Insufficient pure car and truck carrier (PCTC) space is driving some Chinese car-makers to use containers to export their automobiles.
Adding to the attraction are rates that have tumbled from the historical peaksof last year, while prices for space on car-carriers have soared.
Chinese forwarder Qingdao Shengyun International told The Loadstar the company had been using containers to move new vehicles to US customers for a while.
A representative said, “PCTCs tend to be built for long-term charter to automobile makers and it’s difficult to find one on an ad hoc basis. Now container freight rates are near pre-Covid-19 levels, many shippers are moving cars in boxes.”
Movement restrictions imposed during the early wave of the Covid-19 pandemic slashed demand for cars, which saw some older PCTCs being scrapped and there was a disinclination to build new vessels. As pre-pandemic lifestyles resume, demand for vehicles is recovering, causing a PCTC shortage.
VesselsValue’s head of ferry, vehicle carriers and ro-ro, Dan Nash, told The Loadstar average light vehicle spot rates on PCTCs from Shanghai to north-west Europe (Zeebrugge, Southampton, Bremerhaven) had firmed by 17% last month, from average Q4 22 rates. In contrast, spot container rates on the same route softened even further following Chinese New Year, averaging $1,700/feu, excluding handling.
Mr Nash said: “Comparing ocean freight from Shanghai for both modes, manufacturers must pay four times as much for PCTC space versus containers at present, subject to the freight forwarder or carrier.”
According to German forwarding group Karl Gross, there are containers specifically designed to move vehicles that offer slots for three or four vehicles, depending on their size, having ramps inside for double- or diagonal-stacking.
On 1 February, Chang’an Minsheng, the transport arm of state-owned Chang’an Automobile, China’s oldest car-maker, signed a contract of affreightment (COA) with Cosco unit Guangzhou HiSeas Autoship, to run until 2027, for multimodal logistics solutions for Chang’an’s car shipments.
Since October, HiSeas has sealed COAs with three other compatriot car makers, China FAW Group, Dongfeng Liuzhou Motor and SAIC Motor.
Another advantage of containers is that they can also be moved by rail and, in the face of sanctions against seaborne shipments to Russia, the Chinese government wants to increase rail freight volumes.
China Railway said last month its China-Europe Railway Express operated 1,410 trains and transported 147,000 teu, a year-on-year increase of 6% and 13%, respectively – 16 January saw the first China-Europe Express, a special train service for Chinese car exports and, since then, many Chinese car shippers have been railing vehicles to Europe.