Since the beginning of this year, the bottleneck problem in the international shipping industry has been particularly prominent. Newspapers are common in congestion incidents. Shipping prices have risen in turn and are at a high level. The negative impact on all parties has gradually appeared.
Frequent incidents of blockage and delay
As early as March and April this year, the blockage of the Suez Canal triggered thinking about the global logistics supply chain. However, since then, incidents of cargo ship jams, detention in ports, and supply delays continue to occur frequently.
According to a report by the Southern California Maritime Exchange on August 28, a total of 72 container ships berthed at the ports of Los Angeles and Long Beach in one day, exceeding the previous record of 70; 44 container ships berthed at anchorages, of which 9 were in The drifting area also broke the previous record of 40 ships; a total of 124 ships of various types were moored at the port, and the total number of ships moored at anchorage reached a record 71. The main reasons for this congestion are labor shortages, pandemic-related disruptions and a surge in holiday purchases. California ports in Los Angeles and Long Beach account for about one-third of U.S. imports. According to data from the Port of Los Angeles, the average waiting time for these vessels has increased to 7.6 days.
Southern California Ocean Exchange executive director Kip Ludit said in July that the normal number of container ships at anchor is between zero and one. Lutit said: "These ships are twice or three times the size of those seen 10 or 15 years ago. They take longer to unload, they also need more trucks, more trains, and more. More warehouses to load."
The freight index remains high
The incident of shipping blockage and detention reflects the situation that due to the rebound in demand, epidemic control measures, the decline in port functions, and the decrease in efficiency, coupled with the increase in ship detentions caused by typhoons, the supply and demand of ships tends to be tight.
Affected by this, the rates of almost all major trade routes have skyrocketed. According to data from Xeneta, which tracks freight rates, the cost of shipping a typical 40-foot container from the Far East to Northern Europe has soared from less than US$2,000 to US$13,607 last week; the price of shipping from the Far East to Mediterranean ports has risen from US$1913 to US$12,715. US dollars; the average cost of container transportation from China to the west coast of the United States increased from 3,350 US dollars last year to 7,574 US dollars; shipping from the Far East to the east coast of South America increased from 1,794 US dollars last year to 11,594 US dollars.
Multiple negative effects emerge
The multi-party influence caused by shipping congestion and rising freight rates will gradually appear.
Delays in supply and rising prices have a significant impact on daily life. According to reports, McDonald’s restaurants in the United Kingdom removed milkshakes and some bottled beverages from the menu and forced the Nandu chicken chain to temporarily close 50 stores.
From the perspective of the impact on prices, Time magazine believes that because more than 80% of the goods trade is transported by sea, soaring freight rates are threatening the prices of everything from toys, furniture and auto parts to coffee, sugar and anchovies. Exacerbated concerns about accelerating global inflation.
The Toy Association stated in a statement to the US media that supply chain disruption is a catastrophic event for every consumer category. "Toy companies are suffering from a 300% to 700% increase in freight rates... Access to containers and space will incur a lot of heinous additional costs. As the festival approaches, retailers will face shortages and consumers will face more High price."
For some countries, poor shipping logistics has a negative impact on exports. Vinod Kaur, executive director of the Indian Rice Exporters Association, said that in the first three months of the 2022 fiscal year, basmati rice exports have fallen by 17%.
For shipping companies, as the price of steel rises, shipbuilding costs are also rising, which may drag down the profits of shipping companies that order high-priced ships.
