Global container shipping vessels top full capacity
As the Red Sea crisis worsens, almost all global container ships are passing via the Cape of Good Hope. Ships from the East moving towards the West are delayed by approximately 12 days due to be forced to use longer routes. With the US imposing sanctions on China, Chinese exporters are rushing to export as much as goods from Far East China to the West prior to the deadline. The demand for container ships has risen as the global liner vessel fleet has reached the maximum of 30 million TEU’s (twenty foot equivalent units).
Explaining this Nilud Fernando, an expert in International Shipping and Logistics, said: “As the global trade via sea claims to hold 80 per cent, the container fleet capacity is expected to have a growth rate of 10 per cent this year due to the high demand as more ships and containers are required to navigate goods from the East to the West.”
However, carriers should be more conservative in exposing capacity to trade as an increased influx of supply may lead to freight rate instability, resulting in revenue deterioration which the world saw in the post COVID-19 period, he added.
Shipping freight rates from Far East China to the USA are reaching between $8000 to $9000 per 40 foot container while for the Far East China to Europe the rates are fluctuating between $6000 to $7000 in these niche markets. As for freight rates except the Indian subcontinent, such rapid increases are slow paced comparatively.
As certain west bound voyages skip Colombo, it is noted that these vessels absorb a few days delay to collect long idle laden containers at key transshipment ports, namely Singapore. Most Far East China vessels navigate at premium freight rates and carriers are pushed to prioritise those shipments over lower freighted shipments, which is called ‘right management strategies at crucial times’, noted Mr. Fernando.
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