News - General NewsShipping and logistics woes continueRecord shipping costs are adding to supply chain pressures for automotive manufacturers26 Sep 2022 By MATT BROGAN AS THE automotive industry continues to grapple with the lingering effects of the COVID-19 pandemic – including the ongoing and highly publicised microprocessor shortage – it seems a further blow dealt by record shipping costs is now making its impact felt across the globe.
According to a report published by Bloomberg this week, a steady recovery in demand coupled with a stagnating vessel fleet has spurred record rates for ships that each carry as many as 6500 cars at a time.
Earnings for freighters moving cars, truck and industrial machinery across the seas have surged to around $US80,000 ($A120,000) per day, the highest recorded since at least 2000 according to Clarkson Research Services, a unit of the world’s largest shipbroker.
Over an average 60-day voyage that would imply about $US740 ($A1110) per vehicle, a fivefold increase since the start of the pandemic. That surge has several automotive manufacturers concerned for their ability to secure ships to haul their vehicles to market.
“People are concerned they can’t get hold of tonnage. It’s underinvestment for many years, and when demand is still there, the day comes when it pops,” Gram Car Carriers ASA CEO Georg Whist told Bloomberg.
According to Clarkson Research Services data, Europe, the United Kingdom and the United States are the biggest automotive importers with an increasing number of exports coming from China.
The data show demand for so-called roll-on / roll-off (ROFO) ships – like the Felicity Ace that sunk while carrying 400 vehicle across the Atlantic Ocean earlier this year – is now at its peak, with some automotive manufacturers signing deals five years in advance, at an average rate of $US60,000 ($A90,260) per day, to secure transport.
Fearnleys Securities analysts including Oystein Vaagen say the rates are “mind-boggling”. The company’s shares rose 15 per cent on Tuesday and a further six per cent on Wednesday.
Other listed owners, including Hoegh Autoliners ASA and Wallenius Wilhelmsen ASA, have also climbed appreciably over the past few days.
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