Trade: The 2652 dollar container is becoming a problem for Europe

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Many medium-sized importers rub their eyes when they want to have a container shipped from China to Germany these days - just like a consumer electronics retailer from Paderborn has just done.

Instead of the 1500 dollars (1238 euros) as two weeks ago, this entrepreneur should suddenly pay his provider 5000 dollars for container transport.

In fact, there are hardly any alternatives for medium-sized companies.

Because all the major container shipping companies are currently increasing their so-called freight rates.

The reason for this is that the demand for ship transport from Asia currently exceeds the shipping companies' supply of cargo space.

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In the past few days, this in turn has led to the fact that, according to data from freight broker Freightos, a 40-foot container from the Far East to Europe cost an average of $ 2,652 at the end of the first week of December.

Compared to the previous year, this corresponds to a doubling.

Freight prices for sea transport have been rising steadily since the end of May 2020.

Delivery bottlenecks expected

The current Christmas business will no longer be affected by these price increases or even bottlenecks.

After all, these goods are already in the warehouses in Germany.

However, orders for spring could be influenced by developments - either through delays or a surcharge for the higher transport costs.

However, the transport costs, calculated on the basis of the individual consumer good, are often only a few euro cents.

Only in the case of bulky, large and particularly heavy goods is this proportion in the euro area.

Source: WORLD infographic

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The topic has already reached the large retail companies.

"We expect delivery bottlenecks in the coming weeks," says a spokesman for the Otto Group.

Multimedia electronics, fashion or household appliances could arrive in Germany with a delay.

The group does not expect a change in the situation and sufficient transport capacities on the cargo ships until the end of February or March 2021.

The Otto Group buys goods worth billions of euros a year in Asia.

But such large companies among the dealers usually conclude long-term contracts with the transport groups and terms of up to twelve months.

In this way they keep the prices for container transport predictable.

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Experienced sea freight forwarders, on the other hand, speak of a price explosion and long-term bottlenecks.

"If you want to book a container from Shanghai to Hamburg today, you may have to wait until February to actually get one," said Walter Stork, founder of the Hamburg-based Navis Spedition.

According to this information, all container shipping companies are currently behaving similarly in terms of their pricing.

With Maersk from Denmark, MSC from Switzerland, CMA CGM from France and Hapag-Lloyd, four of the five largest companies come from Europe.

The Chinese shipping company Cosco ranks third.

Customers have to be prepared for late deliveries

Germany's largest shipping company, Hapag-Lloyd, also confirms this assessment.

Because of the tight cargo space, customers in Europe have to be prepared for late deliveries of goods such as entertainment electronics, fitness equipment or furniture, according to the Hamburg shipping company.

Transport bottlenecks also affect transport from Asia to the USA and South America.

Hapag-Lloyd has now raised its profit target for 2020 for the second time to up to EUR 2.7 billion before interest, taxes, depreciation and amortization.

This corresponds to an improvement of a third over the previous year.

Competitors Maersk and CMA CGM also announce high increases in profits.

At the same time, Hapag-Lloyd assures that every available ship from the 240-unit fleet will be used.

After the global economy slump in the spring caused by the corona pandemic, all the major shipping companies initially reduced their capacities and, for example, returned rented cargo ships.

That has now turned.

"There is currently everything on ships that can swim," said a shipping expert who wants to remain anonymous.

The reasons for the high capacity utilization of the container ships are numerous.

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For example, retail companies have been reducing their inventories since spring in fear of a major economic downturn as a result of the corona pandemic.

There is a lack of cargo planes

But now they are seeing increasing demand for products for home use, for do-it-yourselfers or electronics, and they have to reorder.

Even bicycles from the Far East now have long delivery times.

In addition, capacities in air freight transport are still lower than before the Corona crisis.

Around half of the air freight is flown in passenger planes and there in the cargo hold.

However, the number of passenger flights has halved in some regions.

There is simply a lack of aircraft for this cargo.

Fluctuations in freight prices for sea containers are by no means rare in shipping.

However, the differences are very large depending on the area and region.

Of nine global ship connections operated by Hapag-Lloyd, only two routes are currently experiencing a high price increase.

Viewed over the year as a whole, according to WELT information, the group is therefore only expecting all freight rates to rise by around three percent.