The current performance of the international shipping market

1. The current performance of the international shipping market

(1) International container freight rates continue to rise, and the demand for capacity is strong

Since the second half of 2020, the market has been in a state of lack of space, lack of containers, and rising freight rates. In the second half of 2021, there has been a continuous 26-week increase in the month-on-month period, and the year-on-year increase has reached an astonishing 350%. The 21 international routes have reached the highest value in recent years. Among them, the European route freight rate reaches 8300 US dollars/TEU [TEU refers to a container with a length of 20 feet, that is, an international standard container; FEU refers to a container with a length of 40 feet; 1 FEU = 2 TEUs. ]; After the US East and US West routes increase, the freight rates will reach USD 18,000 and USD 15,000/FEU respectively.

The increase in shipping prices firstly benefited from the steady growth of our foreign trade. From January to July, China’s total export trade amounted to US$1801.934 billion, a year-on-year increase of 34.89%. From the perspective of the export market, exports to the United States were US$302.63 billion, a year-on-year increase of 36.9%; exports to the EU were US$276.55 billion, a year-on-year increase of 32.4%, and exports to ASEAN were US$265.59 billion, a year-on-year increase of 33.3%.

Secondly, due to the poor circulation of ships and container equipment caused by congestion in foreign ports, the shortage of containers in domestic ports is still serious. The global container availability index CAx shows [A container availability index CAx of 0.5 indicates a shortage of containers, and a container availability index greater than 0.5 indicates sufficient. ], container equipment is stranded overseas, foreign containers are abundant, but global circulation is not smooth. In July, the average 40GP container availability index of major ports such as Los Angeles, Long Beach in the United States, and Rotterdam in Europe were 0.88, 0.91, and 0.74, respectively, and the Shanghai Port was 0.60.

In terms of route adjustments, under the epidemic, liner companies are more willing to allocate capacity to Asia-Europe/North America routes with high freight rates and strong transportation demand. From January to July, the Asia-Northern Europe route had a capacity of 12.894 million TEUs, a year-on-year increase of 12.9%; the Asia-Mediterranean route had a capacity of 5.875 million TEUs, a year-on-year increase of 8.9%; the Asia-Western America route had a capacity of 18.467 million TEUs, a year-on-year increase of 25.1% ; The Asia-US East route has a capacity of 9.086 million TEU, a year-on-year increase of 13.2%. The number of cancelled voyages on various routes decreased by 111, 128, 149 and 57 respectively year-on-year. In addition, the three major alliances have shown an upward trend in their investment in capacity on all routes. Among them, the 2M Alliance has accelerated its capacity deployment on North American routes, and its capacity investment on the Asia-Western US/East US routes was 335.9 and 2.744 million TEU, respectively, an increase of 34.9% and 13.9% year-on-year. As the most important OCEAN alliance on North American routes, the capacity investment on the Asia-Western/Eastern US routes was 583.9 and 3.708 million TEU, respectively, up 9.6% and 9.8% year-on-year.

Under the influence of the epidemic, the profitability of liner companies has reached an unprecedented level. In the first quarter of 2021, the total revenue of the world's top ten major liner companies (except Mediterranean Shipping) reached US$50.85 billion, a year-on-year increase of 56%; net profit was US$16.07 billion, a year-on-year increase of 243.5%. Rising profits and strong demand have driven liner companies’ demand for new ships soaring. According to Alphaliner’s data, there were 30 new orders for global container ships in May, with a total capacity of 165,000 TEUs, compared with only 4 ships (0.4 million TEUs) in the same period last year. ). At the same time, the current short-term (23-month) charter daily rent of container ships has been out of control. The daily rent of container ships above 8,500 TEU has reached 10.145 million USD, a record high.

(2) The international dry bulk and oil shipping prices are diverging, and the domestic coastal transportation market is "not slow in the off-season"

International dry bulk shipping prices set a new record in the past ten years. The loose monetary policy of the economy drove up the price of bulk commodities, the concentration of demand for iron ore, coal, grain and other maritime transport was released, and the shipping capacity of dry bulk ships was tight. The Baltic Dry Bulk Freight Index (BDI) climbed on May 5th. To 3266 points, a record of 10 years. Later, under the dual suppression of national policies and rising wait-and-see sentiment triggered by excessively high prices, the freight index continued to fluctuate and fell, and hit a low of more than one month. With the strong support of rigid demand in the bulk market, the BDI index began to rebound and rise on June 8. Under the influence of the high iron ore price maintaining stability and the continuous rise of coal prices, it rose 116 points in a single day on August 20 to 4,092 points, the highest since mid-2010. Among the sub-indices, the Capesize Ship Index BCI rose 286 points to 5997 points in a single day, the Panama Ship Index BPI rose 31 points to 3785 points in a single day, and the Handysize Ship Index BSI rose 39 points to 3276 points in a single day. As of August 20, the average BDI index for the first eight months of this year was 2503.4 points, a year-on-year increase of 173.9%.