Freight - reason why shipping rates are increasing

 

'Caught sick' the reason why shipping rates are increasing day by day

Posted onJune 14, 2024by VPA

June 14

Container shipping costs have increased almost vertically, causing export businesses to worry about delivery schedules as well as shrinking profit margins.

Freight costs increased dramatically

Mr. Vincent Clerc - CEO of shipping giant Maersk (Denmark) - said that container shipping costs increased 'almost vertically' in the past month. Specifically, in the week ending June 6, Drewry's container freight index increased 12% to 4,716 USD per FEU (40ft container), an increase of 181% over the same period and 232% higher than the previous year. average level in 2019.

For example, freight rates on the Shanghai to Genoa route reached $6,664 per FEU, up 213% from a year ago. Additionally, freight rates on the Shanghai to New York route recently reached $6,463 per FEU, up about 142% over the same period, while rates on the Shanghai to Los Angeles route recently reached $5,975 per FEU, up about 215% over the same period last year.

According to Vietnam Maritime Administration, statistics from the beginning of June 2024, the price of shipping container goods by sea to European countries and the United States is trending up sharply, the world container index increased by 12% to 4,716. USD/40 feet container in the past week.

According to data from the international logistics exchange Phaata, freight rates for the City route. Ho Chi Minh trips to the United States are increasing sharply. Meanwhile, Drewry's world container index (WCI) increased 12% to $4,716 per 40-foot container in the week from May 30 to June 6 and increased 181% over the same period last year. From Shanghai to Genoa, rates increased 17% at $6,664 per 40-foot container. Freight rates from Shanghai to New York increased 6% to $7,214 per 40-foot container.

Mr. Truong Dinh Hoe - General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) - informed that the world's vital shipping routes from the Red Sea to the Gulf of Aden are heavily affected by conflict. Geopolitics are escalating in the Middle East. For some time now, the Mandab Strait - one of the busiest maritime routes in the world with the capacity to handle about 15% of global maritime trade value - has been significantly disrupted due to attacks by Houthi rebels. on cargo ships in recent times. The majority of cargo ships still avoid moving into the Red Sea area, with the number of daily movements down by two-thirds compared to the same period last year.

Drought conditions in the Panama Canal – which handles 5% of global maritime trade – have gradually improved as the number of daily transits has increased. However, shipping capacity through the Panama Canal is still lower than the usual daily average of 34 - 40 transits and cargo traffic is expected to return by 2025. Recently, a situation occurred again. Congestion in Singapore leads to concerns about supply chain crises and rising commodity prices.

"Congestion in Singapore stems from many factors, from the tendency to change shipping routes when the Red Sea is unstable to the rush to transport goods before the new tariffs imposed by the United States on Chinese goods take effect." , Mr. Truong Dinh Hoe shared.

Many leading industry experts say that the United States plans to impose strong tariffs on many types of Chinese goods from August 2024, causing Chinese exporters to boost exports ahead of schedule. Therefore, many Chinese exporters are paying higher prices to shipping lines to ensure space on ships bound for the United States and Europe.

Chinese businesses are willing to pay up to 1,000 USD for 1 slot on the ship, while Vietnam only pays 600 USD. Therefore, shipping lines have almost given priority to China, reducing trips with countries including Vietnam, leading to the current situation of huge price increases.

Mr. Do Ngoc Tai - General Director of Tai Kim Anh Seafood Processing Joint Stock Company - informed that shipping rates have increased dramatically by 40% since May due to the war in the Middle East and China collecting empty containers to reserve for export. for the United States before the new tax deadline. Similarly, with the EU market, shipping rates increased dramatically by 60% due to detours and China collecting empty containers for export to the United States.

In the pepper and spice industry, Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association - informed that pepper export businesses are facing difficulties when pepper prices increase. Unable to buy goods, along with that, transportation costs increase. The reason may be because the Chinese side collects empty containers for export.

