Synopsis
Any hope for a return to more normal conditions this year was quashed with the beaching of the Ever Given that stalled traffic through the Suez Canal for almost a week in late March.
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Most logistics experts agree the situation can’t stay this disrupted forever, but there’s a growing sense that relief might not come until 2022. Even those sentiments are part guesswork.
Container shipping rates are heading higher again, driven to new heights by unrelenting consumer demand and company restocking from Europe to the U.S. that are exhausting the world economy’s capacity to move goods across oceans.
In 2020, shipping executives predicted the container-shipping capacity squeeze would last until Chinese New Year in February 2021. When that didn’t happen, they said mid-2021. The bar is now moving further out to the fourth quarter or beyond. After market close on Tuesday, Matson (NYSE: MATX) CEO Matt Cox said on a conference call .
Container shipping rates are heading higher again, driven to new heights by unrelenting consumer demand and company restocking from Europe to the U.S. that are exhausting the world economy’s capacity to move goods across oceans.
After peaking in late 2020 and not budging much through the first quarter, the rate for a 40-foot container to Los Angeles from Shanghai hit $4,403 last week, the highest in Drewry World Container Index data going back to 2011. Cargo shippers on less-traveled transatlantic routes are feeling the sting, too: Rotterdam to New York surged to a record $3,500.
With their fiscal and monetary floodgates wide open, countries with advanced vaccine programs are countering Covid-19 headwinds of unemployment, weak services industries and restricted travel. But the wave of stimulus buoying consumption has inundated the supply side the manufacturers of goods that often rely on global distribution chains.
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By Brendan Murray (Bloomberg) Container shipping rates are heading higher again, driven to new heights by unrelenting consumer demand and company restocking from Europe to the U.S. that are exhausting the world economy’s capacity to move goods across oceans.
After peaking in late 2020 and not budging much through the first quarter, the rate for a 40-foot container to Los Angeles from Shanghai hit $4,403 last week, the highest in Drewry World Container Index data going back to 2011. Cargo shippers on less-traveled transatlantic routes are feeling the sting, too: Rotterdam to New York surged to a record $3,500.
Tender rejections down for first time in weeks is this progress? 6 minutes read
Last week’s DHL Supply Chain Pricing Power Index:
The
FreightWaves
The Pricing Power Index is based on the following indicators:
Load volumes: Absolute levels positive for carriers, momentum neutral
The Outbound Tender Volume Index (OTVI) on a national level has shown very little volatility over the past three weeks, walking along the x-axis at ~15,300. At the same time, tender rejections have taken a meaningful leg down, suggesting that freight demand is even stronger now than at the beginning of April.
Geographically, over the past week southern port cities have seen growth in outbound tenders. This trend should continue at most ports around the country over the next several months. As FreightWaves’ Greg Miller wrote Monday, maritime operators and importers are bracing for a shipping tsunami. Nerijus Poskus, vice president of global ocean at freight forwarder Flexport, warned the situ