Is there an industry monopoly behind the "crazy freight rate" of containers?

This round of freight rates in the international container market has increased greatly, with large increases and large exposures, rising to an unprecedented level in history. "Rampant freight rates" have also sparked controversy in the industry.

The representative of the cargo side believes that the high freight rate in the international container shipping market has constituted huge profits or a monopoly, and the government should intervene as soon as possible to ensure the smooth development of international trade; the representative of the shipping side believes that the high freight rate is caused by the relationship between market supply and demand. Normally, the government has no right to directly intervene in market prices.

A number of international shipping people said that it is necessary to conduct a detailed investigation and scientific analysis on the reasons for the high freight rates in the international shipping market, and at the same time continue to promote the smooth flow of the logistics supply chain. This is the basic strategy to deal with the problem from the relationship between supply and demand.

How will the market develop in the future?

International shipping carries a large amount of my country's foreign trade material transportation. Statistics show that from before the outbreak of the epidemic in 2019 to July 2021, more than 80% of the goods in global trade were completed by sea, and the proportion of my country's foreign trade import and export goods completed by sea has increased from the previous 94.3%. to the current 94.8%.

Jia Dashan believes that if the epidemic is dealt with, the efficiency of relevant links will be restored, and the supply and demand panic will be significantly eased. But he also said that even if the supply and demand relationship fully recovers to the level of 2019, it will be difficult for freight rates to return to the level of 2016-2019 due to the increase in cost of various factors.

For the future trend of freight rates in the international container export market, there are differences in the forecasts of different institutions.

The Shanghai Shipping Exchange predicts that the international container freight rate will remain high until the end of the year, and may continue to hit new highs in some periods. There are many uncertainties in the medium and long-term development; Drewry, a global shipping consulting company, will continue until early February 2022. The boom in newbuilding orders is expected to end in 2023; Maersk, COSCO Shipping and others predict that the market peak may last until the first quarter of 2022; The market freight rate will gradually enter the correction space, but it will not eliminate the influence of many uncertainties. There may be emergencies in the market.