What should I do if I can't get a box, book a cabin or rent a boat? Coca-Cola Company encountered extreme circumstancesThe company came up with the trick of chartering three bulk carriers to transport raw materials equivalent to 2800TEU (20-foot containers).
This shows that low-value bagged goods are returning to the bulk carrier market as long-term contract rates continue to rise in the container market.
Coca-Cola Company's "helpless move"
Allen Smith (Alan Smith), purchasing director of Coca-Cola Company, said on the social platform that Coca-Cola Company had to hire three small bulk carriers to transport raw materials to ensure the normal operation of its production line around the world because it was unable to obtain containers and space.
"when containers or space are not available because of the current shipping crisis, we have to jump out of the mindset (or containers)." Alan Smith explained.
As a matter of fact, the global container shipping crisis has not been alleviated. In the face of tight capacity, long congestion and high freight rates, IKEA, Costco and Walmart Inc、 The Home Depot IncAnd other large shippers to buy boxes to charter ships, charter space and other ways to solve the bottleneck of the supply chain.
Costco, the largest member supermarket chain in the United States, said recently that it has leased three small container ships and thousands of containers and will make 10 voyages in the coming year. The company said it chose to ship goods by charter as one of several emergency measures to ease congestion in the supply chain and planned to reduce transportation costs by ordering in advance and increasing inventory. Prior to this, IKEA announced that it had purchased containers and leased container ships to ensure that the goods could be transported on time; Taiwan Semiconductor Manufacturing Co LtdIt also plans to ship 5000 container parts to the west coast of the United States for the construction of new plants.
However, Coca-Cola Company's "trick" of chartering three bulk carriers rather than container ships attracted attention from all sides. Under normal circumstances, bulk carriers mainly transport dry bulk goods such as wheat, iron ore, coal and so on.
Photos show that the three bulk carriers chartered by Coca-Cola Company are "Weco Lucilia C" of 35009 deadweight tons, "Aphrodite M" of 34399 deadweight tons and "Zhejiang 505" of 35130 deadweight tons, of which "Zhejiang 505" belongs to Zhejiang Shipping Group. The bulk carriers can carry more than 60, 000 tons of raw materials equivalent to 2800TEU cargo, and plan to choose an "uncrowded port" as the destination to ensure smooth unloading and avoid high demurrage costs.
"hopefully in the next few months, this will be the best example of cooperation between our purchasing team, supply chain partners and suppliers." That's what Alan Smith said.
High freight rates in the collection and transportation market are becoming the norm.
In Herbert CEO Harben Jensen's view, the chartering of large shippers "is still very rare and has little impact on the market, indicating that people are trying to get capacity at all costs. But in the long run, chartered boats are not attractive because they are not competitive in cost. "
He said at a recent news conference that, driven by US imports, the strong performance of the container market would continue until at least next spring and was expected to return to normal by the middle of next year.
In fact, after the "Global Shipping Regulatory Summit" held by China's Ministry of Communications, the United States Maritime Commission and the European Union in early September, a number of container shipping companies, including Maersk, Dafei and Hebrot, announced that they would freeze or suspend the adjustment of spot freight rates. the spot freight rate of containers on the trans-Pacific route fell immediately.
According to Freightos Baltic's Global Container Index (FBX), freight rates from Asia to the West Coast of the United States fell to $16153 / FEU (40-foot containers) on the eve of the National Day holiday, down $3029 from a week ago, while rates from Asia to the East Coast of the United States fell by $3523 to $18711 / FEU over the same period. The latest Shanghai export container freight index released by the Shanghai Shipping Exchange also fell 29.69 points to 4614.1 points compared with the previous period.
At the same time, freight rates for long-term contracts continue to rise. According to Xeneta Shipping Index (XSI), which reflects the trend of long-term contract freight rates, the level of freight for the latest contract from the far East to the West Coast of the United States (USWC) is close to $9000, up more than 100 per cent from the same period last year.
The rise of long-term contract freight rates not only ensures that the collection and transportation companies will get higher returns than in previous years during the term of the contract, but also means that the high freight rate level of the collection and transportation market has been recognized by both supply and demand.
Jia Dashan, deputy director of the Waterway Research Institute of the Ministry of Transport, wrote that as of August this year, container ship order capacity accounted for 21.3% of the existing fleet, far lower than the 60% level of the last shipping peak in 2007. He believes that even if the above-mentioned newly built ships are put into use before 2024, under the background of an average annual growth rate of 3% and an average annual ship-breaking rate of 3%, the relationship between capacity and volume is basically inconvenient, and the collection market will still maintain a high level of freight rates.
It is worth noting that Coca-Cola Company's "trick" of leasing bulk carriers shows that high container prices are bringing low-value bagged goods back to the bulk carrier market, which is likely to further enhance the prosperity of the bulk carrier market.
The Baltic dry bulk Freight Index (BDI) failed to stop its rally after breaking the 5000-point mark at the end of September. On Oct. 5, BDI closed at 5409 points, up 2.7% from the previous day, up more than 40% from 3822 a month ago, and continued to set an all-time high since September 2008.
Edit: Quan Ze Source