Since the beginning of this year, soaring upstream raw material prices and shipping prices have been two big mountains weighing on foreign trade companies. Under the influence of power cuts, the tightening of production capacity means that the volume of export goods will decrease. In August and September this year, the freight rates between China and the United States rose sharply. The freight rate from Asia to the West of the United States exceeded US$20,000 per 40-foot container. Many merchants reduced or even suspended their exports. Beginning at the end of September, China-US ocean freight rates have fallen. The latest Global-Baltic Container Freight Index (FBX) shows that the Asia-Western United States Freight Index has dropped from a price of more than US$20,000/FEU (read “US$20,000 per 40-foot container”) in mid-to-early September to US$17,377. /FEU.
Analyze from two factors, domestic and international. In terms of domestic factors, power and production restrictions may be a reason for the decline in freight rates. Recently, coastal provinces with a large export share have successively introduced power restriction policies. For relevant export companies, under the condition of limited power consumption, production capacity will inevitably be affected, and shipments may decrease. Therefore, the demand for shipping is also It’s alleviated. In addition, the National Day holiday is also a seasonal factor for the decline in freight rates.
From the perspective of international factors, in mid-September, many shipping companies, including CMA CGM, announced the freezing of freight rates, which is conducive to the stability of global shipping prices to a certain extent. At the same time, Mason’s shipping prices have also been adjusted across the board and dropped sharply. Under the background of the domestic electricity curtailment policy, shipping companies expected a decline in shipments. In order to ensure that their company’s containers are fully loaded, there has been a phenomenon of reducing prices to attract volume. In addition, container freight rates are now divided into a primary market and a secondary market. The recent drop in shipping prices is also affected by the decline in freight forwarding quotes speculated in the secondary market.
However, foreign trade companies do not seem to take advantage of the lower prices to ship large quantities, but are on the sidelines. In the later period, the shipping price trend of China-U.S. routes is expected to achieve a steady decline. The short-term and long-term disturbance factors mainly include the increase and decrease of two-way freight volume, the difference in trade varieties and structural changes, the changes in demand for containers, and the changes in the epidemic on the progress of port operations and ocean shipping. The impact of capacity, etc.
—-WRITTEN BY:AMBER CHEN
Post time: Oct-15-2021
