Chao News client reporter Tu Chenxin.
As a spillover from the Palestinian-Israeli conflict, the "Red Sea crisis" triggered by Yemen's Houthi attacks on merchant ships in the Red Sea has forced a large number of goods to bypass the Cape of Good Hope in South Africa, or switch to rail and air transportation, which has triggered a widespread chain reaction in all links of the global ** chain.
The busy Suez Canal. Source: Visual China.
International shipping giants such as Switzerland's Mediterranean Shipping, Denmark's Maersk, France's CMA CGM, and Germany's Hapag-Lloyd, as well as oil companies such as BP and Norges Petroleum have announced the suspension of Red Sea voyages. In China, COSCO Shipping, OOCL and EVA Shipping have given verbal notice to suspend cargo handling on the Red Sea route.
According to reports, the sea freight of a 40-foot large container from Shanghai to the United Kingdom on the 23rd was quoted as a staggering $10,000**, compared with $2,400 last week.
The international shipping situation has changed abruptly, who is the most affected?How do Zhejiang foreign trade and transportation enterprises feel?At a time when the traditional waterway has become a "high-risk route", what new changes are taking place in the logistics pattern of Asia and Europe?
Several companies in several countries have announced the suspension of Red Sea voyages. Source: Visual China.
Disasters do not go alone, and the cost of shipping has risen
The Red Sea, located at the junction of two continents, Asia and Africa, connects the Gulf of Aden through the Bab el-Mandeb Strait in the south and the Mediterranean Sea through the Suez Canal in the north. The Bab el-Mandeb Strait-Red Sea-Suez Canal route is the most convenient passage from the Indian Ocean to the Atlantic Ocean and one of the busiest maritime routes in the world. About 12% of the world's cargo, 30% of the world's oil transportation, passes through the Red Sea. At its peak, about 500 container ships passed through the Bab el-Mandeb Strait in southern Yemen, so many ships were within range of the Houthis.
S&P Global estimates that the distance from Rotterdam to Singapore on the Red Sea is 8,440 nautical miles (1 nautical mile is about 1.).852 km), the distance around the Cape of Good Hope reached 11,720 nautical miles. The detour will lead to a large backlog of containers at the port, disrupting the ** chain.
Maersk announced on the 22nd that it will charge a uniform freight rate of $200 per standard container for all routes around the Cape of Good Hope, which is also applicable to goods that have already sailed. Effective January 1, additional charges will be added to these charges, including an additional $1,000 per TEU for the East Asia-Mediterranean trade lanes and up to $1,300 for the Middle East-North America trade lanes.
According to Xinhua news agency, Maersk currently has nine routes from the Far East to Europe, eight of which start in China. One out of every three Maersk containers in the world is shipped out of China, and one out of every six Maersk containers is destined for China.
The world's largest container shipping company, Mediterranean Shipping, announced that it will directly increase the freight rate through the Mediterranean route to $5,000 per container from January 1.
Cargo platform Xeneta estimates that a vessel would consume up to $1 million in additional fuel costs for each round trip between Asia and Northern Europe if it were to change routes.
There has also been a sharp increase in insurance premiums, with the rate of war insurance falling from 007% rose to 01% to 02%。
The Panama Canal, another global shipping artery, is experiencing a drought, with water levels at record lows, leaving many ships to detour the Strait of Magellan in South America. In November, the number of ships in transit decreased by 22% compared to October.
December 12, Port of Haifa, Israel. Source: Visual China.
The economies of Israel and Egypt have suffered serious losses
The Houthis announced that their attacks had targeted all Israeli-related merchant ships in order to force Israel to cease fire in Gaza and open humanitarian corridors. In this crisis, Israel is also the country that has suffered economic losses, and Israel has also borne the brunt.
The Times of Israel reported that operations at Port Eilat have fallen by about 85 percent since the Houthi attack on merchant ships in the Red Sea. The port of Eilat is Israel's only cargo terminal on the Red Sea and is mainly responsible for the import of new vehicles and the export of potash fertilizers.
More and more shipping companies choose to avoid the Red Sea route, which will indirectly lead to the tight capacity situation in the Eastern Mediterranean. Li Zhenjie, an associate researcher at the Economic, Trade and Industry Investment Research Center of the Institute of Circum-Mediterranean Research of Zhejiang University of Foreign Chinese, told Chao News reporters that the first shipping port close to Gaza - Ashkelon Port in Israel has ceased operation, and the second largest port in Israel, Ashdod Port is still in a "state of emergency", and the capacity of Haifa Port, as a shipping hub in the Eastern Mediterranean, has also been greatly reduced, and the month-on-month decline rate of imports and exports through the port has exceeded the seasonal pattern of previous years.
According to Li Zhenjie, Israel's main export products include electronic components, pharmaceuticals, machinery products and chemical products, among which chips, potash fertilizers and pharmaceuticals are Israel's strong industries.
The Palestinian-Israeli conflict has had a great impact on the normal production and operation of Israeli enterprises, and because it is difficult for countries to find effective alternatives in the short term, some special areas may encounter a 'broken chain' crisis. Li Zhenjie gave an example: the EyeQ5 chip of the Israeli intelligent driving company Mobileye is very important to the European automotive industry chain, and the BMW Group, which has reached in-depth cooperation with Mobileye, may face the possibility of stopping production.
A recent study released by the United Nations shows that in addition to the severe impact on the economies of Palestine and Israel, the current round of the Palestinian-Israeli conflict will also cause at least $10 billion in economic losses to its neighbors Lebanon, Egypt and Jordan, and push 230,000 people into poverty.
