Posts Tagged “container shipping”
A continuous rise in global shipping and container rates is causing concern in Western and Eastern markets across the globe.
Led mainly by tight capacity, strong demand, and the ongoing disruption in the Red Sea, rates are approaching record highs seen during the COVID-19 pandemic.
Shippers and forwarders in Brazil report they are seeing container freight rates continue to surge on northbound trades to the U.S., Central America, and the Caribbean.
Forwarders say rates have already doubled since mid-June and show little sign of easing until November or December, if not later.
One source told the Journal of Commerce that rates have reached $5,000 to $6,000 per FEU, “depending on how late you try to book.”
“Freight rates are rising drastically,” Fabrizio De Paulis, managing director of Brazil forwarder De Paulis Logistics & SCM Eireli, told the Journal of Commerce. “There’s been a capacity shortage in July, with many vessels sold out, especially Maersk services.”
Highlighting the boom in Brazilian exports to the U.S., the U.S. Census Bureau reported that goods worth $17 billion were imported into the U.S. from Brazil in the first five months of the year, up from $14.6 billion in the same period last year.
Space on the Brazil-USEC trade lane has become very critical over the last few weeks, and all the main carriers operating on this route — Hapag-Lloyd, MSC, Maersk, and CMA CGM — have been increasing their rates,” Mauricio Fisch, director of Brazil forwarder Ocean Express, told the Journal of Commerce.
“If forwarders want a booking without having a service contract with some carriers, they must book the quick spot option at a much higher rate. Otherwise, they have to wait four or five weeks for a booking,” Fisch added.
A similar situation is occurring on European and Asian routes as the Red Sea disruption continues, with Houthi rebels targeting ships linked to Israel, the U.S., or Britain as part of their support for the militant group Hamas in its war against Israel.
According to authorities, this has reduced transit in the Suez Canal by nearly 50% since December 2023, resulting in a reduction of around 40 vessels per day.
Consequently, there has been a 70% increase in vessels navigating the less direct Cape of Good Hope, which increases the distance traveled by 40% and adds delays of two to five weeks.
Rural News Group from New Zealand reports that as the World Trade Organisation predicts a 2.6% increase in exports for 2024, the global shortage of shipping containers and congestion at some Asian ports, is raising the cost of trade. Rates in the region have nearly doubled in the last three months.
On the positive side, the outlet says the current rise in shipping costs is expected to be less inflationary than the surge experienced during Covid-19 as container production, largely driven by demand to move exports from China to the West, has increased substantially over the last few months.
Additionally, the disruptions experienced in the Panama Canal appear to be easing. Although a much smaller chokepoint than the Suez Canal, it still accounts for around 7% of global seaborne trade. The ‘Panama Problem’ was caused by an extended drought in 2023 that reduced the number of vessels able to use the canal and led to draught limits that reduced operating weights.
Currently, water levels in Lake Gatun, the main body of water that feeds the system, have been rising steadily since April, meaning that by early August, up to 34 ships per day will be able to use the canal. This is a major increase on the 24 vessels per day that had access at the start of the year and not far behind the more typical 36-28 vessels that use the canal in normal times.
Mediterranean Shipping Co. has become the word’s largest shipping line in terms of capacity, according to data compiled by Alphaliner and published on recently by Bloomberg.
The Danish carrier A.P. Moller-Maersk A/S is no longer the world’s largest container line.
MSC’s fleet can carry 4,284,728 standard 20-foot containers, 1,888 more than Maersk, giving both a market share of 17%.
Maersk, which first entered containerized trade in 1975, has held the top spot for decades. The carrier has been a pioneer in the industry, often breaking records by building the biggest ships.
More recently, it has invested in vessels that can sail on carbon-neutral methanol. It still has the most capacity in terms of owned vessels: MSC has about 65% of its capacity from chartered ships whereas Maersk only has 42%.
After struggling to make money for much of the past decade, the container shipping industry just had its most profitable year ever as pandemic-driven demand for consumer goods strains capacity on vessels. Freight rates out of Shanghai have jumped about five-fold over the last 18 months.
“We never set a specific target to be the biggest,” MSC Chief Executive Officer Soren Toft said in an emailed comment on Wednesday, adding that he’s focusing on growth and profitability.
Maersk CEO Soren Skou last month reiterated in an interview that holding the top spot isn’t important for the Copenhagen-based company, which is investing on expanding its land-based logistics where profit margins are higher.
BROWARD COUNTY, FL – Port Everglades is the newest stop on Evergreen Line’s CAJ weekly container shipping service to and from Panama, Jamaica and Haiti. Florida International Terminal at Port Everglades is the marine terminal operator for Evergreen, which has ships slated for arrival on weekends beginning May 2, 2020.
“Evergreen is a worldwide name in ocean shipping. Their presence at Port Everglades creates the opportunity for expansion into the Asian market,” said Glenn Wiltshire, Acting Chief Executive & Port Director.
Evergreen will have three vessels in the service rotation, which will include calls at Manzanillo, Panama; Colon-Coco Solo, Panama; Kingston, Jamaica; Port Au Prince, Haiti; Port Everglades; New Orleans; Houston before returning to Manzanillo, Panama.
About Evergreen
Based in Taiwan, Evergreen Line provides efficient shipping transportation throughout its global service network. The company operates some 200 ships, providing a capacity of approximately 1,270,000 TEUs. Evergreen Line maintains agency offices at more than 110 countries around the world, each providing superior transport services for local customers. More information about Evergreen Line and its services can be found at evergreen-line.com.
About Port Everglades
A global powerhouse for international trade, Port Everglades handles more than one million TEUs annually (20-foot equivalent units, the industry standard measurement for container volumes) and serves as a gateway to Latin America, the Caribbean, and Europe. Located within the cities of Fort Lauderdale, Hollywood, and Dania Beach, Florida, Port Everglades is in the heart of one of the world’s largest consumer regions, including a constant flow of approximately 112 million visitors statewide and 6 million residents within an 80-mile radius. Port Everglades has direct access to the interstate highway system and the Florida East Coast Railway’s 43-acre Intermodal Container Transfer Facility, and is closer to the Atlantic Shipping Lanes than any other Southeastern U.S. port. Ongoing capital improvements and expansion ensure that Port Everglades continues to handle future growth in container traffic. More information about Broward County’s Port Everglades is available at porteverglades