 shipping lines expect delivery of just over 5.2 million containers in the coming months, according to data provided by Alphaliner, another maritime sector data intelligence firm.
Meanwhile, the SCFI (Shanghai Containerized Freight Index), a global benchmark indicator for maritime freight, extended its rally for the ninth consecutive week, rising 13% last week, while cumulative gains since late March reached 76% with no signs of an imminent reversal.
As for maritime freight on the trade route between Asia and the West Coast of Latin America, having started in a range between $2,500 per FEU (40-foot container), its growth rate has accelerated, reaching around $10,000 by the end of last May, reminiscent of levels reached during the pandemic.
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