Shipping lines, strategies, marketing supply and demand, lack of containers etc.
The global scenario this is atypical. Shipowners turned an opportunity apparently adverse for a profitable strategy. They bet on a constant demand and, that is exactly what happened. Reduced ships / slots, causing an increase in freight rates that have remained there four months and is projected for a few more months. The same strategy becomes even more profitable when there is a cartel around values.
We logistics operators (forwarders and NVOs) should find ways, strategies to do something that allows get the same. Figure out/brainstorming is required quickly.
Shortfall of equipment
All carriers need to apply for equipment in advance to pick up, otherwise it cannot get the containers from the depot.
Both Textainer and Triton, two of the world’s top three container equipment leasing companies, notifying that the shortage of containers will keep on coming months.
Textainer informs: “Before mid-February next year, the supply and demand situation of containers will not be able to restore balance, and the shortage of containers will continue until after the Spring Festival in 2021.
Speaking of the production: according to latest from China “News Week” the container production cannot keep up with the sudden increase in demand. The maximum monthly output of Chinese container manufacturers is about 300,000 TEU, and the factory is already operating at your full capacity.
Ocean freight increasing
According to the latest data, the market rate of the East US route has broken through USD 5000/FEU. It is reported that the current Long Beach Port and Los Angeles Port are extremely congested, the destination port is on strike, and the freight rate in South America is more than 4,000 US dollars, Australia is more than 4,000 US dollars, and the US line is 4,000-5,000 US dollars. Even Southeast Asia, such as the long-term 300-400 US dollars, has risen to 600/700 dollars.
Some carriers already heavy overbooked until 15 Nov., and they stopped the booking yet.
It is expected that trade activity will continue to intensify in the fourth quarter, and demand may remain strong during the Lunar New Year (mid-February 2021).
It is very hard to get space on board for loading to abroad, mainly to China. Ports like Manaus are suffering with the low tide (rivers more down than usual, making the shipping lines overcharge to navigate on Amazon river.)
Paradoxically, the north of Brazil as well northeast of Brazil have been increasing its demands directly impacting on freight costs each time higher.