According to Alphaliner's forecast, ship supply will increase by 8,2% this year and 8,9% in 2024, while freight demand will increase by 1,4% this year and 2,2% in 2024. when the slowdown in global container shipping will end remains uncertain. Due to the strict controls of EU countries, shipping companies are reluctant to ship e-commerce goods. According to Sea Intelligence, the punctuality of shipping lines continues to improve and has returned to pre-pandemic levels.
- Sea freight
China's imports and exports reached ￥13,32 trillion in the first 4 months of this year. which means an increase of 5,8% y/y. Out of this, exports reached ￥7,67 trillion, an increase of 10,6% y/y. In April this year China's imports and exports to Europe amounted to ￥1,8 trillion in 4,2, up 13,5% and accounting for 1,17% of total international trade. Of this, exports to the EU reached ￥3,2 trillion, an increase of 631,35%, and imports of 5,9 billion, an increase of XNUMX%.
Shipping companies said empty containers are still piling up in Chinese ports and demand for ships is weak.
Industry insiders believe this is because the increase in exports is mainly due to the increase in sales of new/alternative energy vehicles, lithium batteries and solar cells, which are of high value and are not usually shipped in containers. Much of the trade in traditional products still faces major challenges and difficulties.
Apart from a slight improvement on some routes, such as China-South America and China-Russia, performance on other routes remains slow.
According to Sea Intelligence, the punctuality of shipping lines continues to improve and has returned to pre-pandemic levels.
With current warehousing costs well above the long-term average, efforts are being made to keep inventories down, limiting the possibility of bulk imports.
According to Alphaliner's forecast, ship supply will increase by 8,2% this year and 8,9% in 2024, while freight demand will increase by 1,4% this year and 2,2% in 2024. when the slowdown in global container shipping will end remains uncertain.
However, most shipping companies are actively adapting their strategies to capitalize on their business. Thanks to the huge profits they have achieved in the last 3 years, they are able to meet the challenges of the coming time.
Taiwanese Shipping Companies Q2023 XNUMX Profits:
– Evergreen Marine Corporation reported revenue of NT$66,82 billion (approx. USD 2,17 billion), down 95% year-on-year, and a net profit of NT$5,043 billion (approx. USD 164 million).
– Yang Ming Marine reported sales of NT$36,953 billion (approx. USD 1,22 billion), down 65% year-on-year, and a net profit of NT$3,401 billion (approx. USD 112 million), which represents a significant decrease of 94% year-on-year.
– Wan Hai Lines posted revenues of NT$25,558 billion (approx. USD 830 million), a significant decrease of 68% year-on-year, and a net loss of NT$2,118 billion (approx. USD 68,78).
Current spot freight rates:
- Shanghai-Rotterdam: $1605/FEU, down 2% weekly
– Shanghai-Genoa: $2207/FEU, down 1% weekly
Spot rates from shippers - from major Chinese ports to ports in China
– From major Chinese ports to:
-Southampton/Felixstowe/Le Havre/Antwerp/Hamburg/Rotterdam: $875/TEU and $1275/FEU
-Gdańsk: USD 875/TEU, USD 1325/FEU
- Railway transport
This year marks the 10th anniversary of the Belt and Road Initiative and the 10th year of operation of the China-Europe rail freight service. Until May 10. In 2, 715 trains were handled at Horgos Railway Port, an increase of 22,9% year-on-year. 2 trains were handled at the Alashankou Railway port, an increase of 317% year-on-year. In total, in transit between China and Europe (Central Asia), 12,3 trains were handled through both ports, which means an increase of 5% year on year.
The current delivery time from China to Europe remains favorable with an average of 15 days from Xi'an to Małaszewicze in Poland. However, due to the reduction in the number of trains to Europe, customers are advised to book 7-10 days in advance.
Russia remains the main destination for most trains. However, as Russia's purchasing power declined and sea freight capacity increased, rail freight rates to Russia fell.
In 2022, rail freight transport from China to Poland decreased by 21,5% year on year. In the first quarter of 2023, there was a further decrease of 29% year-on-year. Some industry experts believe this downward trend will continue. However, the main reason for the decline is not the Russia-Ukraine conflict, but extremely low ocean freight rates.
Cold chain products are shipped by rail
On May 7, A refrigerated container train carrying meat from Moscow to Chengdu arrived in China via Alashankou Railway Port and is expected to arrive in Chengdu this week. This is the first refrigerated rail transport since the outbreak of COVID -19. May 9 20 tons of processed Sichuan eel products were exported to Russia for the first time. It is said that importing meat from Europe by rail can save about 45 days compared to sea freight and about ￥10.000 per tonne compared to air freight.
- Road transport
Due to the strict controls of EU countries, shipping companies are reluctant to ship e-commerce goods. As such, large shipments have yet to start. The volume of road cargo from China to Russia also decreased significantly. Productivity at the China-Kazakhstan border has reached its highest level since the COVID-19 outbreak, with border crossings in 1-2 days. Foreign trucks can enter China for loading, and drivers can stay in China for 48 hours.
Freight rates from China to Kazakhstan have also dropped noticeably, the lowest being $6.500 for a full load. Freight rates from Kazakhstan to Europe range from $8 to $000 for a full load. So the total cost is around $9 to $000 per FTL.
On the Polish-Ukrainian border in Dorohusk, a group of Polish drivers protested against investments by Belarus and Russia in new transport companies on Polish territory. They demanded that trucks registered in Belarus and Russia be banned from entering Poland, that companies with Belarusian and Russian capital be suspended, and that Ukrainian carriers be restored to the right to obtain Polish permits and operating licenses.
This event will have a significant impact on transport costs and times for all goods entering and leaving the EU. Due to the border problem between Poland and Belarus, all freight forwarders will direct their trucks through Lithuania, Latvia and Estonia instead of Poland as a transit country. This will undoubtedly lead to traffic congestion and significant delays in freight traffic.
(1) EU-China Investments
In 2022, trade between China and the EU will reach USD 847,3 billion, up 2,4% year-on-year, with an average value of over USD 1,6 million per minute. Trade in green products such as lithium batteries, new energy vehicles and photovoltaic components is growing rapidly.
In 2022, European investments in China will reach USD 12,1 billion, an increase of 70%. The automotive sector remains the biggest hotspot for investment. Chinese investments in Europe amount to USD 11,1 billion, an increase of 21%, with new investments in new energy, cars, machinery and equipment.
(2) Internationalization of RMB
Brazil's Suzano SA, the world's largest producer of hardwood pulp, is considering selling its products to China in RMB. Pakistan could pay for oil imports from Russia in RMB.
(3) Car shipping cost by sea
According to some estimates:
– A Tesla Model 3 with a capacity of approximately 12,53 CBM would cost $1.
– A BYD Tang SUV with a volume of approximately 16,25 CBM would cost $1.