September 22, 2021

Data Insight: Soaring Ocean Freight Prices

by Tajinder Dhillon.

Shipping costs have soared over the last 18 months as bottlenecks in supply chains and increased consumer demand have put a strain on the shipping and logistics industry.  Adding further pressure is the fact that ships have been backlogged and sitting idle at various ports for months.  This will reduce the number of freight containers available which puts further pressure on freight prices.

Using Refinitiv Eikon Workspace, we can look deeper into congestion levels at any port using the Interactive Map tool.  Specifically, we look at the Port of Los Angeles and Port of Long Beach, two of the most critical ports that handle U.S. imports.

Exhibit 1 highlights container vessels that are sitting both inside the ports and outside waiting to enter.  The Port of Los Angeles and Long Beach are highlighted in red, and the number of vessels is marked in blue.

The tool updates in real-time and as of September 22nd, there are currently 96 containerships in port and outside port (in anchorages and open waters).

Exhibit 1: Port Congestion at Los Angeles and Long Beach

Source: Refinitiv Eikon Workspace

Using Refinitiv Datastream,  we can look at two benchmarks that gauge ocean freight rates.  Looking at Exhibit 2, the Shanghai and China Freight Composite Indices have more than doubled since 2020 to record levels.

Exhibit 2: Scfi and Ccfi Index

As a result of the strong pricing environment, the Global Marine Transport sub-industry is the top performing industry year-to-date when looking at Refinitiv Datastream Indices.  These indices comprise of a global basket of large-cap constituents allowing for granular visibility on specific industries.

The Global Marine Transport Index which includes companies such as AP Moeller-Maersk A/S and Hapag Lloyd AG is up 69.4% year-to-date as shown in Exhibit 3, significantly outpacing the global equity market.

Exhibit 3: Sub-Industry Performance Year-to-Date

Stay tuned for a follow-up post which takes a closer look at how the Danish shipper AP-Moeller-Maersk has benefitted from a surge in freight rates.

 

 

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