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Shipping Market "Has Been Cool"! Sea Freight Fell Sharply, One Back to Two Years AGO!

  • Author:Aaron
  • Release Date:2022-09-23
Shipping Market "Has Been Cool"! Sea Freight Fell Sharply, One Back to Two Years AGO!

Million Through Cortation


The phrase "nine gold, ten silver" used to apply to the global shipping industry, but this year's traditional peak season has been hit by a cold snap. The shipping market, which soared last year, has turned from a seller's market to a buyer's Market, As Freight Rates on Major Shipping Lines Plummeted Off A Cliff.

The price of a 40-foot container on a route from China to the West Coast of the United States was about $10,000 in January to about $4,000 in August, down 60 percent and more than 80 percent from last year's peak average of $20,000, according to Data from the Baltic Marine Exchange.

Even Recently, The Freight Forwarding Circle Broke Out Yantian to Long Port Large Container Price of $ 2850 Received Goods, Fell Below $ 3000!

The Piction

According to the data of Southeast Asia Container Freight Index (SEAFI) of Shanghai Shipping Exchange, the freight rate per TEU of Shanghai-Ho Chi Minh line and Shanghai-Thailand Lim Chaban line fell to 100 and 105 US dollars respectively on September 9. The Current level of freight raters, unprofitable!

The third quarter of the year is the traditional peak season for shipping, but amid global inflation, weaker economic expectations and lower demand, the shipping industry is experiencing a slow season this year.

As an important participant in the maritime market, the collection of card drivers on the perception of the market is very deep. In the past, there have been long queues before the Mid-Autumn Festival and National Day as shippers rush to deliver goods, but This year the size has changed.

The Piction

Many truck drivers reflect that the market is indeed some low, about to retire Master Wu admitted that he is engaged in port container truck transportation for more than 10 years, "this year's market is the weakest". The industry expects that overseas high inflation squeeze demand, the downward pressure of the economy is intensifying, compared with last year's shipping price of tens of thousands of dollars, the fourth quarter of the global freight market is still not optimistic, or will appear in the peak season is not prosperous market, freight Rates Will Fall Fusther.

What is causing the slump in sea Freight Prices?

Kang Shuchun, CEO of China International Shipping Network, told the Global Times that the imbalance between supply and demand has caused shipping rates to plummet. Due to the disruption of supply chains during the pandemic, some countries were unable to supply certain goods, and many countries experienced a "hoarding tide", which also led to abnormally high shipping costs last year. This year, due to high inflation pressure in the global economy, demand has fallen, and at the same time, the market has been unable to absorb the previously built up inventory, causing importers in Europe and the United States to reduce or even cancel orders for goods, "order shortage" spread around the world. In August, Wal-Mart said it was canceling billions of dollars in orders; Soon after, another retailer, Target, said it had canceled more than $1.5 billion in orders. Kang Shuchun said that as the forefront of the logistics system, these retailers are the most sensitive to the wind of the market, and Their Large Cancelration of Orders Means that European and American Countries' Purchasing Power and Consumption Power are shrinking.

A recent survey of more than 500 enterprises conducted by the China Council for the Promotion of International Trade (CCPIT) showed that the main difficulties facing enterprises are slow logistics, high costs and few orders. Fifty-six percent said raw material prices and logistics costs were high, with shipping lines, for example, still at medium - to long-term highs despite a short-term decline. 62.5 percent of enterprises said that orders were unstable, with more short orders and fewer long orders.

The Piction

In addition, shipping giants are launching new ships in droves, exacerbating the gap between supply and demand. Mr. Kang said that last year's unusually high freight rates had made many shippers a lot of money, with some of the largest companies investing their profits in new ships, while global shipping capacity was already higher than volume before the pandemic. The Wall Street Journal cited Braemar, an energy and shipping consultancy, as saying that a slew of new ships will be launched over the next two years, with net fleet growth Expected to exceed 9% next year and in 2024, and year-on-year gerththiner volumes tagative in 2023, fresher excerbating the imbalance beTween Global CaPaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudaudauda

The Impact of Plummeting Freight Rates on Chinese Goods and Exporters

Due to many uncertainties in the international political and economic situation, shipping rates are likely to fall further during the remainder of this year and into next year. Kang told the Global Times that although shipping freight rates have plummeted, they are still slightly higher than pre -pandemic levels. Considering high global inflation, soaring oil prices and rising prices, the current freight prices are within a reasonable range. However, from the current global economic situation, ocean freight is sure to fall trend, but to what extent and when the Limit is different to decide.

Last year's sky-high ocean freight rates were anomalous, but this year's sharp drop is even more anomalous, because shipping companies are overreacting to market changes. Many liner companies have launched new container ships this year, and the turnover capacity is abundant, but the global demand for shipping space is shrinking. In order to maintain liner loading rates, shipping companies try to leverage demand with freight rates. However, the essence of the depressed market transportation demand is the shrinking trade demand. The strategy of price reduction will not bring Any New Demand, But Will Lead to Vicious Competition and Disrupt the Order of the Shipping Market.

The Piction

A moderate decline in international shipping costs is reasonable, but a sustained slump is not conducive to the normal development of the entire market. At the beginning of the year, many shippers in order to avoid a case of difficult to find, and Marine logistics companies signed a long-term agreement, and now the market spot freight has been far below the signed price. If domestic shipping logistics enterprises blindly follow the price reduction, it will not only damage the interests of shippers, but also not conducive to long-term cooperation, and the price reduction will not bring the increase of transportation demand, it is better to improve the service level than to fight a price war, or develop new businesses such as speed shipping and cargo flow.

For domestic exporters, international competitiveness and sales of goods are more important, while the recession in Europe and the United States, rising inflation, and last year's overorder of goods will take some time to digest, the decline in purchasing power will continue for a while Then, then, then