- Ocean freight rates are up as much as threefold on year, and the firmness of pricing could remain and help Korea’s shippers for the rest of 2021.
- The Shanghai Containerized Freight Index (SCFI) averaged 999.3 in January 2020. It is now about 2,870 points.
- Since Oct. 9, the figure has been climbing every week on resumption of manufacturing in China.
- Demand for ship transportation usually surges ahead of the Lunar New Year holiday.
- This is attributed to tendency of exporters transporting products for the long holiday, and the rush pushes up the shipping prices.
As per a recent news article published in the Korean JoongAng Daily, boom in freight rates is equal to smooth sailing for shippers.
Strong freight rates
“Strong freight rates are projected to persist until China’s New Year holiday in February,” analyst Bang Min-jin from Eugene Investment said. “Even after that, it is possible that strong demand and tight capacity could keep prices firm.”
Bang added that this might allow shippers to lock in relatively high rates despite economic uncertainty.
Prices for bulk carriers
Prices for bulk carriers, which ship unpackaged cargo like grain, coal, ore and steel coil, have also started to climb.
The Baltic Dry Index (BDI), a benchmark index of average prices paid for the transport of dry bulk materials, hit 1,849 Tuesday, up 5 percent from the previous day. It is 35 percent higher than the figure on Dec. 24, the last day the index was measured in 2020.
A total of 5.3 billion tons of bulk cargo is projected to be transported this year, up 3.8 percent from the previous year, according to a report from NH Investment & Securities. The increase in supply of ships, however, is estimated at 1.5 percent.
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Source: Korean JoongAng Daily
