According to the Drewry World Container Index, the spot freight rates have slightly decreased 2.9% compared to the previous week. Although, this remains 79% higher than one year ago. Of the major routes tracked by Drewry, Shanghai to Los Angeles saw the largest decrease at 5%. Shanghai to New York also dropped 5%, while Shanghai to Rotterdam fell 3%. The rest of the major routes remained unchanged.
Port of Los Angeles Executive Director Gene Seroka recently addressed the Pacific Merchant Shipping Association’s providing a “State of the Port”. During the event, Seroka recapped 2021 and set the priorities for 2022. He announced that the Port of Los Angeles processed around 10.7 million Twenty-Foot Equivalent Units, breaking the previous record by 13%. Looking forward to 2022, Seroka outlined various Port initiatives and priorities such as supply chain efficiency, workforce development and job creation, cybersecurity, and the environment.
Turning to the shipping lines, Seatrade Maritime News reported that Drewry has announced in their latest Container Forecaster Report that container shipping profitability continues to skyrocket with a Q3 EBIT of $70.9 billion, more than nine times higher compared to the previous year. The Q3 number brings the total sector EBIT to $139.5 billion through the first nine months of 2021. This has prompted Drewry to increase their forecast for the year from $150 billion to $190 billion. For 2022, Drewry is forecasting an even higher EBIT for container shipping, reaching $200 billion. Simon Heaney, Senior Manager for Container Research at Drewry, stated, “we think that 3Q2021 probably represents the peak quarterly earnings for carriers, but that quarterly results in 2022 will stay on a more even keep that will average out slightly higher.”
At the Port of Shanghai, current congestion is reportedly costing $4.5 billion a week in lost trade, according to risk management firm Russell Group. China’s zero-COVID policy and the upcoming Chinese New Year celebrations are two factors currently contributing to congestion at Chinese ports.