Egypt is experiencing the worst economic crisis in decades, the Suez Canal transit fee is its most important foreign exchange**, the recent suspension of the Suez Canal-Red Sea route by a large number of shipping companies will lead to Egypt under greater pressure of foreign exchange shortage, and lead to import and export difficulties, foreign capital loss, financial market volatility and other problems further aggravated. Li Zhenjie said.
Ningbo Zhoushan Port. Source: Chao News.
Zhejiang's foreign trade manufacturers feel "lying guns".
In the past two days, North African customers have also come to the factory to bargain and let us help. Ding Yandong, general manager of Ningbo Ruimax door and window accessories, told ** that customer bargaining is a last resort, and the cost of bypassing the Cape of Good Hope has risen a lot. At a time when the global market demand is shrinking, in order to maintain business, Ding Yandong has to consider the customer's request and is ready to reduce the price for it15%, which also means a 20% loss in net profit. "It's depressing, there's a feeling of 'lying down'. ”
Jin Lixian, executive chairman of the Yiwu International Chamber of Commerce and Yiwu International Freight Forwarding and Logistics Association, said that the crisis of the Red Sea shipping channel has a greater impact on shipping from Yiwu to Europe. "Now the ** of sending a container has more than tripled compared with last month, originally more than 1,000 US dollars, and now it has soared to more than 3,000 US dollars, and there may not be space. According to her, the detour to the Cape of Good Hope will increase the shipping schedule by about 15 days.
Xia Haofei, founder of Jian Yiyun, said that in addition to new energy vehicles, China's exports to Europe have many electronic products, clothing, toys, etc., with low added value, so there is a high probability that they will still choose a detour.
Yixin Europe "China-Europe Express". Source: Visual China.
"The number of inquiries for China-Europe trains has doubled".
In addition to bypassing the Cape of Good Hope, some shippers of high value-added commodities chose the China-Europe train, or air freight. According to Reuters, some companies choose to ship clothing, electronics, etc. to Dubai by sea, and then fly from there to their destinations.
Ding Yandong revealed that because some European customers were in a hurry to get the goods, a batch of goods were recently diverted to Poland by China-Europe trains. "The freight of the China-Europe train is a little more expensive than that of sea freight, but it also has its advantages, that is, the speed is faster than sea freight. He said that it takes about 26 days to get to Poland by sea, about 10 days more to detour to the Cape of Good Hope, and about 16 days to arrive by China-Europe train.
Since the outbreak of the Red Sea waterway crisis, the number of inquiries asking us about the China-Europe freight train business has almost doubled, and it is expected that the business volume of the China-Europe freight train will definitely increase a lot in the coming months. Tan Guangming, founder of Shanghai Yipu Chain Management, revealed that some train platform companies have proposed price increases. At present, some railway freight rates have increased by 10%-15%.
Tan Guangming introduced that after 10 years of high-quality development, the China-Europe Express has some unique advantages - compared with sea freight, the freight operation process of the China-Europe Express is much simpler, and the customs clearance procedures and packing are easier. "At present, we are actively preparing for the setting of routes to and from Central Europe and the increase of the first time, so as to prepare for the growth of customer demand in advance. ”
According to Xinhua News Agency, in July 2021, the shipping rate of 40-foot large containers from China to Europe exceeded US$10,000, and the similar freight rate of China-Europe trains also rose to US$10,000 at that time.
Xie Yuanpeng, deputy manager of the international intermodal transport department of Sinotrans Chongqing Branch, said that before the epidemic, the freight rate of 40-foot large containers of most China-Europe trains remained at 3,000 to 5,000 US dollars. After the epidemic, shipping "one container is hard to find"** soared, and the space of China-Europe freight trains was tight, ** climbed.
The faster the goods are shipped, the less liquidity will be occupied, and the company knows very well how to calculate this account. During the epidemic in 2021, in the face of congestion and delays in important ports around the world caused by the epidemic, a large number of shippers chose China-Europe trains.
As long as the difference between the price difference between the China-Europe train and the sea freight does not exceed 1,000 US dollars and the 40-foot container, everyone will take the China-Europe train. Yin Guofeng, the person in charge of Yiwu Boya Balloon, said.
On December 14, the world's largest liquefied natural gas-powered container ship "Palais Royal" built by China was in the port of Marseille, France. Source: Visual China.
Regionalization, fragmentation, short-chaining, or intensification of regional chains
With major shipping companies suspending the Red Sea route, capital markets reacted quickly. The main contract of the Shanghai Shipping Exchange Container Shipping Index (European Line) has risen for 5 consecutive trading days this week, with a weekly increase of more than 56%. The index reflects the actual settlement costs of container transportation from China Asia to Northwest Europe.
In terms of **, Ningbo COSCO, China Merchants Shipping and other shipping companies have a bright performance of the single-day limit this week. However, according to the first department of these companies, none of them passed through the ships of the Red Sea route.
As this round of supply disturbances, which are mainly characterized by chain blockage and fracture, enters the "see-saw mode", a series of secondary problems caused by this will also bring new problems to global economic governance.
The current round of supply crisis may lead to the intensification of the regionalization, fragmentation and short-chain phenomenon of the first chain in the Middle East and Europe, thereby further disintegrating the existing achievements of globalization. At the same time, cross-regional economic cooperation will also be affected. For example, the India-Middle East-Europe Economic Corridor (IMEEC), in which Israel is an important participant, has run aground in the Israeli-Palestinian war.
In Li Zhenjie's view, the global ** chain has been very fragile after the impact of the new crown epidemic and the Russia-Ukraine conflict, and with the increasing frequency of "broken chain" events, the logic of industrial security is replacing the logic of efficiency, which may become the leading force affecting the production and operation decisions of some countries and enterprises.
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