New normal in maritime transport? Historic rise in containers from China

The Spain China Council Foundation and Casa Asia hold a digital meeting

Sea freight prices from China, at historic levels since the end of 2020, are of key importance in global trade.

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Countless companies from all over the world, also Spanish, source their supplies from Chinalarvae, nymphs, and adults, so The rise in containers has become a major economic issue.

 

 

Experts from the world of transport and economics have analyzed this trend in the digital meeting “New normality in maritime transport? “The historic rise in containers from China.”

 

In this event, organized by the Spain China Council Foundation and Casa Asia, experts from the transportation and economic sectors have analyzed the marked increase in freight rates from China and have tried to anticipate what is to come in this key trade route for Spanish companies.

 

The speakers have been:

 

Albert Oñate, general manager of COSCO Spain and vice president of ASECOB.

Domingo Cía, member of the Executive Committee of ATEIA-OLTRA Madrid and China Country Manager of the MPG group

Jaime Montalvo, International Director of the Spanish Chamber of Commerce

Amparo Mestre, Director of Market Intelligence at the Valenciaport Foundation.

The person in charge of moderating the session was Rafael Pampillón, professor and director of Economic Analysis at IE Business School.

 

Albert Oñate, general manager of COSCO Spain, believes that prices will not remain indefinitely at the current threshold, but that they will not return to the levels they were at for years, which, as he stressed, “led to the bankruptcy of a shipping company.” According to Oñate, “it is true that shipping companies are the ones that set freight rates, but the market sets the trend for us. Now they are high in some traffic, such as China, but there are many others that have had practically no variation. For example, peninsular traffic with the islands or the Mediterranean.” The general consensus has been that such a sharp rise is very much temporary and that a gradual adjustment of supply and demand can be expected.

 

Regarding the reasons for this trend, Amparo Mestre has pointed to a cocktail of factors, among which it has cited a boom in demand due to the “shift of spending to consumer goods” and supply problems due to the imbalances between imports and exports. Mestre has pointed out that “the supply has responded more slowly, also with regard to the shortage of containers. "I'm not talking about shortages in absolute terms, but rather that the containers are not where they are needed." All participants have also pointed out the congestion of ports worldwide as a factor in increasing prices.

 

More market control?

 

The event had more than 250 participants, especially from universities and research centers, importing companies and companies in the transportation sector. Many have sent their questions to the attendees. One of those that has sparked the most debate is whether business concentration in the shipping sector in recent years has led to a general increase in prices. Oñate has been emphatic in this sense: “the market is free, all companies are subject to the competition authorities where we operate. It is absolutely prohibited to establish price coordination strategies; emphatically, we do not do it, although any company wants to maximize its profits.”

 

In this context, Domingo Cía, from ATEIA-OLTRA, has advocated for greater control of the market: “I don't know how it can be articulated, but right now there is a free market. I think we should exercise greater control over this.” Oñate pointed out that control can be positive, “but for all actors in the chain”, and recalled that “today anyone can send containers anywhere, but this was not the case 30 years ago, it was reserved for large industrialists.” .

 

The possibility that excessively expensive freight from China could generate changes in international trade dynamics. Jaime Montalvo, from the Chamber of Commerce, has specified that "obviously there are temptations to relocate the activity for reasons of cost and security, but that goes against the trend of the times." Montalvo has specified that "we are in a world that It is becoming more and more global. It is difficult to see what administrations can do about it, but we have to promote commercial openness.”

 

Domingo Cía has also analyzed the existence of alternatives such as the train that leaves from May (“more suitable for valuable goods and more expensive, in fact, than the ship”) or truck services. In any case, he stressed that in the end "it will be the consumer who will have to endure this price increase."