The key topic when it comes to European imports from Asia remains freight rates. A 40ft container from Malaysia or Indonesia as late as last autumn cost US$1500 -$2000. By Q2 2021 importers were being quoted US$15,000- 20,000 and rates have stayed there.
This is attributed mainly to the general disruption to world trade caused by the pandemic, with a lack of return freight from western markets to South East Asia and empty containers stock piling in the wrong locations. In response, there has been a shift for some timber products, such as plywood and sawn timber, to break bulk.
But shippers have capitalised and put rates up here too. It’s also not proved a straightforward solution.
“It takes longer than shipping by container and is more complex to organise. You have to have the volume to make it viable, goods are more prone to damage and unloading is a time-consuming process,” said an importer.
They added that the breakbulk vessel Konya from Malaysia to Rotterdam and London Tilbury this summer spent weeks discharging at the latter, partly as the port was so busy, partly because personnel weren’t used to the work. It was reported to be the first timber breakbulk from Malaysia into London in 30 years.
“Breakbulk also just doesn’t work for more vulnerable and valuable goods, like flooring,” said one importer. “We’ve just had to pay the container rate and hope customers will cover the cost. Asian timber price rises this year average 8-10%. Freight has pushed that to 30%.”
No-one sees container rates changing significantly in the near future and, despite the issues with the Konya, another breakbulk vessel is due to set sail for continental Europe and the UK in October.
“Christmas goods traffic from China will now further underpin container prices, so we see little sign of softening for the next six to eight months,” said an importer. “Talk is also now that rates have historically been too low and that, even when they come down, it won’t be to former levels.”
Importing from Brazil is also proving a greater challenge. “Prices are sky high, driven up by US and wider global demand and also the serious Covid situation, which has led to personnel shortages and restricted mills’ output,” said an importer.
“The combination of the pandemic and political turmoil has also hit administration and it’s become increasingly difficult to secure export licences.”
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