Global Shipping Will Usher In “The Craziest” Summer In History
Under the shadow of the pandemic, global shipping may usher in the busiest summer, which is stronger than last year when “a container is hard to get”.
On the one hand, the pandemic has changed the way people behave, and people have become keen on online shopping. In addition, the economic stimulus policies of the Biden administration and the continuous isolation policy in the winter of the United States have added fuel to this situation.
The surge in freight volume also pushed up prices. The Baltic Daily Freight Index continued to set a record high. This week, freight rates on the East Coast of the United States exceeded $6,000 for the first time.
The busiest summer global shipping
The Inbound Ocean TEU Freight Volume Index (IOTI), which measures the volume of ocean bookings for 20’GP standard containers imported from the United States, may hit a record high this week.
Affected by the pandemic, IOTI will have the honor to record the busiest global shipping time since January 2019.
IOTI will display the booking status a week in advance, which means it can measure the status of the cargo leaving its port of origin in the next 7 days. Data shows that following the growth trend that appeared at the end of January, bookings will soar next week.
However, bookings may not be fully converted into freight volume, because shipping suppliers have the right to choose whether to accept orders, which is similar to the situation of ground freight. Interestingly, the Truck Tender Volume Index (VOTVI) shows that in this case, shippers send spam to their suppliers just to increase the chance of success.
Since container imports have been closely linked to ground freight volume and transportation demand, this also sends out a signal, that is American ground transportation providers will be extremely active this summer.
According to the analysis, the planned import volume is a leading indicator of the ground freight volume in the United States, which can reflect the ground freight volume in the next 2-4 weeks in advance.
After consumer spending on durable goods recovered faster than expected last spring, merchants found that they were insufficient in inventory, so they began to replenish inventory at a record-breaking rate in May last year. This has also caused a surge in truck cargo volume, dragging down the time of land transportation, and narrowing the time gap between sea and land transportation.
Global shipping sea freight increase
The surge in freight volumes has also pushed up prices, and the Freightos Baltic Daily Indices continues to hit a record high, which measures the daily price changes of a 40’GP container on 12 major sea routes.
In order to circumvent the congested ports of Southern California, this week, global shipping freight rates on the east coast of the United States were pushed up to over $6,000 for the first time.
In addition, Houston and Savannah, Georgia have seen a surge in truck traffic in the past month, and capacity has tightened to a record level. The rejection rate of maritime tenders in these areas has also reached a record high in the past two weeks.