Narrowing business profit margins

Some export businesses reported that the cost of a container to the US market has increased from nearly 3,000 USD to nearly 7,400 USD; Peak season fees every year are the highest at about 300 USD/container, now the shipping company reported an increase to 1,000 USD/container... Shipping rates fluctuate every day. Shipping companies also quote prices weekly instead of 15 - 30 days as before.

Meanwhile, Vietnamese businesses have almost no choice because in terms of international shipping, Vietnam's shipping fleet is currently only responsible for transporting about 10% of the market share, mainly transporting the following routes: China, Japan, Korea and Southeast Asia. Vietnam's export activities to major markets such as the United States, EU... depend on foreign shipping lines.

Notably, according to Mr. Vincent Clerc, with the above sharp increase in prices, it may motivate more retailers in the West to find ways to transport goods for the Christmas shopping season in large volumes. earlier and earlier than usual. This could put additional pressure on the global supply chain. The sooner retailers replenish inventory, the more they will fall into a dilemma. The more they try to request early shipments to avoid late delivery, the more delays they see.

Mr. Nguyen Hoai Nam - Deputy General Secretary of VASEP - said that shipping costs are increasing again, causing difficulties for the fisheries industry. Because businesses in the industry mainly operate export activities, each year they use more than 1 million containers, but currently, it is very difficult to order containers.

Meanwhile, Mr. Ho Quoc Luc - Chairman of the Board of Directors of Sao Ta Food Joint Stock Company - said that sea freight rates to North America and Western Europe increased by 100% compared to the off-peak period, while other routes Going to Japan, Korea, Australia has more stable prices. Increasing fares will reduce business profits.

Faced with the above situation, the Vietnam Maritime Administration has just requested the Maritime Port Authorities to coordinate with the Maritime Sub-Departments and relevant authorities, associations and units to strengthen supervision of business enterprises. sea ​​transport, providing container freight services by sea, listing prices and surcharges in addition to the price of container freight services by sea (prices and surcharges in addition to prices); Complying with the effectiveness of price postings and surcharges in addition to prices according to the provisions of Decree No. 146 of the Government.

Units are assigned to monitor and report to the Department when there is congestion at seaports, as well as when there is an imbalance in container containers serving import and export goods.

Vietnam Maritime Branch in City. Ho Chi Minh was assigned to preside over and coordinate with the Maritime Branch in Hai Phong and the Maritime Port Authorities in the city. Ho Chi Minh, Vung Tau, Hai Phong monitor statistics on price increases/decreases and surcharges in addition to prices for a number of shipping lines that provide container shipping services to Europe and the United States, including including: Maersk, MSC, CMA-CGM, ONE, Hapag-Lloyd, Evergreen, HMM, COSCO, Yang Ming, OOCL...

At the same time, proactively work with representatives of the above shipping lines in Vietnam and relevant units to grasp the causes of service price increases/decreases when there are signs of sharp increases/decreases and other related issues. to the shipping company.

According to Congthuong.vn

Pepper market June 12, 2024

 

Pepper market June 12, 2024: export and domestic pepper prices dropped sharply

Posted onJune 12, 2024by VPA

12
Jun

Pepper price today June 12 is in the range of 155,000 - 160,000 VND/kg. After a series of consecutive increases, the official domestic pepper price dropped sharply by 20,000-25,000 VND/kg. The International Pepper Community sharply increased Vietnam's pepper export prices while slightly decreasing Indonesian pepper prices.

At the end of the most recent trading session, the International Pepper Community (IPC) listed Lampung (Indonesia) black pepper price at 6,449 USD/ton, down 0.03%; Brazilian black pepper price ASTA 570 is at 8,500 USD/ton; Kuching (Malaysia) ASTA black pepper price remained at 4,900 USD/ton.

Muntok white pepper price was 8,417 USD/ton, down 0.04%; Malaysian ASTA white pepper price is still at 7,300 USD/ton.

