LONDON (AFP) – Maritime container freight shipping is steaming ahead through the COVID-19 pandemic, boosted by strong demand for Chinese exports and a shortage of vessels according to industry experts.
The Freightos Baltic Global Container Index (FBX), which tracks the cost of container shipping, has almost quadrupled for the China-Europe route since early November to stand at USD7,827 on Friday.
The FBX reading for containers from China bound for the west coast of the United States (US) has nearly tripled since late May to USD4,286 on Friday.
“The costs of shipping goods from China to Europe by water have hit unprecedented highs recently,” said UniCredit Bank economist Andreas Rees.
That is due to rampant demand for China’s manufactured products, particularly for medical equipment during the global health emergency – but also for consumer goods from lockdown-bound populations.
“First, demand of medical goods produced in China have been strongly rising. Second, and probably more important, consumers have been re-allocating their demand,” said Rees.
“Instead of going to restaurants and travelling, they have been demanding more durable goods such as electronic equipment, furniture, to have a nice home. And many of these goods are produced in China.”
That has had a knock-on effect on demand for the gigantic container ships that transport vast amounts of goods from the Asian powerhouse.
“Container shipping costs are soaring from Asia, not just to the United Kingdom (UK) but to most destinations for shipments out of China and Asia,” Braemar analyst Jonathan Roach told AFP.
“With increased durable demand, container demand has increased exponentially.”
Nevertheless, the pandemic did also spark a overall 4.1-per-cent decline in world maritime trade last year, according to recent estimates from the United Nations (UN) Conference on Trade and Development.