FASHION IS A REINCARNATION. HISTORICAL PICTURE REPEATS FROM TIME TO TIME. PERHAPS EVERYTHING IS A CIRCLE.
I believe most of us must remember the days 4 years ago, mainly in 2020 & 2021. The shipping cost was crazily increasing by several times, ten times and ten plus times. Those days have been a hard time for almost every shipper & every consignee while it was indeed a grand Carnaval for ocean carriers, MAERSK, MSC, CMA CGM, COSCO, Hapag-Lloyd, ONE, EVERGREEN, HMM, YANG MING, WAN HAI…
From end of April, beginning of May, it came again! The ocean freight has been increasing every week. The shipping company’s Carnaval is on show!
| Destination | April 1st | May 1st | May 20th | June 20th | July 20th | August+ |
| Europe Basic | $3100/FEU | $3800/FEU | $6000/FEU | $6500/FEU | $8000/FEU | $10000+? Diamond rate |
| US West | $2600/FEU | $3100/FEU | $5025/FEU | $6200/FEU | $8000/FEU | $10000+? Diamond rate |
| South America | $2800/FEU | $4300/FEU | $6700/FEU | $7800/FEU | $9000/FEU | $10000+? Diamond rate |
In fact, May is regarded as a traditional slow season for sea shipping. This year it is totally a “spooky” surprise for global trade. The shipping cost spikes in this May.
Generally speaking, demand increase & container crunch are regarded as the push to the price soaring for this time.
We already learned that the Red Sea Crisis had brought a longer transit, plus the occasional bad weathers, which had led to vessel skipping ports. Therefore, the container shortage becomes more severe.
The Red Sea Crisis seems to be spreading to the Mediterranean according to recent broadcast, which further adds to the freight rates increase.
Regarding demand increase, I think most of us don’t really feel a prosperous business recently. How come there’s a demand increase? It’s actually something closely driven by political behavior.
- The South America tariff implementation has pushed some NEVs companies & PV companies to speed in shipping their cargos & necessary equipment before the date of the implementation. For example, the Chinese new energy automobile company BYD carries out a shipping plan of over 20000 containers to South America. This sudden increase had made some ocean carriers shift the capacity of other area to cater the shipping needs to South America.
- Besides, Trump might win the US election and impose a new tariff increase. Mexican ports might expect strike in next a few months. Amazon Prime Day is set in July. All those potential or expected events are pushing the ocean freight to soar.
However, is the increase really so much solid that it’s giving the ocean carriers no options but to make the price spike?
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NO, IT’S NOT. NOBODY BELIEVES THIS BULLSHIT. INSTEAD, THE FORWARDERS, SHIPPERS AND CONSIGNEES ARE ALL COMPLAINING THE OCEAN CARRIERS’ GREEDY INTENTION.
For example, the carrier breaks the long-term contract and imposes the short-term freight spot rate, because it’s more profitable. Where the hell is the contract spirit?
For this reason, US furniture company PKDC is now suiting ocean carrier CMA CGM claiming a twelve million US dollars compensation. CMA CGM breaks the long-term contract and sells the shipping space in a much higher price.
The recent experience for shippers sounds very ridiculous and dramatic. The shipper is hardly able to receive a confirmed quotation from carrier. When you receive a quotation, but you’re not able to book a shipping space. Even you successfully booked a space, the carrier might cancel it anytime or postpone your container loading to the vessel. All these phenomena are driven by the ocean carriers’ greedy nature. They want more money and they don’t care about what trouble brought to the rest of us. The shipping companies are really good at making good use of any crisis.
Business should not prevail in this way. We understand a stable price is so important for a long time & prosperous business. Hantai focuses on its major products, including firesleeve, fire tape, fire rope & thermal insulation fabric, and always adheres to the contract spirit, maintains stable prices and provides attentive service. All we aim for is a long-term & win-win situation for our customers. I believe, as long as many more companies insist in doing the right things, the business circle becomes more friendly for mankind.
The above content is originally created by Anhui Ningguo Hantai New Materials Limited Company. It shall not be copied or reprinted without permission. Hantai reserves its legal rights for prosecution.
