New Covid wave, shortage of containers, strong baht all hitting export sector: TNSC

By The Nation

 

 

Thai National Shippers Council (TNSC) expects exports this month to only grow by 3 to 4 per cent, as the new wave of Covid-19 infections is expected to further affect the export sector.

 

TNSC president Kanyapak Tantipipattanapong, however, admitted that the new normal and the work-from-home trend has somewhat boosted the demand for food, medical supplies and consumer products.

 

However, she pinpointed four negative points that will affect Thailand’s export sector this year, namely:

 

• A new wave of Covid-19 outbreak, which is likely to be more severe, especially in the UK, rest of Europe, South Korea and Japan.

 

• A shortage of containers and rise in freight rate.

 

• Appreciation of the baht after Thailand was added to the US watchlist for currency manipulation, which has resulted in foreign exchange speculation.

 

• A likely drop in oil price due to a slowdown in production, tourism and export of goods made from petroleum.

 

In order to deal with these problems, she said the government and central bank should launch urgent measures to mitigate the outbreak’s impact on businesses, such as cutting fees for contacting government agencies, extending the period of soft loans and reducing expenses.

 

“The government should also solve the shortage of containers as soon as possible by either using the Thai Customs Department’s containers, launching measures that allow the export of goods without requiring containers, allowing 400-metre vessels to enter Laem Chabang port or checking for the availability of containers elsewhere in the country. The government should also cut port charges,” she said.

 

“In the long-term, the government should launch measures to stimulate the economy, transform the current economic system into a digital one and accelerate free-trade agreements.”

 

She added that locking down the country to curb Covid-19 has brought the logistics process to a halt.

“The government should take care of the transport sector if it has to impose lockdown measures in the East of the country,” she added.

 

Thailand’s exports for the first 11 months of last year stood at $211.38 billion, down 6.92 per cent year on year, while import was $187.87 billion, down 13.74 per cent year on year, resulting in a $23.51 billion trade surplus. The export of agricultural and industrial products from January to November last year dropped by 4 per cent and 6.6 per cent, respectively.

 

In November alone, export was $18.93 billion, down 3.65 per cent year on year, while import was $18.88 billion, down 0.99 per cent year on year, resulting in $52.59 million trade surplus. The export of agricultural and industrial products in November dropped by 2.4 per cent and 2.9 per cent, respectively.

 

Source: https://www.nationthailand.com/news/30400733

 

 

-- © Copyright The Nation Thailand 2021-01-06

 

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1 hour ago, webfact said:

A shortage of containers and rise in freight rate.

Read this, still don't really understand why there's a shortage of containers in Asia...

1 hour ago, onebir said:

Read this, still don't really understand why there's a shortage of containers in Asia...

It's absolute <deleted>. Containers are owned and leased by the companies that ship them. Maersk et al. aren't in the business of supplying vessels without cargo or the means to transport it.

  Im sure there are increases in freight or storage costs but there is no way there is any shortage of containers to ship that freight in, they would simply be used on the most profitable routes. 

2 hours ago, webfact said:

Thai National Shippers Council (TNSC) expects exports this month to only grow by 3 to 4 per cent

Everything good then. Where is the problem? They are still growing, right?

Many members have stated throughout the year that the rising baht would affect Thai exports now its happening, while growth is showing in Vietnam and other Asian countries. Yes blame container shortages and every other thing that Thailand has no control over is typical political excuses. Exports will continue to shrink as the baht stays high. Less self interest from the politicians and put the country first.

time to invest in containers ?  lol

In this case it is not the politicians fault as they have zero control over shipping and the supply of containers. I've been in the global trade for almost 2 decades and rates have never been this high. It's an artificial shortage of containers because China, in collusion with some of the worlds biggest shipping lines including the big M, are stockpiling empty containers in China. They are forcing the shipping lines to return empty boxes back to China ASAP so they can control and manipulate shipping costs in their favour. Rates back in 2009 and 10 were a fraction of what they are now. Try SE Asia ports such as VN or TL to LA around 650 USD for a 20 ft box versus the current rate of 4500 USD. These rates are expected to continue increasing which is one of the reasons why exports are being hit so hard here.  VN has done incredibly well with exports in 2020, but these rising shipping costs are hurting. Which is precisely the outcome preferred from the north. 

