DUBAI, Arab Emirates, November 10, 2021 (Newswire.com) - Shipping companies increased their shipping costs in the second week of November for the fourth time in 2021. This is the first time in the last few years that shipping companies increase their freight costs four times a year. Infinity Galaxy, an international bitumen supplier, has released a report on the current highly volatile freight and GRI.
This freight growth has directly affected the bitumen market.
Coronavirus has caused general changes in the use of containers in different ports. As a result, container shipping costs have increased substantially, affecting the cost of exporting bitumen in drums/jumbo bags as well.
In summer 2021, the National Shipping Association announced congestion at major ports had significantly impacted freights and disrupted supply chains throughout the world.
In 2020 and 2021, the average container fare tripled. The price of containers has increased by 150% to 450%, depending on the origin and destination, since 2021.
Rising freight rates directly impact bitumen exportations, since 90% of the transportation is through shipping lines.
The following are the freights for drum packed bitumen to Matadi Port in Congo DRC and Navegantes in Brazil by Infinity Galaxy from Jebel Ali port.
In August 2019, when there was no COVID problem, the transportation cost in the above-mentioned ports was as below:
- Freight of Normal cargo like Bitumen, from Jebel Ali to Matadi Port, Congo DRC: 140 USD per metric ton
- Freight of Normal cargo like Bitumen, from Jebel Ali to Navegantes, Brazil: 125 USD per metric ton
In August 2020, in the middle of the COVID outbreak, the shipping costs reached:
- Freight of Bitumen Cargo, from Jebel Ali to Matadi Port, Congo DRC: 160 USD per metric ton
- Freight of Bitumen Cargo, from Jebel Ali to Navegantes, Brazil: 150 USD per metric ton
By August 2021, the above shipping costs reached the following level:
- Freight of Bitumen Cargo, from Jebel Ali to Matadi Port, Congo DRC: 395 USD per metric ton
- Freight of Bitumen Cargo, from Jebel Ali to Navegantes, Brazil: 400 USD per metric ton
When a container is sent to a port, it should return with new cargo. Small ports lack constant cargo circulation; therefore, rates of returned containers are less than large ports.
Subsequently, many shipping companies were reluctant to send containers to small ports to avoid deposition and increased costs. Many projects around the world have suffered heavy losses due to delays in receiving raw materials, such as bitumen.
In August 2021, Infinity Galaxy pointed to the improvement of vaccination situations all over the world and oil hikes stimulating bitumen prices.
Rising transportation costs also boosted the final price of bitumen in 2020 and 2021.
Facts show these transportation conditions will continue and stimulate bitumen price until mid-2022.
Source: Infinity Galaxy