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【Youth Diary】 In recent years, air and sea freight rates are increasing. This is because the volume of cargo traffic is increasing significantly as the economies of the world’s major countries that were stagnant due to the new coronavirus infection (Corona 19) are recovering.
As a result, the shipping and aviation industries expect increased profits, but export companies cry as related costs rise.
According to the shipping industry on the 9th, the Shanghai Container Cargo Index (SCFI), which represents the level of freight rates for shipping routes, reached a record 1664.56, an increase of 134.57 compared to the previous week on day 6.
The previous high was 1,583.18 in July 2010.
In particular, maritime rates on routes to the US and Europe, used mainly by Korean export companies, have risen sharply.
Fares for the West Bank route reached a record $ 3,871 for 1 FEU (a 40-foot container). This is an increase of $ 22 from a week ago. Rates for European routes were also $ 1,246 for 1 TEU (a 20-foot container), $ 106 more than the previous week.
The industry predicts that the increase in shipping rates will continue until early next year. This is because fleet demand (cargo capacity) has increased significantly due to the economic recovery in the US and China, while shipping companies significantly reduced the supply of container ships after Corona 19 earlier this year. year.
Furthermore, large-scale events such as Black Friday, Christmas, and Chinese New Year are scheduled to take place one after another, so the cargo volume is expected to increase further.
Air travel rates are also surprisingly high. According to Hong Kong’s TAC Freight Transport Index, Asia-Europe and Asia-America air freight rates increased 25% and 28%, respectively, compared to the previous month.
The Shanghai-North America air freight rate also hit a record $ 6.07 per kg on the 26th of last month, an increase of 26.2% from the previous week.
Air freight rates are expected to continue to rise for the time being as the number of items converted to air freight increases amid the recent increase in ocean freight rates. The freight rate is expected to increase further if next year’s COVID-19 vaccine-related transportation demand is added.
Vaccines are mainly transported by air because they must be stored at a low temperature of 2 to 8 degrees Celsius.
Increased air and ocean fares are expected to have a positive effect on industry earnings.
HMM, Korea’s largest container shipping company, managed to turn a profit in just 21 quarters in the second quarter and is expected to post operating profit in the mid-range of 300 billion, the record in Q3.
Korean Air, the number one aviation company, is also expected to generate operating profit of 100 billion won in the fourth quarter of this year thanks to an increase in cargo volume and freight rates despite a sharp drop. in passenger demand. Korean Air posted a surplus for the second and third consecutive quarters this year due to increased cargo demand.
On the other hand, higher freight rates are expected to increase costs for exporting companies. In particular, small and medium-sized companies with weak capital are struggling because they cannot find both ships and planes to load their products at skyrocketing rates.
Some small and medium-sized enterprises (SMEs) have suffered losses and turned to expensive air travel for a relationship of trust with their customers, but large corporations are known to dominate in this case.
【Youth Diary = Reporter Lee Seung-gu】
