Pre-occupation of vessel space by Chinese shippers has emerged as a global trade issue. Korean companies are also struggling to find ships to transport exports on time. China's spot rates are soaring day by day, and vessels already full of cargo at Chinese ports cannot afford to load more in Busan. China has become a black hole of vessel space.
On July 30, the comprehensive SCFI stood at $4,196, about 3.8 times higher than $1,103, where it stood at this time last year. The European route was $7,395 (TEU), and the USWC was $5,518 (FEU). Domestic exporters are suffering as vessels are filling up already in China or leaving empty space for Chinese cargo and not calling Busan Port.
According to data from the Busan Port Authority, 14,971 container ships arrived at Busan Port from the beginning of this year to the end of July. This figure is down 9.7 percent from the 16,578 figure that represented the same period last year. Looking at the figures from the same periods from 2014 to 2021, the number of visits increased from 2015 to 2017 and then decreased slightly. This is because ships have become larger. However, the reduction of ships exceeded 4 percent in 2020 and nearly 10 percent in 2021 and can be clearly attributed to Chinese cargo.
In consultation with HMM, the Ministry of Oceans and Fisheries has been expanding and deploying temporary ships operating via the US routes from two to four times a month since July and has also set up a temporary plan to lease multipurpose vessels. However, since HMM is a member of The Alliance, the ships have to be distributed equally to its allies even if they are its own vessels. Therefore, it is unlikely that additional ships will be of much help to domestic shippers.
In order for Korean shippers to export goods, they have to secure space through fierce fare competition with Chinese shippers. The Ministry of Strategy and Finance and the Ministry of Oceans and Fisheries have recently decided to increase their freight support, including export vouchers, from 12.1 billion won to 26.3 billion won and to provide 20 billion won of special loans to small and medium-sized exporters. However, sustaining this support for a long period of time will put a strain on the nation’s economy.
No one knows how long this situation will last, just as the current freight surge was unexpected. However, given that the end of the current pandemic is also unclear, the logistics crisis is likely to continue. Long-term measures must be established by the government, shippers, and shipping companies.
미디어케이앤은 BVL(Bundesvereinigung Logistik : 독일연방물류협회)의 한국대표부로 양국간 물류비지니스의 가교역할을 하고 있습니다.