As Shanghai, home to the world’s largest port continues to be under strict lockdowns amid COVID-19 cases, the future of the global supply chain is once again uncertain. In an interview with Fox Business, Mario Cordero, Director of the Port of Long Beach has expressed concern that the lockdowns could soon start affecting the Californian ports. Cordero stated that if China continues with a zero-COVID policy, supply chain disruptions could stretch into the coming years. “If the zero-COVID policy continues in a rigid way that we’ve seen here in China, it could have those ramifications,” he noted.
However, lockdowns are not the only thing affecting the US West Coast ports. An article from CNBC reported that Chinese carriers are shipping more empty containers than full ones out of Californian ports. The top two carriers that have been carrying the largest number of empty containers out of California are OOCL and COSCO. This has significantly affected American farmers and other exporters who depend con exporting a share of the production. One reason for the disparity is the difference in the price of containers leaving China heading to the US, around $15,000, and those leaving the West Coast towards China, a little over $1,000. Carriers are opting to send containers on the more lucrative routes from China to the US and returning as quickly as possible, often time empty to the Chinese ports to load up again. The United States government is currently in the process of expanding audits of shipping practices and reviewing legislation to provide relief to the American exporter.
Turning to spot freight rates across the major routes, Drewry’s World Container Index showed that in general prices dropped around 1.2% last week, although they remain 62% higher than one year ago. Rates from China to the US and vice versa remained essentially unchanged compared to the last week, while Shanghai to Genoa dropped 1% and Shanghai to Rotterdam fell 2%. The largest decrease in spot freight rate was Rotterdam to Shanghai which was 4% lower than the previous week.
However, lockdowns are not the only thing affecting the US West Coast ports. An article from CNBC reported that Chinese carriers are shipping more empty containers than full ones out of Californian ports. The top two carriers that have been carrying the largest number of empty containers out of California are OOCL and COSCO. This has significantly affected American farmers and other exporters who depend con exporting a share of the production. One reason for the disparity is the difference in the price of containers leaving China heading to the US, around $15,000, and those leaving the West Coast towards China, a little over $1,000. Carriers are opting to send containers on the more lucrative routes from China to the US and returning as quickly as possible, often time empty to the Chinese ports to load up again. The United States government is currently in the process of expanding audits of shipping practices and reviewing legislation to provide relief to the American exporter.
Turning to spot freight rates across the major routes, Drewry’s World Container Index showed that in general prices dropped around 1.2% last week, although they remain 62% higher than one year ago. Rates from China to the US and vice versa remained essentially unchanged compared to the last week, while Shanghai to Genoa dropped 1% and Shanghai to Rotterdam fell 2%. The largest decrease in spot freight rate was Rotterdam to Shanghai which was 4% lower than the previous week.
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