Constrained shipping capacity and high freight rates will continue to weigh on the global market this year as the impact of the COVID-19 pandemic on global supply chains is still out of sight, said the managing director of China International Marine Containers (Group) Ltd, or CIMC, the world’s largest supplier of shipping containers by production volume.
Mai Boliang, chairman of CIMC, based in Shenzhen, Guangdong Province, said earlier this week that the company had benefited from its booming container manufacturing business, with operating profit up 81% year-on-year to reach 13.47 billion yuan ($2.11 billion) in 2021. Container orders remained full for the first and second quarters of this year.
Industry experts said the dual impact of the pandemic and geopolitical tensions will hamper global port and inland transport operations this year.
Global container capacity will be tighter as many containers will remain empty when returning from their journey after cargo delivery, which has affected the efficiency of container rotation.
The container market will remain tight due to low container availability in many countries this year, said Dong Liwan, a professor of shipping management at Shanghai Maritime University.
Given the complexity of the pandemic situation overseas, significant congestion and delays could lead to lower efficiency of the entire supply chain. But blindly increasing transport capacity and container supply won’t really solve these problems, Dong warned.
A study by the Beijing-based China Council for the Promotion of International Trade found that although many parties, including government branches, export-oriented manufacturers and shipping container suppliers, have all stepped up their efforts To solve the container supply problem and meet the demand for containers from Chinese exporters in 2021, tight transportation capacity and high freight rates remain unresolved issues.
Therefore, it is vital for the government to promote cross-border logistics cooperation under regional trade pacts such as the regional comprehensive economic partnership agreement and support enterprises capable of building overseas warehouses, Zhou said. Zhicheng, a researcher at the China Federation of Logistics and Purchasing.
The government should also roll out more pro-foreign trade policies and keep industrial and supply chains running smoothly, he said.
Thanks to the efforts of many countries to boost foreign trade and maintain the order of operations in various ports, the cost of international logistics has dropped significantly in recent months, according to information released Monday by the Chinese National Textile and Textile Council. apparel, headquartered in Beijing.
Sea freight per cubic meter of cross-border e-commerce export commodities fell from a peak of 30 yuan ($4.72) last year to around 16 yuan in early March, while air freight per kilogram fell from 80 yuan to more than 30 yuan.
Shipping costs for a container shipped from Shenzhen ports to US West Coast ports have also risen from $17,000 last year to between $8,500 and $9,000 this month.
Although several Chinese cities have imposed containment measures to prevent the spread of COVID-19, the Shanghai International Port Group and the ports of Shenzhen have all maintained normal operations, according to customs authorities.