2 November 2021

The Shipping Crisis - Are we over-ordering?

Amador Pérez Morales, Procurement Manager at Lecta, writes on Linkedin that since November 2020, the sea freight market has challenged more and more imports from Asia. 

 

 

Today, the price of the sea freight from China to EU is 7 times more expensive than January 2020. Importing any product from China is now about 0.6 usd/kg more expensive. This, plus: the transit time, power cuts, and uncertainty… is moving more and more the demand from Asia to EU.

 

So now, many companies in EU have now very long order books and are forced to work in allocation. Therefore, the demand is not covered at all. 

 

The funny thing is that whatever we do now; EU has not enough capacity to cover its own demand for many raw materials. There is still a big dependence on Asia. 

 

Such big demand is realistic or we could be now in an over-ordering stage?

 

From January to August 2021 the imports in mt (metric tonnes) from China, Taiwan, Thailand and Vietnam to EU have grown by 5,26% versus same period of 2019

 

What is more impressive is that in June 2021 imports in metric tonnes from those countries were 18.22% higher than same month in 2019.

 

Does this really respond to an increase in final customer demand? 

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