Thailand
Thailand: Container Rates From Asia to Europe Climb to 10-Year High
Container freight rates across the world’s busiest ocean trade route have soared to a 10-year high, adding to strains on major shipping lanes as Western retailers rush to restock ahead of the year-end holidays.
The average spot-market price to ship a 20-foot box from Asia to Europe hit $2,091 this week, according to the Shanghai Shipping Exchange, surpassing the $2,000 mark for the first time since May 2010. The rate has more than doubled from $1,029 at the end of August.
The surge follows a sharp increase in rates from Asia to the U.S., where they reached record highs in September ahead of holiday-season restocking efforts. The high prices, the result of a rush in demand that far outweighs shipping capacity, has jolted supply chains, triggering equipment shortages as shipping lines have raced to get vessels and containers in place to handle the loads.
“Europe is following the American surge in consumer online spending, compounded by increased imports of personal protection equipment and the pre-Brexit, U.K. stockpiling,” said Jonathan Roach, a container shipping analyst at London-based Braemar ACM Shipbroking.
Mr. Roach said that Asia-Europe third-quarter container volumes were up 20% from the second quarter and “we expect the upward momentum to be sustained into the beginning of 2021.”
Freight rates are expected to stay high into the first quarter as global supply chains continue to recover from the disruptions earlier this year caused by the Covid-19 lockdowns and then ease in the spring.
“The extraordinary consumer demand during lockdown has a time limit,” Mr. Roach said. “We expect consumer behavior to noticeably switch towards travel, entertainment and hospitality in the second half and demand for manufactured goods to return to more traditional levels.”
The high freight rates and a shortage of containers in the U.S. and other markets as operators rush empty boxes back to Asia for reloading have prompted angry reactions by U.S. agricultural exporters. Regulators in the U.S. and Asia have warned that they will investigate allegations of anticompetitive practices or delays in moving cargo.
Compounding the jump in Asian imports is the U.K.’s looming exit from the European Union on Jan. 1, amid ongoing talks on which products from both sides of the English Channel will be subject to customs and tariffs.
“U.K.-based importers are seeking to fill warehouse space ahead of this event,” market analytics company Platts said in a report last month. “With the picture still murky as to what shape the future relationship will take, importers are seeking to bring in goods ahead of the deadline.”
London-based property adviser Savills PLC said in a July report that the takeup rate for warehousing in London and England’s southeast in the first half stood at 4.56 million square feet, up 16% from the prior-year period and 74% above the long-term first-half average for the region. The largest deal was by e-commerce behemoth Amazon.com Inc., which committed to a 2.3 million-square-foot unit in Kent.
The import surge in the U.S. took off in midsummer after global trade nosedived in the spring because of the Covid-19 pandemic. Big U.S. retailers rushed to replenish inventories that had been depleted and started pulling in more goods from Asia to stock shelves and distribution centers as consumer sales rebounded.
Source: https://www.bangkokpost.com/business/2029827/container-rates-from-asia-to-europe-climb-to-10-year-high