Sea freight has still not recovered from the pandemic. Despite the economic recovery, the price of containers is exploding and shippers are bearing the brunt of an increase which impacts both Moroccan imports and exports, but also the consumer. In a year and a half of health crisis, maritime freight rates have increased by more than 400%! The details.
Big concern among Moroccan exporters of citrus fruits and early vegetables in the face of maritime freight. Currently, on the eve of the start of their export campaign, refrigerated containers (reefer) cannot be found. “The shortage of refrigerated containers has reached its peak, as all countries have repatriated theirs to prioritize their productions. This is why exporters of fresh fruits and vegetables have sounded the general alert”, underlines Najib Cherfaoui, Port and maritime expert.
The harm was already deep even before this unavailability of refrigerated containers: these operators found themselves paying 45,000 DH for a 40-foot container between Agadir and Port Vendres (France), compared to 30,000 DH before the pandemic.
In the citrus and greengrocers ecosystem, several operators believe that “this surge in prices combined with the shortage of refrigerated containers, generates blank sailing at the level of certain direct shipping lines to the main customers of Moroccan exporters”. As a reminder, the Morocco-Saint Petersburg (Russia), Morocco-Port Vendres (France), Morocco-Canada (via Antwerp), Morocco-United Kingdom and Morocco-USA lines remain crucial for Moroccan exports of citrus fruits and of primeurs.
As a result, all traffic from the port of Agadir and the seasonal traffic from Nador are concerned. According to a source close to the Moroccan Interprofessional Federation for the Production and Exportation of Fruits and Vegetables (FIFEL), their organization has already made government authorities aware of the issue, especially since they have already signed contracts with buyers.
According to the Ministry of Agriculture, Moroccan exports of fresh fruits and vegetables made between September 1, 2020 and July 27, 2021, reached 2 million tons, against 1.88 million tons during the previous campaign, at the end of the year. same period, thus registering a growth of 5%.
It must be said that in addition to refrigerated containers, it is the price of general cargo containers in general that is exploding, causing shippers to suffer the brunt of an increase that weakens imports and exports. 40-foot containers at at least 200,000 DH to connect Shanghai (China) to Casablanca. This is the price recorded in recent weeks. They were around 40,000 DH before the pandemic.
Since then, trade has resumed, but containers and maritime capacity are not there. Several factors explain this situation. “There are enough containers in the world to maintain normal traffic in terms of international trade. The problem is that when the pandemic appeared, there was the confinement which caused a sudden stop in international trade. As a result, the containers leaving China with goods remained blocked at their recipients.
These boxes then remained there instead of being repositioned. In the fall of 2020, with the recovery of the Chinese economy, millions of containers were still scattered around the world, resulting in a severe shortage of containers for China when it needed them to meet demand. international.
In other words, it was this scarcity of empty containers that caused the prices to explode, insofar as all the customers were ready to pay a high price for an empty container in order to have their various orders delivered as soon as possible. , analyzes Najib Cherfaoui.
Be that as it may, in Morocco, the repercussions are very significant for shippers (industrialists and distributors). “The rise in maritime transport costs resulting from the surge in container rental prices between China and Morocco affects most industrial sectors, both for import and export. This situation makes manufactured products transported by container more expensive.
Imports include household appliances, televisions, air conditioners, telecommunications equipment, capital goods, foodstuffs. For exports, the most affected products are, among others, textiles, leather, crafts and cosmetics, etc.,” underlines the port and maritime expert.
On the national market, Moroccan industry, faced with tensions on the rise in the prices of raw materials and maritime freight, is passing on this surge to consumers.
A survey conducted by the Moroccan Observatory of Logistics Competitiveness (OMCL) among 54 foreign trade operators is revealing of the situation: 80% of exporting companies confirm that they have suffered an increase in container rental prices.
This percentage is higher among importing companies. In fact, 89% of these companies suffered a price increase. In terms of rate of increase, 54% of exporting companies saw their prices increase by at least 50%.
