How much is opium for RoRo shipments?
About the growth of rates. Now the situation is very reminiscent of when the last seat remains on the bus and the last two passengers are bargaining for it until the last dollar, just to leave. At the same time, there are only two passengers, but they want to leave so much that they inflate prices into outer space.
The rise in container rates has generated a stir in other types of transportation. A 40-foot container is 20-22 thousand dollars from China to Ukraine.
Korea – freight is about 15 thousand for a 40 ‘container. And this is without the PRR, fastening / unfastening, etc. For the used car market, this is beyond good and evil. With the cost of Korean cars 4-5 thousand – transportation in containers equaled the cost of a car, and such import makes no sense: it is cheaper to carry from Europe.
There is chaos and anarchy in the RoRo market. Cline – booked-rebooked. Korea is leaving at the very least, but from the second or third time. That is, you book a ship, but you can leave only on the next one, or through one.
Mass production of cars, which continued to be bought during covid, but did not produce, is now starting to catch up, creating a collapse already in RoRo transport.
You need to understand that the RoRo market is tailored for working with brands, not small and medium clients. That is, a client with a lot of 50 cars for transportation (or 300, or 500) is, of course, a client, but he will never be put in priority. Brands make tenders, according to which they subscribe for a year with carriers. The volumes are large, but the lines are fighting for them, since the number of such large customers is limited, and the lines have to move a lot in price during this competition.
The very process of confirming loading on a ship is an example of gloveboxing. Suddenly it turns out that your beloved Renault, Peugeot or Toyota needs to additionally load +200 cars. And the line cancels small customer bookings (the same time or two when you don’t board a confirmed ship). And it happens the other way around: first, plus 200, and then everything changed and not only these, but another 100-200 cars were canceled. And before each departure of the ship from Asia, people with gray hair (there can be no other color with such work) once again replay everything.
RoRo services in Asia are sorely lacking. Traditional RoRo carriers such as Kline, Hoeg, Wilhemsen (which will not merge with Eucor finally), NYK, MOL, Hyndai Glovis say: 1) there are no seats; 2) each one lacks 2-5 additional calls per month to take out of China at least the already contracted volumes. The deficit is such that new carriers appear. CIG shipping service from Incheon (South Korea) to Europe and to Chornomorsk via Piraeus. Or even the traditional European carrier Neptune Lines opens its Shanghai-Piraeus line, despite the fact that it has never made flights outside of Europe. By the way, this direct service should make its first exit from Shanghai at the end of September. Already full, and in October it is also full.
RoRo rates from China continued to rise following container rates. And, if earlier they were about $ 2500 for a sedan, now they are being pulled up to $ 4500, which is still a little cheaper than containers. Korea is still holding at around $ 1,500 for a sedan.
The same situation, in principle, can be observed in other areas adjacent to sea container transport – air and rail. They also pulled up: so as to be cheaper than the sea, but still more expensive than before.
Hotheads would love to charter their RoRo ship, but time charter rates have skyrocketed there too. At the same time, the shipowners want to sign a charter for 3 years, at a high rate as it is now, yeah. And no, if you open a BVI, sign a charter for three years, and then lose the company when the music dies down, it won’t work. Nobody will take your “horns and hooves” seriously.
I must say that the RoRo carriers missed the flash. It was necessary to charter ships back in the fall, when container rates reached a consistently high level. And now the market is squeezed and capacity expansion is as constrained as that of container operators.
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