MEKSEA.COM –  Supply chain disruptions due to the impact of the Covid-19 pandemic lead to the global shipping crisis in 2021. The ongoing crises have pushed ocean freight rates to record highs. This has threatened businesses that depend on shipping routes.

Mrs. Nguyen Thi Thanh Thao – Import-Export Director, Mekong Seafood Connection

According to Mrs. Nguyen Thi Thanh Thao – Import-Export Director, Mekong Seafood Connection (Meksea), freight rates have increased since the outbreak of the covid-19 epidemic. It can be seen that the initial cause comes from the fact that shipping lines have reduced the number of large ships as well as limited the number of trips, leading to a significant increase in the cost of anchoring ships at ports. As a result, the import and export process is more difficult and severe lack of empty containers.

First crisis is a shortage of empty containers in early 2021. After overcoming a difficult 2020 due to the covid-19 outbreak, the world’s economies start to recover at a significantly fast speed. This leads to a lack of containers due to a wave of purchases. Therefore, the transportation of goods from China to Europe and the US was delayed, businesses and consumers suffered from high prices.

Second crisis is the disruption at the Suez Canal. On March 23, the Evergreen – one of the largest container ships in the world, was stuck in Suez Canal on its way from Asia to Europe. The incident caused the movement of other ships in both directions on the Suez Canal to be halted, causing congestion in one of the world’s busiest shipping lanes. As a result, the international flow of goods worth $9 billion a day is severely disrupted.

Third crisis is the disruption of seaport’s operation in Southern China due to covid-19 epidemic broke out again. Provincial governments were forced to order the closure of many areas and businesses to prevent the virus from spreading. It led to congestion at major ports in Shenzhen and Guangzhou. As a result, congestion at major seaports, delays in deliveries have blown up already high transport prices even higher because of the length of time cargo ships wait at the port.

Disruption at major ports in China has blown up already high freight prices even higher. (photo: Internet)

Faced with that situation, in September, the CMA-CGM carrier made a move to stop increasing spot prices on its routes. Following that, the German shipping company – Hapag-Lloyd also made a similar move after many months of sharply increasing freight rates. This has created an optimistic signal for businesses with high demand in shipping at the end of the year.

However, the announcements by CMA CGM and Hapag-Lloyd so far have only emphasized freight rates without mentioning additional fees. This means that businesses will face large fees such as peak-season surcharge or port congestion surcharge, etc. Therefore, according to Meksea’s representative, international transportation costs will continue to increase in the coming time, especially the peak season at the end of 2021 and even into 2022.

In addition, a representative of the Booking Department – Mekong Seafood Connection said, “Fact in the Vietnamese market it is very difficult for small FWD companies to get a booking and the number of seats very few. In particular, it’s more and more difficult to get a booking for routes going as far as Europe, the US, and Canada because some shipping lines revoke bookings for the reason of “full ship”. Therefore, in the coming time, businesses will not only face freight rates but also bookings.”

It is difficult to get a booking for routes going as far as Europe, the US, and Canada because of “full ship”. (photo: Internet)

In that situation, previously, not only Vietnam but many other big countries also asked to stop raising rates. However, freight rates are still increasing week by week and there is no sign of suspension. Specifically, shipping rates in 2021 increase by 10 times compared to 2020.

Once again, Mrs. Thao hopes that customers can shorten the time to pay for goods to business pay for logistics fees, as well as sympathize with Meksea in this situation of force majeure because currently the container line schedule reliability is at a record low, only 33.6%.

(hayati@mekseaconnection.com)
By Rei/Hayati (MekseaTeam)

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