Recently, the shipping market is booming, shipments have increased sharply, and freight rates have continued to rise. Wind data shows that at the close of trading on November 6, the shipping index rose 3.78% to 1,630.47 points, and the stock prices of COSCO Haite and COSCO Haifa rose at the limit.

According to industry insiders, the shipping market has undergone nearly a decade of consolidation, and shipping capacity has shrunk. Nowadays, the recovery of foreign trade has driven export growth, which has caused an imbalance between supply and demand in the near future, which has pushed up shipping prices.

Increase in export rates

Beginning in April this year, my country’s exports have achieved positive growth for six consecutive months, which has brought a large amount of demand for cargo shipping. Monitoring data from the China Ports Association shows that in October this year, the container throughput of the eight major hub ports increased by 11.1% year-on-year, and the growth rate hit a new high this year. Among them, foreign trade increased by 11.9%, an increase of 3.3 percentage points from the previous month.

The person in charge of the Pearl River Shipping Company told the China Securities Journal that the freight business volume has increased, but the cost is also rising. The person in charge said: "The biggest problem in the near future is the shortage of ships, the difficulty in ordering warehouses, and the shortage of containers. There are many exports and few imports. Many containers are shipped to the United States without returning. No one wants to return an empty box. Except for the price of container transportation. Rising, the price of ships is also rising, including costs, the profit is very small. Some unprofitable orders are simply not accepted."

While ocean shipping prices continue to rise, there are frequent occurrences of cabin explosions and cargo dumping. The person in charge of the Shenzhen foreign freight forwarding company said: “Some of them are not able to order ships, and some of the products entrusted to our customers have very little profit. The high transportation prices cannot afford, and they can only be stacked at the port and other opportunities to join ships and order orders. Beginning in September, there have been frequent cabin explosions and dumped cargoes. Customers who have a small cargo volume and cannot afford to pay can only suffer losses."

According to data from the Shanghai Shipping Exchange, as of November 6, the comprehensive index of China's export container freight rate was 1110.7, an increase of 3.4% over the previous period. Among them, the US West route was 1113.36, an increase of 4.1% over the previous period; the US East route was 1,248.92, an increase of 1.1% over the previous period. The Shanghai Export Container Freight Index was 1664.56, an increase of 134.57% over the previous period.

Su Baoliang, chief analyst of China Merchants Securities Transportation, told a reporter from China Securities News that the shipping market has undergone nearly a decade of consolidation and its capacity has shrunk. The annual growth rate of shipping capacity is about 2% to 3%. In the second half of this year, the growth rate of freight demand in the east and west of the U.S. reached 8%, and the overall freight demand growth next year will be 3% to 4%. The industry has a situation where supply is less than demand, which has boosted the increase in shipping prices.

Shipping companies benefit

Shipping prices have risen, and relevant companies have performed well in the three quarterly reports.

In the first three quarters of this year, COSCO Shipping achieved operating income of 12.708 billion yuan, a year-on-year increase of 24.8%; net profit attributable to shareholders and other equity holders of listed companies was 1.672 billion yuan, a year-on-year increase of 29.5%.

In the first three quarters of this year, COSCO Marine Energy achieved operating income of 13.286 billion yuan, a year-on-year increase of 26.16%; net profit attributable to shareholders of listed companies was 3.324 billion yuan, a year-on-year increase of 470.39%. In the first three quarters of this year, COSCO SHIPPING Holdings achieved operating income of 117.709 billion yuan, a year-on-year increase of 5.46%; net profit attributable to shareholders of listed companies was 3.86 billion yuan, a year-on-year increase of 82.4%.

China Merchants Securities believes that as China's economy continues to recover, it is expected that the business climate of the centralized transportation industry will continue to rise. COSCO SHIPPING Holdings signed a new order for large ships, and at the same time signed a new agreement with COSCO SHIPPING, which is conducive to enhancing the competitiveness of the fleet and providing capacity guarantee for medium and long-term development.