The biggest increases affected importing companies: more than 43% of these companies saw prices rise by more than 150%, of which 28% suffered overheating by more than 200%. These companies mainly deal with Asia and Europe.
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It is no coincidence that since last June, the national players in foreign trade through the Transport and Logistics Federation, under the CGEM, have been in conflict with the shipowners, in particular the subsidiary of the Danish giant Maersk, Sealand or even the French leader CMA CGM. Professionals consider the current tariff escalation as an “abuse of dominant position” on the national market.
It should be noted that this complaint to the institution headed by Ahmed Rahhou, follows the decision of the shipping company to subject Moroccan importers to a new surcharge, called “Merchant Haulage”. Since then, the verdict of the competition policeman has been awaited after hearing the various protagonists.
Problem of market concentration, even a lack of competition or not, the Administration of Joe Biden seems to think so in any case. The American President, for his part, wants to put order in the container sector. On July 8, he entrusted, by decree, the United States Department of Justice with the task of helping the Federal Maritime Commission (FMC) to investigate and impose fines on shipowners who charge unreasonable rates and fees.
According to Jen Psaki, the White House spokeswoman, at a press conference, the Biden administration is further interested in the concentration in shipping which currently allows “three major container alliances to control more 80% of the market” [2M from Maersk and MSC; THE Alliance made up of Hapag-Lloyd, Yang Ming and ONE; Ocean Alliance, which brings together Cosco, Evergreen, OOCL and CMA CGM, Ed]. “This concentration has contributed to a spike in shipping costs and fees during the pandemic.
The indexed price for shipping a container has increased eightfold. And container shipping companies charged companies massive fees while their goods remained in ports,” the US executive spokeswoman said.
According to international trade experts, companies can therefore expect reinforced supervision regarding detention and demurrage practices.
Coincidentally or not, the world’s third-largest shipping company, CMA CGM, announced on September 9 in a press release its decision to freeze, until February 1, 2022, its freight rates for spot contracts, negotiated for less than thirty days.
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But for importers and exporters, it is neither more nor less than a bluff on the part of the French shipowner. Because, they say, “this measure concerns spot contracts (rates negotiated for less than thirty days), and not long-term contracts, which cover nearly 80% of its activity”.
The next day, the German Hapag-Lloyd, world number five, decided in turn to cap, without specifying the duration. When will the return to normal? “The tariffs will at least remain blocked at the current level for the next six months”, predicts Najib Cherfaoui who underlines that with the soaring costs of maritime transport, the bill for maritime services is reaching significant levels. “The $2 billion deficit is on the order of Morocco’s energy bill,” he says.
In his view, a national fleet could enable the Kingdom to considerably reduce its balance of payments deficit and that this must be done within the framework of political will (see elsewhere). “The Moroccan companies have all disappeared. IMTC, which had about fifteen ships, went bankrupt in 2012 while Comanav was privatized four years earlier. Today, however, the link between the national flag and the competitiveness of the maritime logistics chain is becoming important,” notes the port and maritime expert.
Beyond that, Mehdi Laraki, President of the Morocco-China Business Council of the CGEM (General Confederation of Moroccan Enterprises), this pandemic has shown that Morocco cannot continue to depend on the outside for certain things. “The Kingdom has a card to play to capture the relocation of Chinese companies which are above all looking for more competitive markets in terms of costs.
Morocco, by its position, has all the assets to attract them and offer them joint ventures with Moroccan, even European companies, in order to develop their industries locally and meet the demand of the local market, but also African and why not European. The niches exist. Morocco has structures like the AMDI, the CGEM, the CRI to lead this project,” explains Mehdi Laraki who insists on a prerequisite, understanding the Chinese culture which is millenary.
Source: https://www.challenge.ma/fret-maritime-les-degats-de-la-hausse-des-tarifs-222213/