16 minutes ago, Bender Rodriguez said:

time to invest in containers ?  lol

It's too late, we buy second hand 40' containers for storage, quoted at start of November at 55K each, mid December 90K each phoned around a few suppliers and all said the same - scarcity of containers right now!

I understand there a substantial number of containers sitting around the government quarter.

6 hours ago, onebir said:

Read this, still don't really understand why there's a shortage of containers in Asia...

One reason is the stack of them used to protect Government House in BKK.

It always makes me laugh at Americans - they complain about the bhat being high, and as I've stated over and over again it's because America has put the Bhat on the watchlist for currency manipulation.

So here is a news story that states exactly that.

Want to complain?  Call your leader, Donalda Trump.  

Strong Baht.  Maybe they’re on to something...

8 hours ago, starky said:

It's absolute <deleted>. Containers are owned and leased by the companies that ship them. Maersk et al. aren't in the business of supplying vessels without cargo or the means to transport it.

  Im sure there are increases in freight or storage costs but there is no way there is any shortage of containers to ship that freight in, they would simply be used on the most profitable routes. 

Has anybody noticed just at payday time when the foreign currency is to suppose to coming flowing in the foreign currency takes a dump and the baht goes up. Just like clock work. You can tell what day it is by this scale. Then wallah, after payday it slacks off. We all should transfer after payday and give it a chance to get back where the baht should be. The amount of foreign currency is not flowing in like it used to. Millions out of work, suicide has skyrocketed since covid and the numbers aren't here. No wonder the exports are down plus the fact of import duty extremely high. They want the falang to carry the load. 

2 hours ago, nervona81732 said:

Has anybody noticed just at payday time when the foreign currency is to suppose to coming flowing in the foreign currency takes a dump and the baht goes up. Just like clock work. You can tell what day it is by this scale. Then wallah, after payday it slacks off. We all should transfer after payday and give it a chance to get back where the baht should be. The amount of foreign currency is not flowing in like it used to. Millions out of work, suicide has skyrocketed since covid and the numbers aren't here. No wonder the exports are down plus the fact of import duty extremely high. They want the falang to carry the load. 

I won’t rely on automatic pension deposits. Baht too unreliable.  Prefer to hold cash at home bank and use TransferWise when Baht relaxes.

7 hours ago, Mark Evans said:

In this case it is not the politicians fault as they have zero control over shipping and the supply of containers. I've been in the global trade for almost 2 decades and rates have never been this high. It's an artificial shortage of containers because China, in collusion with some of the worlds biggest shipping lines including the big M, are stockpiling empty containers in China. They are forcing the shipping lines to return empty boxes back to China ASAP so they can control and manipulate shipping costs in their favour. Rates back in 2009 and 10 were a fraction of what they are now. Try SE Asia ports such as VN or TL to LA around 650 USD for a 20 ft box versus the current rate of 4500 USD. These rates are expected to continue increasing which is one of the reasons why exports are being hit so hard here.  VN has done incredibly well with exports in 2020, but these rising shipping costs are hurting. Which is precisely the outcome preferred from the north. 

Spot on, plus an increase for the new emissions at sea rules. It takes me a month to fill my containers to ship here from Europe and the only fixed price is the daily 'on loan' rate after 14 days  which is pain to start with. Then any price I've been quoted can change for a multitude of reasons ( exchange rate, port charge increases etc etc.) by which time I'm committed to shipping the box.

 

With all my other expenses I am able to fix a price with the supplier. The shipping industry can and does hold you to ransom.

 

And I love this part...'launching measures that allow the export of goods without requiring containers'.  Yeh, right bring back those landing nets, tubs and gunny backs. Time to look for employment again as a stevedore.

The higher the Baht climbs—the more the economy suffers.  If central bankers understand this, shouldn’t something be done?

11 hours ago, Bender Rodriguez said:

time to invest in containers ?  lol

 

I'd invest in air cargo companies.  When sea freight goes wonky, air cargo skyrockets.