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Economic Activity Resumes, Global Shipping Industry Gets Busy...
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On July 6, CNBC reported that as economic activities gradually recover in some parts of the world, the landscape of the traditional shipping industry is undergoing changes.
On July 6, CNBC reported that as economic activities gradually recover in some parts of the world, the landscape of the traditional shipping industry is undergoing changes.
Economic Activity Resumes, Global Shipping Industry Gets Busy...
On July 6, CNBC reported that as economic activities gradually recover in some parts of the world, the landscape of the traditional shipping industry is undergoing changes.
CNBC states that stimulated by the recovery of trade and robust demand for commodities, the global shipping business is becoming increasingly busy. However, disruptions in the global supply chain are causing considerable challenges to transportation demand.
In a recent report, analysts from JPMorgan Chase pointed out that issues such as port congestion, container shortages, and ship scarcity will persist for some time.
Research firm TS Lombard noted that with the reopening of the economy and an increase in vaccination rates, demand for commodities such as oil, timber, and even corn has surged, leading to a shortage of container ships.
In April of this year, the world's largest container ship, the "Ever Given," was stranded in the Suez Canal, causing a week-long traffic interruption. The Suez Canal is the busiest waterway globally, with 12% of shipping trade passing through it.
According to People's Daily, on May 21, during routine testing of personnel boarding international freighters at Yantian Port in Shenzhen, one asymptomatic carrier of the novel coronavirus was found. Following the outbreak, Yantian Port implemented limited operations as required by national, provincial, and municipal epidemic prevention and control measures, reducing operational berths from 20 to 5, and the daily throughput dropped to 11,000 standard containers, only 30% of the usual. Full-scale operations at Yantian Port were restored on June 24.
Analysts from JPMorgan Chase noted in the report that, given Yantian Port in Shenzhen is the world's fourth busiest container port, handling over one-third of foreign trade imports and exports in Guangdong Province and one-fourth of China's trade volume with the United States, the month-long restricted operations have had a chain reaction on the global supply chain. This has resulted in longer container turnaround times and increased shipping prices.
High demand and supply constraints have led to an increase in ship prices. Ships are traditionally seen as assets for shipping companies and a significant source of cash flow. Therefore, the rising value of ships will increase a company's net worth and subsequently boost stock prices.
Analysts from JPMorgan Chase stated that shipowners are benefiting from the booming commodity trade. "With the rebound in trade, especially minerals and grains entering Asia, and strong replenishment of China's iron ore and coal inventories, shipowners' earnings have been at their highest level in a decade since 2021."
According to the China Shipping Prosperity Report for the second quarter of 2021 released by the Shanghai International Shipping Institute on July 5, China's shipping prosperity index reached 126.39 points in the second quarter of 2021, entering the relatively prosperous range, setting a new historical high since its release. The shipping confidence index for China was 164.20 points, maintaining stability compared to the previous quarter and remaining in a strong prosperous range.
In particular, the overall operating conditions of container shipping companies continue to improve, and entrepreneurs are confident in future operations and optimistic about the market. Despite a substantial increase in the operating costs of container shipping companies, capacity deployment has slightly increased, cabin utilization rates have significantly improved, freight rates have risen sharply, and companies have maintained strong profitability. Additionally, companies have abundant working capital, reduced financing difficulties, reduced loan liabilities, significantly increased willingness to invest in shipping capacity, continued labor demand growth, and gradually strengthened risk resilience.
Economic activity, enterprise, container, shipping, china, continue, boom, yantian port, operation, ship
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Taishan City Xinhe Shipbuilding Co., Ltd. is located in the southwestern part of the Pearl River Delta in the Greater Bay Area of Guangdong Province. The company is situated on the banks of the Tanjiang River in Jiangmen City, adjacent to Kaiping and Xinhui, with a distance of about 40 kilometers from the Yamen estuary and approximately 120 kilometers from Guangzhou.
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