German media: China's export boom has pushed up container prices

There are containers as far as the eye can see, and miles of docks for freighters to dock at. Shanghai Port is currently the world's largest container throughput port. In 2023, nearly 50 million TEUs were processed here. Container and cargo operations at Chinese ports continue to show an upward trend. All the interim data show that this year is even stronger than last year. China's export boom is changing the shipping industry in the world's oceans by driving up the rental price of containers. "Global consumer demand has grown surprisingly fast." "Said a manager at Kuehne + Nagel, a freight forwarding company. To make matters worse, as during the pandemic, there is a shortage of containers.

 

The southern Chinese metropolises of Shenzhen and Guangzhou and the northern city of Qingdao also have high port utilisation rates. "The peak transportation season is still ahead, but the volume of goods is already huge," said Mr. Wei of Shenzhen Zhongji Logistics Group. The logistics company ships products such as aluminum sheets and fans to Europe.

 

The export boom and growing geopolitical risks are pushing up rental prices for container operations in China. Mr. Wei said that the shipping cost per TEU is now about $6,000 to $7,000, while the price in April is $3,000 to $4,000. According to a survey of about 800 freight forwarders, logistics and container traders in China by Germany's Esjet, customers reported an 88% increase in average container prices during April and May.

 

There are many reasons for the rapid price rise: China's foreign trade is picking up again after the average price of its exports fell by nearly 10% between 2022 and 2023. Mexico and Brazil are the current drivers of China's foreign trade: in April, the shipping capacity between China and South America reached 3.9 million TEUs, a third more than in 2019.

 

Meanwhile, Chinese electric car makers are making inroads into the European market. According to analysis by the Atlantic Council, China's electric vehicle exports in 2023 increased by 70% year-on-year, 40% of which were sold to Europe.

 

Cars can be shipped on ro-ro ships or container ships. However, the current ro-ro fleet is too small to meet China's export ambitions. According to Chinese media reports, the number of orders for ro-ro ships has risen sharply in the past two years, with dozens of them coming from China. The shortage of ro-ro ships has caused many cars to be transported by container ships, and containers are not only becoming more expensive, but also less and less.

 

In addition, Houthi attacks in the Red Sea are driving up shipping prices, so shipping companies, including COSCO, must re-route. The alternative route is around the Cape of Good Hope in South Africa. "This has extended the route from China to Europe from as little as 20 days to nearly 30 days," said Wei, who is based in Shenzhen.

 

All experts are clear: given all these challenges, the direction of prices in the container and logistics market is more uncertain than ever.

(From German "Handelsblatt")