Vietnam black pepper price is trading at 7,300 USD/ton for 500 g/l type; type 550 g/l at 7,800 USD/ton, up 16.25%; White pepper price was at 10,700 USD/ton, an increase of 20.83%. The International Pepper Community sharply increased Vietnam's pepper export prices while slightly decreasing Indonesian pepper prices.

Pepper prices in the world and in Vietnam increased sharply because Brazil and Vietnam, the two countries that determine global supply, are having a decline in output due to El Nino weather causing drought. Supply in Indonesia, India, Malaysia, and Sri Lanka is also limited.

According to assessments, in the long term in the next 3-5 years, the amount of pepper produced cannot meet the world's consumer demand.

Factors other than supply and demand pushing pepper to skyrocket include shipping costs. The global container index, representing spot container freight rates on major international shipping routes, has returned to the peak of the Covid-19 epidemic.

Shipping market research firm Linerlytica said that ports in Southeast Asia are becoming the "most serious bottleneck" for world maritime transport activities, when 26% of global container capacity is stuck in this area.

This has been implanted in product prices, causing goods to increase in recent times. Besides, domestic speculation activities are also considered one of the main causes of the current price increase. The market is also driven by increasing purchasing power each month from China.

According to KTĐT.vn

Pepper market on June 11, 2024

 

BREAKING NEWS , Domestic news , NEWS

Pepper market on June 11, 2024: Strong increase reaching over 175,000 VND/kg

Posted onJune 11, 2024by VPA

11
Jun

Pepper price today June 11 is in the range of 175,000 - 176,000 VND/kg. The official pepper price exceeded the mark of 170,000 VND/kg, a price that no one could have thought of when entering this year's harvest. Another reason causing pepper prices to increase is that sea transportation is increasingly expensive.

The rapid increase in pepper prices makes farmers very excited, along with other agricultural products such as coffee and durian also increasing in price, thereby improving people's lives.

However, the planting of new pepper has not yet been widely recorded, because the cost of planting new pepper has become more expensive than before. Besides, there are other agricultural crops that bring better profits than black pepper such as coffee, cocoa, and durian.

Another reason why pepper prices have increased in addition to supply and demand factors in recent times is that sea transportation is increasingly expensive.

Last week, a series of major shipping lines based in Taiwan (China) such as Evergreen, Yang Ming and Wan Hai predicted that congestion at ports in Asia would not ease in the short term, so freight rates Container shipping will remain anchored until the third quarter of 2024.

At the end of the most recent trading session, the International Pepper Community (IPC) listed Lampung (Indonesia) black pepper price at 6,451 USD/ton, an increase of 12.65%; Brazilian black pepper price ASTA 570 was at 8,500 USD/ton, up 3.53%; Kuching (Malaysia) ASTA black pepper price remained at 4,900 USD/ton.

Muntok white pepper price was 8,420 USD/ton, an increase of 11.82%; Malaysian ASTA white pepper price is still at 7,300 USD/ton.

Vietnam black pepper price is trading at 6,500 USD/ton for 500 g/l type; type 550 g/l at 6,700 USD/ton; White pepper price is at 9,500 USD/ton. The International Pepper Community sharply increased Indonesian and Brazilian pepper prices earlier this week.

According to KTĐT.vn

Seaport congestion is widespread in Asia

 

Seaport congestion is widespread in Asia, container freight rates are expected to remain high until the third quarter of 2024

Posted onJune 10, 2024by VPA

10
Jun

Singapore Port - the world's second largest container port - is experiencing more serious congestion than during the peak period of the COVID-19 pandemic. This is causing a knock-on impact on a series of seaports in the region.

 A series of major ports in Asia and Europe are experiencing serious congestion with a large number of ships in port and waiting to dock (as of June 2). (Source: Linerlytica)

Singapore Port - the world's second largest container port - is experiencing sudden congestion. The level of congestion this time is even more serious than when the COVID-19 pandemic broke out when there were up to 450,000 TEUs waiting to enter or leave this port.

