— This is the script of CNBC's news report for China's CCTV on May 28, 2021, Friday.
British company Drewry published new readings of the Drewry World Container Index on May 27, showing the index increased 2% from last week. The shipping rate for a 40-foot standard container rose to $6,256.93, 292.2% higher than a year ago.
Among the eight major routes tracked by Drewry, freight rates went up for all except the Shanghai-New York route which dipped slightly. Rates for the Shanghai-Rotterdam route exceeded $10,000 for the first time, recording a 485% annual increase to $10,174. Rates on the Shanghai-Genoa route also moved near the $10,000 mark, hitting $9,662, 406% higher than a year ago. Both are the highest in records going back to 2011.
In addition to the Asia-Europe route, the freight rates for Asia-U.S and Europe-U.S. routes have been on an upward trend. This reflects the growing international trade as the pandemic eases off in some markets and economies improving. The latest data from the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) signal a similar trend. The UNCTADT said earlier in May that the global trade volume in the first quarter of this year increased by 4% from the previous quarter and 10% year-on-year. Developing countries performed better than developed countries, largely because of East Asia and Pacific economies. The WTO expects that international trade will grow by 8% this year after having fallen 5.3% in 2020.
Executive director of the Port of Los Angeles
"We saw cargo volume dip to about 50% of normal last March. And then during the summertime, we began to see imports really pick up where we've now been averaging more than 900,000 container units a month for about nine straight months. The cargo ship started backing up in November. And we're sitting for a couple, maybe three days. And then we peaked out in February with 40 container vessels sitting outside of our breakwater at anchor. And the average time sitting was about eight days. "
Globally, congestion has become a common problem for many major ports, due to a strong rebound in demand, safety control measures, and the imbalance of growth and trading between countries. According to an analysis by Denmark-based Sea-Intelligence ApS, only about 40% of container ships globally arrived at ports on time in March, which was better than February but far behind the average level of the previous two years, when 70% of ships arrived on time. Delays and congestion will push shipping rates higher, bringing burdens for importers who may hence pass the additional costs onto consumers.
It's worth noting that in addition to the Indian seafarers' restrictions due to the new Covid wave, Singapore, a major global shipping hub, is also under stricter safety controls. These may impact the shipping market altogether.