South Korean exporters are having difficulties finding ships, and Chinese exporters are exacerbating the difficulties by monopolizing ships with higher freight charges.
The spot rate for China to Northern Europe already reached US$20,000 per FEU and that for Shanghai to LA is about to reach US$32,000.
Chinese exporters are paying more and more freight charges to carry their containers. Under the circumstances, an increasing number of shipping companies are heading to their destinations without visiting Busan or to Europe and the Americas without loading in Busan.
Things are not changing at all in spite of South Korean exporters’ efforts. According to the Ministry of Transport of China, China’s bottoms to North America added up to 5.5 million TEU from January to May, up 65 percent from a year earlier. The Shanghai Containerized Freight Index reached 3,932.35 last week, continuing to rise for the ninth consecutive week.
Although the South Korean government is trying to increase the transport capacity, the final solution is to get more bottoms by paying more. The problem is that the premiums have to be paid by non-large shippers, which cannot but rely on spot contracts unlike large companies, and long-term measures are yet to be prepared with the current situation likely to continue for a while.