The reason is said to be due to the chain impact of the recent maritime crisis in the Red Sea region, forcing container shipping lines to change their schedules. In addition, many shippers are also rushing to transport goods to the US due to concerns about the risk of a strike in September 2024 when salary negotiations for seaport workers on the East Coast of the US take place. didn't go well. These factors have created the phenomenon of "ship congestion" with too many ships arriving at the port at the same time unexpectedly.

Data from the Maritime and Port Authority of Singapore (MPA) shows that in the first 4 months of this year, throughput through Singapore port increased nearly 9% over the same period last year, reaching 13.36 million TEU.

According to data from market research firm S&P Global Commodity Insights, in just the first 20 days of May 2024, Singapore port received 999 cargo ships, a jump of 56% compared to April 2024. MPA said that ships currently need to wait an average of 2-3 days to dock in Singapore. However, some shipping lines said they have to wait up to 7 days for their turn to dock.

As a hub for transshipment of goods, connecting to more than 600 other ports globally, congestion at the Port of Singapore is creating a ripple effect on ports in the region such as Port Klang and Tanjung Pelepas Port in Malaysia, Shanghai port and Qingdao port in China...

The long wait at Singapore port caused some ships to cancel their plans to dock at this port and redirect to neighboring ports, thereby forcing ports in the area to handle sudden, unplanned cargo volumes. .

Shipping market research firm Linerlytica said ports in Southeast Asia are becoming the "most serious bottleneck" for world maritime transport activities, when 26% of global container capacity is being blocked. stuck in this area.

Currently, the global port congestion index has reached 2 million TEU, equivalent to 6.8% of total global carrying capacity, compared to the normal level of only about 2-4%. This situation is exacerbating the shortage of empty containers and pushing container freight rates up again in recent weeks.

The Shanghai Container Shipping Index (SCFI) has increased 42% in the past month. The SCFI index measures spot shipping rates for containers from the Shanghai port area (China) to a series of major global ports such as Barcelona, ​​Hamburg, and Rotterdam in Europe; Los Angeles, Oakland, New York in the US; Osaka, Tokyo in Japan…

The SCFI index (as of May 31) has skyrocketed compared to the beginning of this year. (Source: SCFI)

The world's second largest shipping company Maersk has just informed customers about "significant" delays in ship schedules due to congestion at ports in the Mediterranean and Asia. As a result, Maersk ships will temporarily stop calling at some ports in the coming weeks.

Currently, some organizations predict that shipping lines will increase freight rates and add new surcharges to compensate for losses caused by port congestion. This has been applied by shipping lines throughout the COVID-19 pandemic.

Last week, a series of major shipping lines based in Taiwan (China) such as Evergreen, Yang Ming and Wan Hai predicted that congestion at ports in Asia would not ease in the short term, so freight rates Container shipping will remain anchored until the third quarter of 2024.

As Industry and Trade Magazine has reported, the global container index, representing spot container freight rates on major international shipping routes, has returned to the peak of the COVID-19 epidemic, with fixed ship rental prices. Limits of some segments reached an increase of up to 65% compared to the beginning of this year. The environment of high freight rates and increased transport output is expected to boost the business results of shipping enterprises.

According to Tapchicongthuong

Vietnam market update 10th June 2024 – Week 23 & May

 

PEPPER;

 

          •The price of black pepper last week continued to skyrocket from 148,000 VND to 174,000 VND, an increase of 18%. Particularly, there were days when prices surged by $700 - $800 in just one day.

 

          •Strong demand from various traditional markets such as China, the Middle East, and the US/EU in the past week has reinforced the belief that black pepper prices will continue to rise in the near future.

 

Let’s pay attention to the main points in the recent period with the following factors:

1/ Farmers:

• The rapid increase in pepper prices has made farmers very excited, alongside other agricultural products such as coffee and durian, which have also seen price increases, improving the livelihoods of the people.

