Written by The volume of cargo between Korea and Central and South America increased for 7 consecutive months.
Despite the shipping companies’ efforts to control supply, including a series of temporary cancellations (blank sailing), they failed to defend freight rates.
Freight rates fell below the $2,000 level in four months, and the cargo load ratio of shipping companies on the eastern coast of South America, which had always filled their ships, remained at 80% this month.
However, due to the restrictions on passage through the Panama Canal, the sludge rate on the west coast of South America was generally full.
According to China’s Shanghai Shipping Exchange, the average freight rate from Shanghai to Santos, Brazil, as of the third week of September (15th) was $1,932, down $390 from the previous month. Despite the weak freight rate, it was $66 higher compared to September 2019 ($1,866) before COVID-19.
Looking at weekly freight rates, they have been falling for five consecutive weeks until the third week of this month. The $2,000 level, which was barely maintained at $2,055 in the first week of the month (the 1st), collapsed in the second week (the 8th) and the third week, recording $1,924 and $1,816, respectively.
Due to the influence of the Chinese market, freight rates from Korea were also weak. Korea Maritime Corporation’s September average container freight index (KCCI) for flights from Korea to Central and South America was recorded at $2,373, down $390 from the previous month. Xi’an freight rates also dropped by $88 from the previous month to $2,243.
The published freight rates from Korea to Santos reported by major shipping companies to the Ministry of Oceans and Fisheries ranged from $1,693 to $2,600 per 20-foot container (TEU), including various fuel surcharges. By shipping company, Taiwan’s Evergreen and France’s CMA CGM reported prices of $2,500 to $2,600 and $2,500, respectively, this month. China’s COSCO and PIL decided to charge $2,055 and $1,800, respectively, while Switzerland’s MSC recorded $1,693 to $1,943.
Trade volume between Korea and Latin American countries continued to grow positively for seven consecutive months until last month. According to the Korea Customs Service, the volume of cargo between Korea and Central and South America in the month of August increased by 11.8% compared to the same period last year, reaching 191,100 TEU. It grew by 36.4% compared to August 2019 (140,100 TEU) before COVID-19. Exports and imports were 147,000 TEU and 44,100 TEU, respectively, an increase of 15.2% and 1.8% compared to the same period last year.
The overall cargo volume performance of the top five countries in Central and South America also increased by 4.6%, handling 132,500 TEU. Mexico and Chile, major trading partners in Central and South America, rose 7.3% and 11.3% to 59,700 TEU and 33,700 TEU, respectively. Following this, Peru and Colombia also recorded 13,400 TEU and 11,000 TEU, respectively, an increase of 18.5% and 16.5% compared to the same time a year ago, but Brazil decreased by 26.4% with 14,800 TEU.
excerpt from Mr. Hong(kehong@ksg.co.kr)