Regional container liner shipping is still being further squeezed. In many countries where routes are not dense, the impact of higher freight rates on local end consumer prices is five times that of the global average!

1. According to Alphaliner's data, although the global container capacity increased by 3.8% year-on-year as of August 1st, in the past 12 months, the capacity of three trade routes has dropped significantly. Europe's internal trade routes have been hit the hardest, and the theoretical total transport capacity deployed in Europe's internal trade routes has dropped by 14.2% compared with last year! Intra-Asian trade routes dropped by 10.3%!

2. Alphaliner wrote, "Obviously, shipping companies are continuing to transfer relatively small ships from regional trade to east-west or north-south trade routes to take advantage of relatively high freight rates. “

3. In addition, because of the congestion in the inland areas of Europe and Russia's decision to cut the supply of natural gas, the internal container transportation in Europe needs to compete with the demand for coal, resulting in the barge surcharge in Europe soaring by 150%!

4. The good news is that at the time of the historic strike in Britain's largest port, employers in German Ports and the trade union representing dockers finally reached an agreement on wage increase, ending a long-standing dispute that seriously disrupted the operation of some of the busiest container ports in Germany. The Central Association of German Seaport Companies (ZDS) and the United Service Union (ver.di) reached the collective bargaining result in the 10th round of negotiations this week. About 12,000 employees in the northern port of Germany will get a big salary increase!

Previously on June 9, 2022

5. Jan Hoffmann, Director of Trade Logistics Division of UNCTAD, said that the transfer of transport capacity to large trade routes is hurting smaller developing countries. The capacity, price and service quality of regional trade routes depend to a great extent on the situation of other large trade routes and regions. This leads to the redistribution of transport capacity, and small island countries and least developed countries are facing higher freight rates and lower connectivity!

6. UNCTAD's calculation shows that in small island countries, the impact of higher freight rates on consumer prices is five times higher than the world average. UNCTAD simulation shows that the increase of container freight rate leads to the increase of global consumer price by 1.6%, while that of small island developing countries by 8.2%.

7. Olaf Merk, a shipping expert under the OECD, urged that the lack of connectivity in many countries is a problem that regulators need to investigate. "Liner shipping is now clearly a global business, and global shipping companies are repositioning their capacity to the industries with the highest demand or the greatest profit potential. Regulators need to follow up this situation: most regulators don't realize that the capacity, price and service quality of regional trade mentioned above depend to a large extent on the situation of other large trade routes and regions.

8. The European Commission began to review the competition exemption rules of container liner companies under the urging of the freight rate of container shipping industry soaring, the large-scale delay of cargo transportation and many other international organizations in the supply chain. A spokesman for the European Commission said that all industry participants can submit documents "related to the assessment".