• However, new pepper planting is still not widely recognized as the cost of new pepper planting has become more expensive compared to before, alongside other agricultural crops that offer better profits than black pepper, such as coffee, cocoa, and durian.

 

 

Pepper Prices increased rapidly

 

Prices increased rapidly, pepper exports were expected to reach billions of dollars

Posted onJune 6, 2024by VPA

06 Jun

Pepper prices are continuously increasing and will continue to increase in the long term

According to information from the Ministry of Industry and Trade, from the end of April until now, pepper prices have continuously increased sharply and adjusted prices daily. For example, around mid-May 2024, the pepper price was 120,000 VND/kg. By the end of May, the pepper price increased to 127,000 - 129,000 VND/kg. Updated on June 5, pepper price nearly reached 150,000 VND/kg.

Vietnam's pepper industry accounts for 40% of output and 60% of the world market share. According to VPSA, the global pepper market size is worth about 5.4 billion USD and is forecast to achieve an average growth rate of about 20% between 2024 and 2032.

Sharing with the press, Mr. Hoang Phuoc Binh - Vice Chairman of Chu Se Pepper Association (Gia Lai) said that this year's pepper output from Vietnam and many major producing countries is forecast to decline, due to impact of the El Nino phenomenon. Besides, the area under cultivation of this agricultural product has decreased significantly. This is the basic reason why pepper prices increased sharply.

In 2024, export pepper prices will increase due to reduced output and low inventory

For more information about this story, Ms. Hoang Thi Lien - President of the Vietnam Pepper and Spice Association (VPSA) said that pepper prices have continuously plummeted for many years, causing many pepper growing households to halve. area, many perennial gardens were cut down and planted with durian and some other trees with higher economic value, causing supply to decrease.

Furthermore, in Vietnam, the amount of inventory transferred from last year to this year is insignificant. Meanwhile, pepper demand is recovering strongly from major markets such as Europe, the US and China. Supply is in short supply, while demand is high. Those factors are the reasons why pepper prices increased sharply.

Notably, Mr. Binh informed that the pepper area is still decreasing due to aging and people changing crops. While there is no new planting at this time, it will still not be possible to increase output in the next 4 years. Therefore, pepper will maintain a scarcity of supply.

"With the current situation, global pepper production cannot meet consumer demand, so pepper prices will still tend to increase in the next 3-5 years," Ms. Hoang Thi Lien added.

According to industry experts, pepper prices may reach a new peak of 350,000 - 400,000 VND/kg. It doesn't stop there, it is very possible that pepper is entering a new price increase cycle, normally this cycle will last for 10 years and the price of 350,000 - 400,000 VND/kg is forecast for the next 10 years. During this period, pepper prices will still have fluctuations in adjustments.

Pepper exports are expected to reach billions of USD

In the first 5 months of 2024, the United States continues to be Vietnam's largest pepper export market reaching 30,466 tons, accounting for 26.6% and increasing by 44.4% over the same period. Germany rose to become Vietnam's second largest export market reaching 7,532 tons, accounting for 6.6% and increasing 103.2%.

Some markets have impressive increases in export volume such as: Italy increased by 179.0%; Russia increased by 49.7%; Spain increased by 49.1%; Egypt increased by 39.0%…

According to VPSA's preliminary statistics, in May 2024, Vietnam exported 31,357 tons of pepper of all kinds with an export turnover of 141 million USD, the average export price of black pepper in May reached 4,542 USD /ton, white pepper reached 6,106 USD/ton, an increase of 229 USD for black pepper and 63 USD for white pepper compared to the previous month.

Accumulated in the first 5 months of the year, Vietnam has exported 114,424 tons of pepper of all kinds with a total export turnover of 493.1 million USD. Compared to the same period in 2023, export volume decreased by 13.2%, but export turnover increased by 20.6%. The average export price of black pepper in 5 months reached 4,197 USD/ton, white pepper reached 5,804 USD/ton, an increase of 754 USD for black pepper and 849 USD for white pepper respectively compared to the same period in 5 months of 2023.

