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Shipping companies ignore contracts! The owner and the freight forwarder are angry......
Jun 01,2024
Freight rates have soared recently and will rise in June. The anger of shippers and freight forwarders due to the inability to withstand the sharp increase in in stock freight rates has reached a peak.
April and May of each year are the off-season of foreign trade in the traditional sense. However, this year, not only the off-season is not weak, but the shipping price has soared all the way, setting a record since September 2022...
Routes price crazy rise
Freight forwarding industry insiders recently revealed,European and American routesThe booking situation has been tense until the beginning of June, and the shipping company seized this opportunity to announce an increase in freight rates on June 1.
Specifically,US Linefreight rates rose again by about $1600 (including the peak season surcharge), whileEuropean lineFreight rates rose by $1000 to $1200. This adjustment made the freight rate of the European route and the US-West route break through the $6000 mark in one fell swoop, while the freight rate of the US-East route exceeded $7000.
In the last week of May, due to the extreme scarcity of shipping space, even if the fare is increased by 500 to 1000 US dollars, the freight forwarding company may have difficulty in getting shipping space. The shipping company at this time is based on the customer's record to determine the allocation of space and price, the market clearly entered the seller's market.
The Shanghai Container Freight Index (SCFI) reported a further rise on the 24th, rising 7.25 percent to 2703.43 points, setting a new high since September 2022.
Freight rates on all four major ocean routes continued to rise, with European routes rising the most at 11.77 per cent, Mediterranean routes up 7.35 per cent, US-East routes up 7.57 per cent and US-West routes up 3.26 per cent.
Drewry'sWorld Container Index (WCI)It also rose a further 16 per cent last week, reaching $4,072 per FEU on May 23, sustaining the significant growth seen throughout May and 142 per cent above the same period in 2023. This followed gains of 11% and 16% in the weeks ending May 16 and May 9, respectively.
Xeneta, a maritime services price comparison platform, said that with the impact of the tightening of maritime container capacity, freight in stock prices have risen by about 30% in the past few weeks and are on an upward trend. Xeneta warned that freight rates may continue to rise in June, and the increase is "sharp".
in the short five weeks since 26 April,European RoutesFreight rates jumped by 72.96 percent,Mediterranean Linewent up 39.37 percent,western linewent up 63.43 percent,US East LineIt rose 59.22 percent.
This wave of freight rate increase is mainly due to the early arrival of the peak season of the European line and the enhancement of inventory replenishment in the United States, which led to the increase of shipping volume. At the same time, in order to reduce the impact of rising freight rates, some customers shipped ahead of schedule, which further aggravated the tension of shipping space and promoted the rise of freight rates.
Ships ignore contractsThe owner and the forwarder are angry.
According to foreign media reports, in recent weeks, spot freight rates have soared and shipping companies ignored contracts, triggering anger among Nordic shippers and freight forwarders as they struggle to absorb rapidly rising spot freight rates.
The gains have intensified in recent weeks, with Drewley's WCI Shanghai-Rotterdam route rising as much as 20 percent for the week to close at $4999 per 40 feet.
However, according to the source, the actual purchase price is much higher, "the actual price of in stock is between 6,000-7,500 US dollars, and even the carrier said they will reach 10,000 US dollars."
The tight supply of ships and high trade demand, and the resulting increased container shortages in Asia's major export hubs, are currently having a significant impact on secondary trade routes. At the same time, carriers prefer to carry high-rate in stock rather than contract cargo, which angers many customers.
A European import manager said the recent surge in freight rates could force it to suspend shipments after current bookings are completed.
He explained:"The carrier's main concern now is profit.We are processing the goods on the current production line. Once these goods are shipped, the shipment will be suspended, and we have notified our suppliers and partners in advance."
One freight forwarder also expressed his displeasure, saying bluntly: "It's just an excuse, just like the new crown epidemic was used as a reason to raise freight rates." He questioned: "Is it really more expensive to ship a container now than at any other time, or are shipping companies just taking advantage of market conditions?"
The freight forwarder further analyzed and said: "This is like tulip mania, it is a bubble.Once this bubble bursts, there will be the usual cyclical rate fluctuations, namely the collapse of freight rates and subsequent recovery.This is a natural cycle of the industry, and shipping companies should understand that they cannot rely on higher freight rates forever to maintain profits."
affected by rising transport prices,Some freight forwarding companies and small and medium-sized foreign trade enterprises may face losses.
Currently, export shipping prices are rising day by day. Because of the shortage of space and containers, freight forwarding companies to shipping companies booking space is often canceled, increasing the workload of freight forwarding, foreign trade enterprises may face a backlog of goods, can not be delivered on time, increasing the risk of default.
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