China-Europe container shortage causes major surge in freight rates

The recovery in China’s manufacturing activity after the Covid-19 lockdown has surged progressively and after a halt caused by quarantine measure in the European countries, demand for Chinese products in Europe has increased. Thus, a shortage of containers and container ships from China to Europe has pushed up freight rates between the regions.

According to freight industry media, freight prices per-container which previously stood at US$1,000, now more than doubled with quotes at US$ 2,200. The recovery in China and then in Europe saw a mini-boom on the Asia-Europe container trade routes in Q2 and Q3 2020. At the end of Q3, the headline rates on Asia-Northern Europe (specifically Shanghai to Antwerp) had increased to US$2,336/FEU, according to Alphaliner.

Also, most producers and sellers expect prices to rise to US$ 3,000 per container in the near term, which will have a clear an impact on the wood products industry prices. A little relief in container shortages could be noticeable at the end of the year, but most market participants don’t expect a major improvement until after the Chinese Lunar New Year Holiday in February 2021.