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Capacity and freight rate fluctuations under the COVID-19 pandemic

Jul. 17, 2020

In the first half of this year, due to the impact of the COVID-19 pandemic, the global economy was hit hard, and the import and export trade was depressed, the shipping capacity of multiple ports declined. As a result, many shipping companies suspending multiple routes in order to reduce costs. In China, Week 28 to week 33, 133 voyages were suspended, Ningbo Zhoushan Port had the largest number of suspensions: 34; Shanghai Port followed with 31. Among the northern ports, 18 routes were halted in Qingdao Port, and there was a jump in port. Among them, 12 Central and Northern Europe routes were suspended. Among the southern ports, 23 were suspended in Yantian Port, 4 were suspended in Hong Kong Port, and 8 were suspended in Xiamen Port. As the continuous decline in capacity has driven the spot price to continue to rise, the spot price of Asia-Europe Shipping has risen again last week, pushing the global average price to a five-year high. In the European container shipping market where capacity is still limited, as demand slowly recovers, freight rates therewith is also continuing to grow. According to incomplete statistics, taking Shanghai as an example: the freight rates from Shanghai to Rotterdam and Shanghai to Genoa increased by 11% and 9% from week to week respectively. After that, the spot exchange rate from Shanghai to Rotterdam rose by 26% from a year ago, and the spot exchange rate from Shanghai to Genoa rose by 25% year-on-year.

The above is the root cause of the recent sea freight rate soaring. Our company adheres to the principle of reducing the loss of the consignee, and advises the consignee to make every effort to ship as early as possible to minimize costs and increase the price competitiveness of the goods.

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