THERE is no end in the near term for the freight-rate fuelled container shipping boom, according to the latest maritime financial research from consultancy Drewry.
The research, reported in Drewry Maritime Financial Insight – July 2021, found container freight rates on some routes are close to US$13,000 per 40-foot container, almost guaranteeing record profit for carriers this year.
“Booming freight rates have ensured that stock markets remain strong, and many investors are unsure whether to book profits or stay invested,” Drewry said in the report.
“However, if the recent disruption at Yantian Port is to be considered, port congestions, logjams and a higher freight as an outcome could be a recurring theme until 1H22. While the blockage of the Suez Canal is a rare likelihood, the risk that further outbreaks of COVID close to major hub ports remains ever-present, particularly given the prevalence of new viral variants.”
The consultancy said port and terminal operators are gaining strength from global vaccination drives and growth in international trade, sending its port sector index surging.
“The index in 2Q21 grew by 9.6% QoQ (vs 1Q21: 8.9% and 4Q20: 16.4%) on the back of higher returns posted by global/international terminal operators vis-à-vis their more geographically constrained regional terminal peers,” the consultancy said in its report.
“Despite the optimism, there remains a high degree of uncertainty attached with the spread of new variants of the virus (Delta and Lambda) and a sooner-than-expected interest rate hike – both of which can take a toll on economic growth prospects.”
In the dry bulk shipping area, the research showed the sector has been revving up over the past six months. The main driving force behind the rally, Drewry said, is China.
“The country’s insatiable hunger for commodities is expected to continue, which will boost the global dry bulk trade,” the consultancy said.
