The Upply data base shows that ocean freight rates for the port-to-port carriage of a 40' HC dry container between Antwerp and Ningbo rose 18% between February 16 and March 9. Several factors led to the creation of this balance of power favorable to the shipping companies.
For several weeks, several factors have come together to give shipping companies the opportunity to prioritize the loading of goods offering the highest return on Europe-Asia routes:
- The short supply of available empty containers;
- The small number of ships available for loading in Europe as a result the blank sailings decided for the Chinese New Year;
- The application of low sulphur surcharges following implementation of the IMO 2020 regulation.
The Antwerp-Ningbo route offers a clear illustration.
This contraction of supply should in the normal course continue during the months ahead. This should be the case particularly for departures from the Mediterranean, where hinterlands are particularly short of empty containers. For the north European ports, fresh supplies of empty containers from the east coast of the United States should ease the situation without totally making good the equipment deficit.
Exceptionally low fuel prices
As regards low sulphur surcharges, it is important to know that, because of the global economic crisis caused by the Covid-19 epidemic, the price of low sulphur fuel (LSF) has fallen to below $300 per tonne on the key Rotterdam and Singapore markets. In other words, this "clean" fuel today costs the same, and even a little bit less, than the "dirty" fuel used currently until a few months ago. The most experienced shippers are already drawing the consequences when they come to negotiate contract prices.
The very low LSF prices are also going to lead to an increase in the number of revocations of scrubber retrofit contracts. This should lead automatically to capacity being reintroduced more quickly than expected.