September is the peak season for China-South America shipments. In order to meet the peak season demand, shipping companies have gradually increased their capacity. However, the good market performance has not improved. The market freight rates of most routes continue to rise, the composite index is steadily rising, and the space is difficult to find. The shortage of containers is getting worse!
With the continuous increase in freight rates on South American routes, bookings and shortage of containers have become more and more intense! Although some production activities have been affected to varying degrees under the epidemic, the demand for various materials in various countries of South American route destinations has continued to grow, which will promote a rapid increase in market volume during the peak season.
The rapid increase in transportation demand on South American routes and the serious shortage of shipping lines, especially the 40-foot-tall container, caused the supply of space on the routes to exceed demand, and the market freight rates continued to rise. The South American East Route Index was 1320.7 points, up 15.2% from the previous period; the South American West Route Index was 1603.2 points, up 35.9% from the previous period.
South American routes will be difficult to find before Oct.1 or even until the end of October, and freight rates will continue to rise. The reasons are as follows:
- China’s domestic exports have increased steadily. Due to the oversea epidemics, the imports shrank much. There is a shortage of exported containers; even if there are spaces, they may be short of containers.
- When the Mexico/Panama/South American nonstop ship of Maersk called at Ningbo Port on August 16, 2020 was detained due to the detection of Covid-19 from three crew members and missed Shanghai and Qingdao ports; it is said that the same happened to one vessel of ONE.
- The direct ship from China to South America West of Cosco at early of Sep.2020 is a small boat (<8000TEU), and space is not even enough for VIP guests like Hisense.
- The epidemic has caused people to pay more attention to Christmas and pray for safety. The current season is the peak season for Christmas cargos, and some orders must be dispatched no matter how high the freight is.
- The old ship needs to transform the desulfurization tower, and the new ship has not been launched yet.
- Due to the closure of the border for Covid-19, international crews cannot travel freely, resulting in a shortage of crews, and even an embarrassing situation where there are ships but insufficient crews.
All these factors will cause South American freight rates to reach new heights!