Author丨Hu Huiyin.
Editor丨 and Jia.
More than two weeks after the Red Sea crisis fermented, the Suez Canal was pressed the "pause button". Now, some navigators are beginning to announce the resumption of shipping in the Red Sea-Suez Canal channel.
On December 25, Maersk, the world's second-largest container shipping company, said plans were being developed for the first batch of ships to pass as a new multinational maritime task force would protect ships from attacks by Yemen's Houthi rebels and the company was ready to resume east-west routes through the Red Sea. At the same time, however, Maersk stressed that despite the security measures in place, the overall risk in the region has not yet been eliminated, and if the security situation changes, it will reassess and re-launch the diversion plan.
The Red Sea-Suez Canal is the main shipping route from China and other Asian countries to Europe, and its geographical location is not only important. Affected by this, the freight rates of the transportation market such as Asia and Europe have been most significantly affected. On December 22, the Shanghai Export Container Freight Index (SCFI) was reported at 125499 points, an increase of 148%, the highest point for the whole year. As of December 21, the average price of a 40-foot container has reportedly risen from $2,400** to $10,000.
Not only are ocean freight rates and containers** rising, but international oil prices have also continued since last week. These factors will indirectly push up the cost of cargo transportation and impact the global ** chain. Some analysts believe that there are two main scenarios to consider at present, one is that in extreme cases, the Suez Canal will be completely closed for more than one month;One is that most of the ships will pass normally under the escort condition within one month, and some ships will deviate. With Maersk announcing the resumption of sailing to the Red Sea, the market is more optimistic about the subsequent trend.
As the industry believes that other shipping giants are likely to follow Maersk's policy, the Red Sea crisis may weaken the disturbance of the ** chain, and the stock price of shipping stocks will fall. On December 26, some of the shipping stocks that rose first week but the decline narrowed.
The risk in the Red Sea region has not been completely eliminated, what is the trend of subsequent sea freight rates?At present, shipping has increased the cost of containerized goods, and how much impact will it have on global commodities?
The return of the merchant to the Red Sea is still unknown
Just two days before Maersk announced its return to the Red Sea shipping lanes, the shipping giant expects chaos in the Red Sea to continue for months.
Shipping giants have been grounding Red Sea sailings for more than a week. Subsequently, there was a "detour tide" in the container transportation market. On December 19, Maersk announced plans to abandon the Red Sea and Suez Canal routes, and all the company's merchant ships sailing between Europe and Asia will go around the Cape of Good Hope at the southern tip of Africa. After that, a number of container shipping companies followed Maersk's approach. According to the statistics of Easy Shipping on December 20, more than 80 ships have confirmed to detour the Cape of Good Hope on the Asia-Europe and North American routes.
The number of container ships passing through the Red Sea and the Gulf of Aden has been rapidly reduced. According to data from Clarkson Research Services, a shipping and offshore research institution, the total tonnage of container ships arriving in the Gulf of Aden between the 16th and 19th plummeted by 82% compared to the first half of this month.
The increased operating costs of transportation due to detours should not be underestimated. Chen Zhen, research director of shipping and commodity index of Founder Mid-term Research Institute, told the 21st Century Business Herald reporter that a number of leading companies have announced that they will no longer sail the Red Sea or cancel the Red Sea booking, and many liners have been forced to sail around the Cape of Good Hope, which will increase the voyage of 3000-3500 nautical miles, extend the sailing time by about 10 days, and the ship turnover efficiency will drop by about 30%, which will greatly consume capacity.
He believes that after the detour, the class will face a series of problems, one is a significant increase in costs due to rising operating costsSecond, the shipping schedule was disrupted, the ship turnover efficiency decreased by 30%, and the ship schedule rate decreased, which could not better serve the cargo owner;Third, the safety of navigation has encountered great challenges, because the Cape of Good Hope is close to the South Pole, at the confluence of the two major currents of the Indian Ocean and Antarctica, with a wave height of 15-20 meters and accompanied by rotating waves.
According to CITIC**, a bypass of the Cape of Good Hope will lead to a 26% and 51% increase in the duration of voyages from East Asia to Europe and East Asia to the Mediterranean Sea by 26% and 51% respectively compared to the Suez Canal. The transportation time of grain, coal and other goods from the Black Sea to the Far East and from the East of the United States to the Far East increased by 52% to 77%, and the transit time of the East LNG LPG increased by an additional 52%.
The increase in operating costs of the first class company, coupled with the reduction in the effective capacity level caused by frequent route adjustments, the short-term freight rate is facing a rapid surge. Up to now, the freight rate of the China-Europe route has risen sharply for five consecutive weeks.
