Freight-rate boom hints at smooth sailing for Korean shippers
OCEAN freight rates are up three times higher on the year, meaning the firmness of pricing could remain and help Korea's shippers, reports Korea Joongang Daily
07 February 2021 - 19:00
The Shanghai ContaineriSed Freight Index (SCFI) averaged 999.3 in January 2020, while it's now 2,870 points. The figures have been climbing every week due to the resumption of manufacturing in China since October 9.
'Strong freight rates are projected to persist until China's New Year holiday in February. Even after that, it is possible that strong demand and tight capacity could keep prices firm,' said analyst Bang Min-jin.
The Lunar New Year holiday usually causes a ship transportation surge as exporters transport products for the long holiday, resulting in higher shipping prices.
If the demand stays high, a lack of containers and congested ports could escalate the freight charges even more.
The delivery period is longer in countries with larger areas, such as the US and China, where shipping demand is concentrated.
'Since around June last year, relief funds from the United States resulted in skyrocketed overseas purchases, which coincided with China's resumption of manufacturing activity after its recovery from Covid-19,' said Hyundai Merchant Marine (HMM) representative Kim Seong-min.
'Because supply of ships can't be adjusted in the short term, the sudden surge in demand on the Asia-US route has resulted in a lack of supply for other routes, like Europe, ultimately pulling up the freight rates for all routes,' said Mr Seong-min.
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