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With economic activity rebounding, the global shipping industry has also become busier…
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On July 6, U.S. network CNBC reported that as economic activity gradually resumes in parts of the world, the landscape of the traditional shipping industry is undergoing transformation.
On July 6, U.S. network CNBC reported that as economic activity gradually resumes in parts of the world, the landscape of the traditional shipping industry is undergoing transformation.
CNBC reports that, spurred by the recovery of trade and robust demand for commodities, global shipping activity has picked up. However, disruptions to global supply chains are posing significant challenges to transportation demand.
In a recent report, JPMorgan analysts noted that port congestion and shortages of containers and vessels are expected to persist for some time.
Research firm TS Lombard notes that, as economies reopen and vaccination rates rise, demand for commodities such as oil, lumber, and even corn has surged, leading to a severe shortage of container ships.
In April this year, the world’s largest container ship, the Ever Given, became stuck in the Suez Canal, disrupting traffic for a full week. The canal is one of the busiest waterways in the world, handling 12% of global shipping trade.
According to a report by People’s Daily, on May 21, Shenzhen detected one asymptomatic COVID‑19 case during routine testing of personnel boarding international cargo vessels at Yantian Port. Following the outbreak, in accordance with national, provincial, and municipal epidemic prevention and control guidelines, Yantian Port implemented restricted operations, reducing the number of operating berths from 20 to 5 and cutting daily throughput to 11,000 TEUs—just 30 percent of its usual level. As of midnight on June 24, Yantian Port had fully resumed normal operations.
JPMorgan analysts noted in a report that, as Shenzhen’s Yantian Port is the world’s fourth-busiest container terminal—handling more than one-third of Guangdong Province’s foreign trade and one-quarter of China’s U.S. trade—the month-long operational restrictions have triggered ripple effects throughout the global supply chain, including longer container turnaround times and higher shipping rates.
High demand and tight supply have driven up vessel prices. Vessels have long been regarded as assets of shipping companies and a key source of cash flow. Consequently, rising vessel values boost companies’ net asset values, which in turn lifts their stock prices.
JPMorgan analysts note that shipowners are benefiting from the robust growth in commodity trade. “Driven by a rebound in trade volumes—particularly minerals and grains bound for Asia—and China’s vigorous restocking of iron ore and coal inventories, shipowners’ earnings have remained at decade‑high levels since 2021.”
According to the China Shipping Prosperity Report for the second quarter of 2021, released on July 5 by the Shanghai International Shipping Research Center, the China Shipping Prosperity Index reached 126.39 points in the second quarter of 2021, entering the relatively prosperous range and hitting a new all-time high since the index was first published. Meanwhile, the China Shipping Confidence Index stood at 164.20 points, essentially unchanged from the previous quarter, remaining in the strongly prosperous range.
Among them, container shipping companies continue to enjoy improving overall operating conditions, with business leaders expressing strong confidence in future performance and maintaining an optimistic outlook on the market. Looking at key operational metrics, despite a continued sharp rise in operating costs, these companies have slightly increased their capacity deployment, seen a substantial improvement in cabin utilization rates, and experienced a significant surge in freight rates, sustaining robust profitability. Moreover, liquidity remains ample, financing challenges are easing, debt levels are declining, investment appetite for capacity is rising sharply, labor demand continues to grow, and risk resilience is steadily strengthening.
Economic activity, enterprises, containers, shipping, China, continue, prosperity, Yantian Port, operations, vessels
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Taishan Xinhe Shipbuilding Co., Ltd. specializes in the construction of high-quality vessels, including ocean-going fishing boats, engineering vessels, cargo ships, cement-carrying tankers, passenger ships, and yachts, all with a maximum length of 120 meters or less.
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