On December 22, the latest weekly report on China's export container transportation market released by the Shanghai Shipping Exchange showed that the threat of armed attacks in the Red Sea region showed that the transportation market of Asia-Europe and other routes was **sharply**, driving the composite index **14.).8% to 1254At 99 points, the Shanghai Export Container Freight Index (SCFI) released on the same day was 1497 US dollars TEU, compared with last week's **455%, up 111 from five weeks ago7%；The freight rate of the Shanghai to Mediterranean route is 2054 US dollars TEU, which is **30 week-on-week9% from **79 five weeks ago1%。
In fact, before the outbreak of the Red Sea incident, major shipping companies began to raise freight rates several times in November. In the long run, there is excess shipping capacity, and the fourth quarter is generally the traditional off-season, and freight rates will face certain pressure. But what is special now is that the fourth quarter is the stage of long-term negotiation and signing, and the Red Sea crisis has occurred, so the major shipping companies have begun to raise prices for multiple rounds. Wu Yaocong, a macro researcher in Guangzhou, told the 21st Century Business Herald reporter that the superposition of the Red Sea crisis has led to a shortage of capacity, and short-term freight has fundamental support, and for shipping companies, short-term freight rises are also in line with the company's interests.
Under multiple factors, as soon as Maersk announced the resumption of Red Sea shipping, the market speculated whether other shipping companies would follow suit. Due to market speculation that shipping giants will most likely follow, on December 25, last week's top shipping stocks *** On December 26, the decline of shipping stocks narrowed, and Air China Ocean fell 31%, Ningbo COSCO and Phoenix Shipping both fell more than 2%, and Haitong Development, Jinjiang Shipping, Ningbo Shipping, Antong Holdings, and HNA Technology all fell more than 1%.
Senior researchers told the 21st Century Business Herald reporter that the decline in the share price of shipping stocks shows that the market believes that the event-driven will bring revenue opportunities for shipping companies, but it will not last too long.
But for now, it will not be easy for shipping companies to follow the resumption of sailing. For them, the safety of the waterway is a primary concern. Zheng Jingwen, a senior market analyst at the International Shipping Research Institute of the Shanghai International Shipping Research Center, told the 21st Century Business Herald reporter that at present, other teams are in a wait-and-see state, after all, although there are many first-class ships escorting, it is still unknown whether they can deter the Houthis in Yemen. Moreover, many ships have already begun to detour, and it is not realistic to want to restore the Red Sea route immediately.
According to CCTV News, although the United States previously announced in a high-profile manner that 20 countries have joined the so-called "Red Sea Escort Alliance", so far, Spain, Italy and France have made it clear that they are not willing to act under the leadership of the United States. Most of the remaining countries are willing to send only a symbolic small number of participants, and at least eight countries have requested anonymity.
The foreign trade industry between Asia and Europe was blocked
The attack not only led to an increase in the freight rates of merchant ships circumnavigating the Cape of Good Hope, but also saw a surge in freight rates when merchant ships re-entered the Red Sea, the Gulf of Aden shipping lanes, and even other shipping routes.
According to logistics industry insiders, the Red Sea flight disruption crisis has just begun, and all westbound routes in East Asia have been restricted, including to the Middle East, the Red Sea, North Africa, the Black Sea, the Eastern Mediterranean, the Western Mediterranean, and Northwest Europe. In this regard, Wu Yaocong said that since December 18, in order to reduce the risk, a number of shipping companies have notified the Red Sea to suspend all booking operations, adhere to the "no booking, no change, no change", superimposed before the Spring Festival is generally a small peak of shipments, market news said that the shipping space in January due to positive freight demand, the overall maintenance of a tight situation.
Due to the high cost of detours and the shortage of space on other ocean routes, more than one airline has announced surcharges.
On December 21, Maersk announced that due to "great operational challenges", from January 1, 2024, it will impose additional charges (i.e. an increase of $200 per TEU) on a large number of affected routes, not only on routes that need to be detoured, but also on routes departing from East Asia with a "peak season surcharge" and on other routes with an "emergency surcharge". CMA CGM, the world's third-largest container shipping company, announced a Red Sea surcharge of $1,575 per 20-foot dry container and $3,000 per reefer and special container.
Some freight forwarders believe that shipping ** may more than double early next year. However, the above-mentioned senior researchers told reporters that the long-term supply and demand of shipping is loose, and the rapid decline in the long term means that the market believes that the possibility of freight turning bearish after speculation increases.
