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South American Routes Soared

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By Emily Jackson on 26/06/2024
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This round of increase in container shipping prices is mainly affected by many factors. First of all, the occurrence of the Red Sea crisis has led to tight shipping capacity. Shipping companies have taken measures to suspend sailings in response to insufficient shipping capacity, further increasing freight rates. Secondly, the shortage of containers has also exacerbated the rise in container shipping prices. In addition, with the recovery of demand in various continents, the demand for cargo transportation has increased, which has also had a positive impact on container shipping prices.

However, in this round of early container shipping price increases, small and medium-sized freight forwarders have not received much benefit. Since shipping companies have raised prices, customers are more inclined to conduct price comparisons, and competition among freight forwarders has intensified, making business more difficult. Some freight forwarders said that they are now faced with market conditions such as "it is difficult to find a container", "sea freight prices are rising across the board" and "containers are dumped", which have put great pressure on operations.

According to the latest Shanghai Container Freight Index (SCFI), the four major routes have all increased. The increase in Europe is slightly lower, and the increase in the US route is more significant. The most violent increases are in South America, South Africa and West Africa routes, while South America routes are even more It has been rising sharply for several weeks. It is worth noting that the market freight rate from Shanghai to South American basic ports has doubled compared with the beginning of the year, an increase of 130.47%.

 

Recently, the global shipping market has seen a series of significant changes, especially in South American routes. Many shipping companies, including CMA CGM and COSCO Shipping, are increasing their investment in shipping capacity in the South American market and opening new South American routes. This move is mainly in response to the policies of South American countries such as Brazil to increase import taxes on goods such as electric vehicles and solar panels. Due to the increase in tariffs, many customers hope to ship to South America first to avoid the increased tariff costs.

 

According to the website of the Chinese Ministry of Commerce, Brazil has decided to impose a 10.8% Mercosur external unified tariff on photovoltaic module products. However, in order to adapt the market to this new regulation, relevant agencies have set a tax-free quota that will decrease year by year until 2027. Since 99% of solar panels in Brazil come from China, the sooner Chinese photovoltaic companies export to Brazil, the fewer tariff restrictions they will face.

Emily Jackson
Author
Emily Jackson, a seasoned author with extensive experience in the agricultural food industry, specializes in the quality inspection of supplier products. Her deep understanding of the sector ensures a keen eye for detail and a commitment to upholding high standards in food production. Outside of her professional work, Emily is passionate about sustainable farming practices and advocating for food safety initiatives.
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