Shipping boosted by spike in exports
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A frantic rush of outbound shipments has hit the country's busiest port, Shanghai, on the eve of Chinese New Year following an unexpected spike in export orders.
"The outgoing vessels that mainly head for Europe and America have been over-booked since last December in Shanghai," said Michelle Wang, deputy general manager of the ocean freight department for east and central China at UniLogistics, a privately owned Chinese freight forwarding company.
"We've seen the container freight price increase as high as $200 per Twenty Equivalent Unit (TEU) since the start of this year."
According to Wang, the shipping price for cargo containers, on average, has risen three times on average a week since January.
China Containerized Freight Index (CCFI), the world's only gauge tracking the container freight market, rose 7.7 percent in a month to stand at 1,081.67 points on Feb 5, reflecting the turnaround in international seaborne trade.
Among all international trunk lines, the Eastern America service has seen the highest increase at 11 percent during the same period.
"The recent super-spike of outbound container business has surpassed our expectations," said Li Dong, an analyst at Zheshang Securities.
"It's a very strained shipping capacity in the market, despite the price hikes on several occasions this year."
Figures from Shanghai International Port (Group) Co (SIPG), the exclusive operator of all the public terminals in the port of Shanghai, showed that both the container transport turnover and freight throughput in December 2009 saw year-on-year growth for the first time after an 11-month consecutive decline.
The shipment spike amid the price hikes partly arose from the export boom on the back of the shaky recovery of major Western economies. It was also a result of the intention of shipping firms to lift prices via a curb on capacity and the reduction of the ships' service speed during what is traditionally a slow season, said Yu Jianjun, an analyst at Huatai Securities.
"The city's ocean-going shipping is in a hectic condition now, resulting from the fact that lots of container carriers withdrew capacity in tonnage last year after suffering huge losses, which in turn led to a current short-supply of freight space," said a spokeswoman at Shanghai Quanmei Logistics Co, who declined to be named.
She added that the outbound container price per TEU has doubled in a month since the end of December.
The turnaround seems not to be short-lived though, as the export recovery is still on the way up, Huatai's Yu said, predicting that export volume in the country, which has overtaken Germany as the world's largest exporter, will leap 20 percent year-on-year in January, after a rise of 17.2 percent last December.
Guosen Securities estimated that the country will post 22 percent export growth in 2010, as a result of which, the total container transport turnover in the port of Shanghai will grow 9 percent this year.
