Sea freight has skyrocketed by 500%, why is it hard to find a container?

Starting from the second half of 2020, the freight rates of international shipping have risen significantly, and many cities within China have seen a situation where it is difficult to find a container.

At present, the shipping cost of 40-foot containers from China to the United States has reached about 20,000 US dollars, and the shipping cost to Europe has also risen to about 12,000 US dollars a year.

Among them, the freight rates of China-US routes have increased by more than three times compared with the beginning of the year, and have increased by more than 500% from last year’s lowest level.

However, even with the soaring freight rates, the number of containers shipped from China to the United States continues to increase. As a result, many ports in the United States have a backlog of goods, and many ships can only queue outside the ports.

With a large backlog of ships in US ports, many containers cannot be quickly returned to China, and the utilization rate of containers has been greatly reduced. As a result, domestic container supply has become very tight, and many cities have encountered a situation where it is difficult to find a container…

So why does this happen? Everything has to start with the new coronavirus epidemic.

After the outbreak of the new coronavirus in 2020, the production and life of many countries have been greatly affected. In particular, there are more confirmed cases in European and American countries. As a result, many factories are unable to operate normally, and the supply of goods has been affected. Influence.

By adopting scientific prevention and control measures, China has brought the epidemic under control around May 2020. Starting from the second half of 2020, China’s production and life have returned to a normal state.

In this context, many international orders have flowed to China, and the export value of many Chinese companies has seen substantial growth.

For example, in 2020, the total value of bilateral trade in goods between China and the United States reached 4.06 trillion yuan, an increase of 8.8% year-on-year; of which, China’s exports to the United States were 3.13 trillion yuan, an increase of 8.4% year-on-year.

Many of these items have experienced an increase of more than 20% in exports. For example, the export of notebook computers increased by 23.4%, and the export of medical materials and medicines increased by 30.7% year on year.

After entering 2021, China’s exports to the United States have grown faster.

According to data released by the Ministry of Commerce, in the first seven months of 2021, the total bilateral trade in goods between China and the United States reached 2.62 trillion yuan, a year-on-year increase of 28.9%, of which China’s exports to the United States were US$1.96 trillion, a year-on-year increase of 25.9%.

There are two reasons why China’s exports to the United States have increased so much:

First, other countries have been affected by the epidemic, their production capacity has declined, and many orders have been transferred to China.

In 2020, the epidemic has spread to countries around the world. Affected by this, the industrial production capacity of many countries has experienced a significant decline. As a result, many orders can only be transferred to China. For example, India, as one of the most severely affected countries in the world, has many factories closed or closed. As a result, many international orders have shifted from India to China.

Another example is the recent rebound in the epidemic in Vietnam. Many cities in Vietnam have begun to be closed, and many industrial zones have also been closed. As a result, the production capacity of many electronic products and textile products has also declined, and many international orders have begun to shift to China…

With the continuous increase in international orders, domestic exports have grown rapidly, and everyone’s demand for containers has also increased significantly.

Second, the US dollar is over-issued.

Starting in March 2020, to stimulate the economy and rescue the stock market, the United States has launched an unlimited QE policy, releasing a large amount of liquidity to the market.

Some of these over-issued US dollars were sent directly to the public, once last year and again at the beginning of this year; and part of them was lent to small, medium, and micro-enterprises in the United States at a very low cost or even zero interest.

After the U.S. people have more U.S. dollars on hand and small, medium, and micro enterprises have more U.S. dollars on hand, they began to use them to purchase various items. Many of the items imported by the U.S. were imported from China, which resulted in rapid trade between China and the United States. Growth is also a means for the United States to export inflationary pressures.

Affected by the above two factors, the trade between China and the United States has grown rapidly over the past year or so, and China’s exports to the United States have continued to rise, and everyone’s demand for containers has also grown rapidly.

At the same time, the epidemic situation in the United States is relatively serious, and domestic ports and warehouses are relatively short of labor. As a result, many ships cannot unload and carry goods in time after arriving at the port. Eventually, a large number of ships are queued at the port, which further affects the efficiency of container operations. This makes it hard to find in China.

The difficulty of finding a container has resulted in a rapid increase in freight rates. In the end, although the export value of the company has increased, the cost has increased. Coupled with the depreciation of the US dollar, most of the profits earned are nothing more than paper wealth.