The whole route rose, South America was the first to ship, and the freight rate rose to the sky
Release date: [2024/5/22]  Read total of [34] times

This round of freight price increase is mainly affected by many factors. First of all, the occurrence of the Red Sea crisis led to the strain of shipping capacity, shipping companies in response to the shortage of shipping capacity and took measures to stop shipping, further increasing freight rates. Secondly, the shortage of containers has also exacerbated the increase in container prices. In addition, with the recovery of demand in all continents, the demand for freight transportation increased, which also had a positive impact on the price of consolidated freight.


However, in this round of early arrival of the bulk transportation price surge, small and medium-sized freight forwarders did not get too much good. Due to the price increase of shipping companies, customers are more inclined to compare prices, and the competition between freight forwarders has intensified, resulting in more difficult business. Some freight forwarders said that they are now facing market conditions such as "difficult to obtain a container", "rising sea prices across the board" and "dumping containers", which have brought great pressure to the operation.


According to the latest edition of the Shanghai Container Freight Index (SCFI), the four major routes rose across the board, Europe rose slightly lower, the United States increased more significantly, the most ferocious increase is South America, South Africa and West Africa routes, and South America routes are rising sharply for several weeks. It is worth noting that the freight rate from Shanghai to South America's basic port market has doubled from the beginning of the year (January 5), an increase of 130.47%.


Recently, the global shipping market has seen a series of significant changes, especially in the South American routes. A number of shipping companies, including CMA CGM and COSCO, are increasing their capacity investment in the South American market and opening new South American routes. The move is in response to South American countries such as Brazil increasing import taxes on items such as electric cars and solar panels. Due to the increase in tariffs, many customers want to be able to ship to South America first to avoid the increased tariff costs.


According to the website of China's Ministry of Commerce, Brazil has decided to impose a 10.8% MERCOsur external uniform tariff on photovoltaic module products, but in order to adapt the market to this new regulation, the relevant agencies have set a tax-free quota that will decrease year by year until 2027. Since 99% of Brazil's solar panels come from China, the sooner Chinese PV companies can export to Brazil, the less tariff restrictions they will face.


In terms of electric vehicles, Brazil also plans to increase import tariffs on electric vehicles in a gradual manner, with the tax rate increasing to 35% by 2026, while the zero-tariff import quota will be reduced year by year until it is abolished in 2026. The policy change has led Chinese automakers to ramp up exports, with South America becoming an important market.


Due to the shortage of ro-ro shipping capacity, container shipping has become one of the alternatives to automobile transportation. Recently, the shipments of some car companies such as BYD have increased significantly, resulting in some freight forwarding space being occupied by these car companies. In addition, freight rates on West African routes are rising as capacity from West Africa is redeployed to South America.


According to the data of the Shanghai Shipping Exchange, in China's export container freight index on May 17, the South American route, the East-West Africa route, and the South African route rose higher, reaching 15.9%, 14.1%, and 11.7% respectively. Especially in the African route, the freight of individual points has risen to $10,000 a container, while in the off-season, the cost is only $2,000 to $3,000. The cost of shipping on South American routes has also risen from the usual $2,000 to $3,000 to about $7,000.


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