Talking to reporters, a representative of the Import-Export Department (Ministry of Industry and Trade) predicted that the increase in domestic pepper prices will push up export pepper prices and we can expect the pepper industry to earn billions of dollars in export revenue. in this year.

At the same time, he added that in the world market, it is forecast that pepper prices will continue to increase in the near future, but the growth rate will slow down. In the domestic market, black pepper prices have increased sharply due to limited supply, but people should not massively expand planting areas but focus on investing and taking care of intensive farming so that pepper plants can develop sustainably. and stable.

As for businesses, VPSA recommends that export businesses be careful in purchasing and exporting activities to avoid risks similar to the recent coffee or rice prices.

Export businesses still have concerns

In fact, pepper prices increased sharply in the context of a falling USD and a tense shipping market, causing significant difficulties for export businesses in the past and in the future. In addition, many experts are also concerned about the possibility that due to speculative activities, traders and investors have gathered goods and created an artificial scarcity, pushing up pepper prices.

Many businesses share that pepper prices are double the same period last year, and have reached the highest level in the past 8 years, causing difficulties for export businesses, businesses cannot buy goods while prices continue to rise. is pushed up. Many farmers are stockpiling and waiting for prices to increase further. This is putting pressure on some businesses to collect enough goods for their partners.

Regarding this issue, Mr. Binh commented that pepper prices have increased rapidly recently due to the impact of speculative factors. Currently, world prices are increasing, domestic prices are lower than world prices, so many small dealers are holding goods, pushing up prices.

The Vietnam Pepper and Spice Association (VPSA) currently estimates that Vietnam's pepper output in 2024 will only reach about 170,000 tons, down 10% compared to the previous year. This is also the lowest level in the past 5 years. The reason is that many farmers cut down pepper trees when prices fell 4 years ago (pepper price dropped to only 40,000 VND/kg) to plant more economically beneficial trees such as durian, coffee...

Global pepper production in 2024 is expected to reach about 465,000 tons, down 1.2% compared to last year. Meanwhile, global pepper consumption demand is expected to reach 529,000 tons, exceeding production by 64,000 tons. This caused inventories to continue to decline to 428,000 tons, the lowest level in the past 6 years.

According to VTV.vn

Vietnam Pepper Market, June 07, 2024

 

Pepper export businesses are "gutted"

Posted onJune 7, 2024by VPA

07
Jun

Amid the shocking increase in pepper prices, some businesses reported that export goods were "withdrawn" causing international customers to not receive the full amount of delivered goods.

On June 7, the domestic pepper price jumped to 164,000 VND/kg, an increase of 16,000 VND/kg compared to the previous day and an increase of more than 60% compared to mid-May. In early 2024, pepper prices were still low. at 70,000 VND/kg.

The hot increase in pepper prices helps gardeners and agents who are storing pepper profit, but commercial units that forget the practice of "buying far - selling far" will suffer losses because they have to buy goods at high prices to deliver to price contracts. short.

Processing enterprises are also tired of increasing raw material prices while final product prices can only increase slightly.

Meanwhile, the Vietnam Pepper and Spice Association reported that some businesses reported losing part of their export volume.

Pepper prices are increasing dramatically

Specifically, the importer discovered that the goods were in short supply compared to the contract, while the volume of the container, including the goods inside weighed at the port according to the weighing slip at the port, showed that the goods were of sufficient volume.

According to an internal investigation, the export enterprise suspected the possibility of goods being lost while the container was being unloaded and awaiting export. This shortage of goods reduces the trust of international partners and customers in Vietnam's logistics and shipping system as well as the reputation of export businesses. In addition, businesses have to spend more money to increase security, insure goods, and handle lost goods.

The Vietnam Pepper and Spice Association has sent a warning to its members and requested businesses experiencing similar situations to provide information for the Association to compile and report to relevant ministries and agencies for consideration. handle.

According to Labor Newspaper