A spokesperson for the Ministry of Commerce says the authority is pondering the rollout of measures to ‘increase shipping capacity and stabilise freight rates’. China said it is planning to release measures to tackle the thorny supply issues for shippers in the container shipping market, raising concerns about another round of clampdowns on freight rates.
Li Xingqian, head of foreign trade department at the Ministry of Commerce, told a press conference that solutions are being “brewed” in relation to the shortage of containers and the logjam in shipping and logistics.
“Our ministry is in talks with the Ministry of Transport and other related departments to adopt measures to increase shipping capacity and stabilise freight rates,” said Mr Li.
The stock price of Cosco Shipping Holdings, the box shipping and port arm of state conglomerate China Cosco Shipping Corp, tanked Friday morning following the remarks.
Its Shanghai-and Hong Kong-listed shares slumped by more than 9% and 5%, respectively, before the noon break.
A Shanghai-based equity analyst said the ministry’s statement apparently had a negative impact on CSH’s investors, adding there has been talk that Beijing is poised to hold another discussion with box shipping carriers to curb rates increases, especially on the transpacific trade.
But he said the downtick was also an expected correction to the previous bullishness. Before the latest turnaround the company, which controls the world’s third-largest containership fleet, had seen a five-fold boost in share value since mid-2020.
Lloyd’s List has approached CSH for comment.
Chinese regulators held a meeting participated in by a slew of container lines in September last year, in an attempt to curb freight rates. This effort largely failed amid a pandemic-disrupted market.
Shippers have said they continued to face a lack of carrying capacity to haul their cargo, and the resulting rocketing freight rates as well as prolonged slot booking periods.
Container line shipping companies, however, have argued that many of the factors leading to such results, including the congestion at ports, are out of their control, and the current robust freight market is largely driven by consumers’ demand.
That has been partly reflected in China’s stronger-than-expected exports in December, which jumped 18.1% year on year to $281.9bn, according to the latest official statistics.
Exports to the US led the growth momentum, having surged 34.5%, despite the trade dispute between the two major economies.
In a recent response to a Guangzhou-based exporter’s complaint, the transport ministry said it would step up efforts to examine whether carriers have performed their rate reporting duties properly, while also pledging to prompt them to further increase vessel supply and container availability.
This response came after a joint letter sent to the commerce ministry, in which the China International Freight Agency Association and the China Shippers’ Association said carriers’ illicit pricing measures have “significantly affected and disrupted” the country’s foreign trade and the international logistics markets.
The two suggested government authorities should launch an antitrust investigation into such practices.
Source: Lloyd´s
