Shipping prices plunge! Hot airlines drop 22%, 'fever' out?

Column:Industry information Time:2021-10-19
In the third quarter of this year, the shipping price of China to the West of the United States once exceeded $20,000 per 40 feet container, which brings no small pressure to foreign trade enterprises.

In the third quarter of this year, the shipping price of China to the West of the United States once exceeded $20,000 per 40 feet container, which brings no small pressure to foreign trade enterprises.

Shipping rates between China and the US have fallen since the end of September. The latest Global-Baltic Container Freight Index (FBX) shows that the Asia-West America freight index has fallen to $17,377 per FEU from over $20,000 per FEU in early September.

Even freight companies said that the sea freight from Ningbo port, Shanghai port to the West coast of the United States dropped 3 days to 3 months of growth!

The reason behind shipping price reduction?

1. The shipping company did not announce a price cut.

At present, China has 12 main export routes. On a month-on-month basis, freight rates fell on five routes, but others continued to rise, with South Korea and Australia and New Zealand increasing by 8.5% and 8.1% respectively.

The most recent edition of the SCFI index was up 33.50 points on October 8.

Matson Inc., one of the largest container-shipping companies in the United States, said the long-term rates it reported to the Shanghai Shipping Exchange on Oct. 2 for a 40-foot container shipped from China to the West Coast were up $200 from a month earlier.

2, the industry personnel analysis said that the reason for the price or all levels of freight forwarders have to sell shipping space.

The global shortage of container supplies during the pandemic has caused severe congestion at ports, resulting in multiples of sea freight, which has also led to speculation by scalpers.

Industry insiders point out that shipping costs between China and the United States have fallen sharply, because the low season is approaching and China's manufacturing capacity has decreased, and some freight forwarders are worried about the lack of demand for freight rates, so they have lowered prices.

3. China's power rationing policy leads to a reduction in factory capacity and transportation demand.

Since the National Development and Reform Commission announced its dual-control barometer of energy consumption in August, many provinces and cities have introduced power rationing measures, resulting in a reduction in production capacity and a certain decline in transport demand.

Will sea freight prices continue to adjust in the future?

Looking ahead to the fourth quarter, on the one hand, international port congestion, transport capacity tension has not been eased; In addition, considering the impact of risk events such as the recurrence of the epidemic, the subsequent supply chain bottleneck may be aggravated.

It is worth mentioning that with black Friday and Christmas holidays approaching, the retail market demand in Europe and the United States will increase significantly, and the shipping price is likely to remain high in the short term. Only when the trend of demand drops substantially can freight prices turn downward.

At present, there is a serious imbalance between supply and demand of global shipping, and there is no obvious sign of relief of the situation that one container is hard to get. The global trade and transportation is not smooth, which greatly interferes with the ordering and shipping rhythm of enterprise customers. The inventory of enterprises is overstocked, the cost rises sharply, and the profitability decreases obviously.

Subsequently, with the gradual improvement of overseas epidemic and relaxation of prevention and control measures, some orders that had been repatriated to China may also be repatriated to overseas, especially to Southeast Asia.