It is difficult to predict the sustainability of freight rate increase next year

Early next year, the liner tariff may be due to certain special factors to increase the price! However, the supply and demand of transport capacity is the fundamental factor in determining the fluctuation of freight rates. Even if the freight rates increase early next year, it is difficult to predict the time and volatility of the sustainable development.

Many times the freight rates have risen repeatedly and failed to rise again. In this year, a number of liner companies repeatedly issued price hikes, but repeated calls rose repeatedly. The reason for the price increase is that the freight rate is too low, the cost is too high, the price of oil soars, and the profit is thin to a loss. The reason for the rise is that there is excess capacity, there are many containers, and some ships have to go up, and some ships do not rise. As the nacelle sails, the losses are even greater, and they have to maintain their original prices, and even drop their prices again. When the liner company just proposed to raise the price, the research institutions and the media's comments are expected to fail, and it is really miserable for the operators! A high-ranking officer of a liner company complained: "The current freight rate is forcing shipowners to burn money."

Idle transport capacity is conducive to freight rebound. In mid-November, a lot of news about container freight rates will be rising at the beginning of next year. I think this time may be different from previous ones. There may be price increases early next year! It is not because the capacity surplus will be eased by the beginning of next year. On the contrary, it may worsen, but because there will be changes in the mentality of the liner operators, that is, there will be changes in the determination whether to withdraw or partially withdraw their capacity.

When the phenomenon of overcapacity is barely exposed and difficult to distinguish, the general understanding of the industry tends to be “this is a temporary phenomenon,” and some individuals may also have taboos referring to the term “overcapacity,” because these words will reflect its stock price. . When the phenomenon of overcapacity is obvious, the smaller liner companies have been “devoid of the cold” at the low point of the main line, but they still expect that they will turn for the better instead of withdrawing; and those with larger scales can also rely on their strength. The profits of the previous stage and other route profits will support the losses in the mainline and will be even more reluctant to withdraw. According to Drewry’s statistics, the freight rate has dropped by 35% in the past 12 months, and the Asia-Europe This number! After the 12 months of suffering in the industry, the mindset began to change. So far, Asia-Europe Railways has five liner companies such as Wan Hai Shipping have withdrawn or temporarily withdrawn 5 lines of about 220,000 TEUs; Pan Pacific’s West Coast Line has 11 liner companies such as TCC and two alliances. A total of approximately 195,000 TEUs were withdrawn or temporarily withdrawn from the 13 lines. The Pan-European US East Coast Line had already withdrawn or temporarily withdrawn 2 lines of approximately 130,000 TEUs from South American ships and two alliances, totaling nearly six months in two years. 545 thousand TEUs have been withdrawn from the main line.

It is estimated that some liner companies can hardly continue to support all their routes at the end of this year and the beginning of next year, and they will have to withdraw some of their capacity again. The number of idle vessels will increase rapidly, which will have some mitigation effect on the current excess capacity, which will be beneficial to the growth of early next year. price.