According to a report on January 23 by the German news television channel website, the freight industry is currently booming. Sufficient orders and full load of ships have led to a steady increase in container freight prices. Both Maersk Line and Hapag-Lloyd Shipping Co., Ltd. profited from the sharp increase in prices. But there is also a downside. Consumers must pay for traffic jams, transportation bottlenecks and port chaos.
The report said that for this once troubled industry, the new crown “roller coaster journey” in 2020 seemed to be over easily. While the global economy is still under the impact of the second wave of pandemics, the business of freight forwarders has shown a rapid and completely unexpected recovery. Whether it is new furniture or a bicycle that can be used for exercise at home, consumers are increasingly eager for new products. As a result, the demand for containers that can transport Asian consumer goods to the West is also increasing.
Rolf Haben Janssen, President of Hapag-Lloyd, told the German News TV channel: “The first quarter was good but the second quarter was very weak. Since the third quarter, people could have see demand rise again. People buy more goods because they can’t go on vacation or eat in restaurants.” He hadn’t estimated this change before.
The report pointed out that the main reason for the growth of container business was the high demand and the limited supply of cargo capacity. This was a “bottleneck problem”. The Financial Times quoted Lars Jensen, who works for a container freight analysis agency, as reporting that “prices are determined by customers competing for limited resources (containers).” The result was freight prices have increased significantly. According to industry information, the transport of standard containers on the route from Asia to Northern Europe was more than 4 times more expensive than eight weeks ago, at a cost of $9,000.
A freight forwarder in the UK even encountered a high price of US$12,000 per container. The Financial Times quoted the British Household Appliance Manufacturers Association as reporting that, in some cases, transportation costs have exceeded the profit from the sale of goods and importers must sometimes pass these costs on to the final consumer.
However, stock traders were very satisfied: Since November last year, the stocks of Maersk and Hapag-Lloyd have climbed by more than 50% and 100% respectively.