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  • Writer's pictureStephen Fodor

High rates, container losses, stranded containers, & soaring container volumes, a sign of the times

Monday Morning Wake Up Call

February 8, 2021

Sky High Freight Rates and Lots of Obstacles Facing US Importers

Not only are current ocean freight rates at all time record highs but US Importers are also facing a number of other challenging that are increasing the cost of importing and causing delays in the international supply chain.

  • Vessel space is at a premium and many origin ports are seeing containers delayed a week or more before getting onboard vessels heading to the US.

  • Trucker issues at origin ports are causing delays in getting containers to suppliers for loading and delays in getting those loaded containers back to the export terminals.

  • COVID-related staffing shortages in many countries mean that factories are operating at less than capacity causing supply delays.

  • Trucker issues at US arrival ports are delaying deliveries. In some ports importers are forced to pay a premium to even get a trucker to delivery their containers.

  • Many US ports are congested and delays are common. While Los Angeles / Long Beach port is facing the biggest delays, with ships sometimes sitting at anchor for a week or more before being offloaded, other ports are reporting delays as well.

While some of these issues will likely get better in the coming months and hopefully ocean freight rates will fall back to Earth, some of the underlying issues will be facing importers for the longer term. 2021 looks to be a year full of challenges for everyone involved in international shipping. Stay tuned for news as we learn further about these issues.

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Ocean container losses topple annual average in 2 months

(American Shipper) The World Shipping Council issued an eye-opening report last July. What seemed like a steady stream of vessel fires, capesizes and container losses was in fact a small drop in the global ocean shipping bucket. A WSC study found a tiny fraction, about .0006%, of the roughly 226 million containers shipped on the world’s oceans each year were lost.

WSC reported on average only 1,382 containers were lost at sea per year between 2018 and 2019. So what’s going on? Between Nov. 30 and Jan. 31, more than 2,675 containers were lost in five incidents at sea. That’s almost double the annual average in just a two-month period.

ONE Apus lost 1816 containers on November 30th 2020

Maersk Essen lost 750 containers on January 16th 2021

MSC Aries lost 41 containers on January 29th 2021

Shipping containers stranded in America and Europe frustrate Chinese exporters

(CGTN) Chinese exporters suffer from extreme shortage and rising costs of shipping containers, which strand in America and Europe due to the COVID-19 pandemic.

East China's Yiwu, also known as China's commodity-exporting hub, bore the brunt when container shortages first hit China starting September 2020. And prices soon rose.

The world's largest straw manufacturer Soton Daily Necessities, located in Yiwu, has been struggling as its stock piles up. Chairman of the company Lou Zhongping told CGTN that they could not find any shipping containers at the initial stage of the shortages, and shipping prices rose higher than his company could manage.

"Now we have around $1 million's worth of products in stock. We still don't have enough containers. Even though we receive orders from abroad, we can't arrange the production and shipment as planned. I wish shipping ports, such as Ningbo Port and Shanghai Port, could allocate some of the resources to local enterprises directly," said Lou.

Professor Liu Chunsheng from Central University of Finance and Economics suggests that big data should be employed to scientifically distribute the shipping containers, and more should be done with the government's help to bring the empty containers back to China.

Container volume at eight major Chinese ports soars 20.5% in late January

(Seatrade Maritime News) Among the ports Tianjin, Shanghai, Ningbo-Zhoushan, Xiamen, Guangzhou and Shenzhen all posted a growth rate of over 20%. The high growth rate year-on-year in part reflects a sharp slump in late January 2020 with both the Lunar New Year holidays and the onset of lockdowns in China for the coronavirus.

Export container volume increased 19.8% while the domestic container volume increased 23.4% year-on-year.

Cargo throughput at major coastal Chinese ports increased 12.2% year-on-year while the international trade cargo volume increased 7.2%.

Crude oil shipments at major coastal ports increased 18.6% year-on-year, among which the port of Tianjin and Yantai posted a substantial growth rate of over 100%.

Metal ore shipments at major Chinese ports increased 5.8% year-on-year, among which the port of Tianjin posted over 20% growth rate. The port inventory declined 9.4%.

In late January, cargo throughput at three major Yangtze river ports, Nanjing, Wuhan and Chongqing, increased 40.1%, among which the port of Chongqing posted a growth rate of over 100%. The container volume at the three ports increased 17.4% and the port of Chongqing also achieved over 80% growth rate.

For the whole month of January, container volume at eight major Chinese ports increased 9.6% year-on-year, and the cargo throughput from major coastal ports increased 4.6%. The bulk cargo, as well as the oil and ore products’ handling volume all posted positive growth in the period.

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