In the logistics chain, all eyes are on China

China has recently introduced strict measures to keep the coronavirus at bay. This should include an extended quarantine and preventive testing of dock workers. Last week this resulted in congestion at the ports of Shenzhen, Ningbo, Xiamen, Dalian and Tianjin. Many ships chose to head to the largest container port in the world, Shanghai, which also caused delays there. This week, all eyes in the logistics chain were focused on the Asian superpower.

Good news follows, because so far - as traders report to Freightos - no major negative effects have been reported. Delays of three to seven days still apply in various Chinese ports, but this is now seen as 'normal'. New measures and the upcoming Chinese New Year have not changed this. According to analysts, the fact that no new disruptions have occurred is mainly because not many corona infections have been detected among dock workers.

Prices will rise slightly
However, the absence of major new disruptions does not mean prices are moving sideways. Drewry's World Container Index is up 1,6% this week to $9.698 per forty foot container. This is 82% higher than one year ago and already the seventh consecutive increase. Freightos reports a rate of $15.171 per container (+4%) for transport from Asia to the west coast of the United States. Transport to the East Coast of the United States costs $16.837 (-4%). Transport costs from Shanghai to Los Angeles rose the most: +5% to $11.197 per forty-foot container.

Drewry expects prices to rise further in the coming weeks. Although Freightos does give a positive rating there side note bee. "It is unlikely that the Chinese New Year will put significant additional pressure on container rates. Shipments that have not yet been booked are unlikely to be moved on time. In addition, delays at US ports have dampened the urgency among exporters." There is also still plenty of time to transport freight by air. The price does rise. The Freightos Air Index for the route 'China - Northern Europe' stands at $9,59 per kilo this week. At the beginning of the month that was less than $6 per kilo.

No anti-competitive effect
The high prices for container transport by sea were reason for the European Union to conduct additional research into shipping companies. This now shows that the corona pandemic has not led to anti-competitive behavior among container carriers. “Current legislation is sufficient to prevent unfair practices or distortions of competition,” it said. However, information continues to be exchanged with industry and other parties to determine whether specific measures are needed to improve the control system.