On the other hand, insurance premiums have also increased significantly. Merchant ships entering the southern Red Sea or the Gulf of Aden route are required to purchase additional war insurance, and the cost of insurance for ships sailing through this area has skyrocketed. According to a person from the ship mutual insurance agency, on December 18, the insurance rate has risen to 05%—0.7%。For a $100 million vessel, this equates to $500,000-$700,000 per voyage. The rate earlier in December was only about 01%—0.2%。Obviously, the increased premiums will eventually be transmitted to the downstream of shipping, and the first to bear the brunt is the foreign trade merchants.
For foreign traders, cost is not their primary concern, they are more concerned about how to solve the transportation of goods. Zheng Jingwen said that in China, there will be a demand for goods before the Spring Festival shutdown of factories, but affected by the Red Sea incident, manufacturers and suppliers will want to ship in advance to avoid the extension of the chain time.
A freight forwarder told ** that the number of business inquiries for China-Europe trains under the Red Sea incident has more than doubled, and now some trains have been liquidated and cannot be booked. Although the China-Europe Express** is slightly higher than shipping, it is faster. Taking goods to Hamburg, Germany as an example, shipping generally takes 28 days, and now the detour takes another 10 days, while the China-Europe train to Hamburg only takes 17 days.
At present, all walks of life are concerned about when the Red Sea crisis will ease. Some analysts believe that if the Suez Canal is completely closed for more than one month, it may lead to the reshaping of the global commodity network. As one of the world's most critical shipping lanes, the Suez Canal handles about 12% of the world's cargo transportation with more than $1 trillion a year. In 2022, 45% of container capacity, 60% of car carriers, 10% of LNG carriers, 9% of oil tankers, 7% of liquefied petroleum gas (LPG) carriers, and 4% of bulk carriers passed through the Suez Canal in terms of ship tonnage, according to Clarkson data.
Wu Yaocong told reporters that according to the latest ship circumambulation, the loss of shipping capacity is about 7%, so the overall impact on the first chain, mainly reflected in the extension of the delivery period and the rise in transportation costs. Eventually, shipping costs will also be passed on to consumers, with about 10% to 20% increases for shipments to Europe.
Chris Rogers, head of research at S&P Global Market Intelligence Chain, believes that the industry with the greatest impact on transportation during the Red Sea crisis is the automotive industry, with about 40% of imported cars and about 20% of auto parts in Asia, and these goods will be delayed through this route.
However, at present, the global cargo transportation network is becoming more and more developed, and in response to this crisis, in addition to the way of sea reroute, air transportation and railway transportation such as China-Europe freight trains can also be used. Wu Yaocong further analyzed that the impact of the Red Sea incident is short-term, and with the gradual recovery of the situation, the impact on the long-term ** chain may be limited.
Zheng Jingwen also believes that although the passage of the Red Sea-Suez Canal channel is blocked, the shipping company has to carry out transportation through detours, breaking the original transportation arrangement, resulting in longer transportation time and higher costs. Even so, other transport lanes have not been affected.
She also stressed that from the perspective of the freight index, the current freight index has not yet reached the high point of 2021, "At that time, the data showed that the freight rate level from Asia to the West Coast reached $10,000, and when it was allocated to container goods, each commodity was about 5 to 6 cents in cost**." If you look at it this way, the impact of shipping costs on the cost of shipping goods will not be particularly significant. At present, the impact of sea freight on the cost of containerized goods is still controllable. ”
At the same time, with the Asia-Europe route blocked, major airlines are trying to find alternatives. Some of the experts also mentioned the Arctic shipping lane, which has the shortest sea distance between China and European countries.
It is understood that the Arctic shipping route is from the north of Russia near the Arctic navigation, once opened to navigation will be the third route from Asia and Europe to the east and west, known as the "Ice Silk Road". China and Arctic nations such as Russia are discussing joint development of an Arctic shipping lane that would bring East Asian countries closer to ports in other countries than they would have via the Suez and Panama Canals. In Chen's view, the waterway has great potential. "The waterway can bypass the Strait of Malacca and is of great strategic value to China and other East and South Asian countries," he told reporters. But because the shipping channel is close to the North Pole,Also be aware of the possible risks of ice, extreme winds, and storms in the channel.
sfc
Editor: Jiang Peipei, intern: Tan Yahan.
21 Jun recommended reading
Restore through the "Gate of Tears"?The Red Sea is in crisis.
Maersk announced plans to resume sailing to the Red Sea, and soaring freight rates dragged down the global foreign trade industry.
The disturbance of the Red Sea "attack on ships" does not change the medium and long-term excess capacity.