Asia companies are using container ships instead of car carriers

China  automobile exports increased by 76% from January to June. Japan’s automobile export volume increased by nearly 20% from January to July. Because the supply of transport ships cannot keep up, the rent of some special car transport ships has reached more than five times the usual rate. Chinese OEM companies are considering using container ships to transport 20% to 25% of their exports.

As a new means of transportation for overseas markets, automobile manufacturers are paying increasing attention to container ships. This is because there is a worldwide shortage of dedicated car transport ships used in the past due to factors such as China’s increase in exports of pure electric vehicles (EVs).

In Japan, the shortage of semiconductor parts is easing and automobile production is gradually resuming. Japan’s automobile exports have also become active, and there is a trend of trying to export automobiles by container ships.

“I hope to use containers to export new cars.” It is said that after entering 2023, the person in charge of the European Container Shipping Company received such an inquiry from the logistics person in charge of the Japanese automobile manufacturer.

Automobile manufacturers in China, South Korea, and Europe have begun to trial container ships, and Japanese companies have also begun to take action.

On the other hand, container ships transport vehicles after loading them into containers. If it is a 40-foot container, 2 to 3 passenger cars can be loaded lengthwise. While used cars have been shipped before, there is little precedent for new cars.

The automotive industry’s growing focus on container ships stems from a global shortage of dedicated vehicle carriers. The automobile trade is becoming increasingly active, and the supply of transport ships cannot keep up.

First, China’s pure electric vehicle exports are expanding. In the first half of 2023 (January to June), China’s automobile exports increased by 76% year-on-year, reaching 2.14 million units. In the first half of the year, it surpassed Japan for the first time and became the first in the world.

In addition, Japanese automobile production, which had been stalled due to supply chain disruptions caused by the COVID-19 epidemic, has gradually resumed, which has also provided impetus for exports. Statistics from the Japan Automobile Manufacturers Association show that Japan’s automobile export volume from January to July was approximately 2.16 million units, a year-on-year increase of nearly 20%.

Data from Clarksons Research, a British research company, shows that the one-year charter fee for a special car transport ship is US$110,000 per day, more than five times the usual price, and the price remains high.

Under such circumstances, there are also shipowners who require long-term contracts of more than three years. Against this background, car manufacturers hoping to sign short-term contracts of less than one year have set their sights on container ships.

Statistics from the British research company VesselsValue show that “Chinese OEM (OEM) companies are considering using container ships for 20% to 25% of their exports.” Charter rates for car-specific carriers have risen, while rising container ship shipping costs have eased.

From the perspective of container ships, it is difficult to carry a large number of vehicles at one time because they are mixed with daily necessities and groceries. Additionally, transport quality needs to be maintained to prevent damage to the vehicle. The connection between people loading and unloading vehicles in containers, unloading and inland transport is also essential.