Container shipping bullish amid pandemic
KUALA LUMPUR (23 July 2021) – The cost of freight containers have more than quadrupled since last year as global demand outstrips supply due to container shortages and port congestions in Europe, US and China, says Tan Kim Yong, deputy group Chief Executive Officer of Tasco Bhd.
In a report by The Edge Markets, the average price world to ship a 40 foot container (FEU) has more than quadrupled from a year ago, to US$8,399 (MYR35,481.58) as at July 1, according to London-based Drewry Shipping Consultants Ltd.
“Container freight rates are at historical highs. In January, spot freight rates were US$4,000 (MYR16,898) per FEU and are now at US$6,000 (MYR25,347). This time last year, the rates were US$1,500 (MYR6,336.75). Ocean freight rates from Asia to Europe and the US have risen the most, but rates for intra-Asia routes have gone up as well,” Tan says in the report.
The report further added that Tan mentions the rates started edging upwards from 3Q 2020, owing to imbalanced container trade, with full containers entering the US and Europe but returning empty to China, whose economy has recovered faster from the pandemic than any other big economy.
Tan expects container freight rates to remain high this year as demand continues to outstrip capacity, benefiting both liner operators and non-vessel-owning common carriers such as Tasco.
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