In recent weeks, the sharp correction in shipping prices from China to the United States has attracted market attention. The correction in shipping prices has brought hope to many small and medium-sized foreign trade enterprises that have suffered from skyrocketing freight prices.
According to reports, an executive of a Shanghai-based freight company said that in the past four days, the freight cost of shipping a 40-foot standard container from China to the West Coast of the United States has increased from about US$15,000 to US$15,000. That dropped to just over $8,000, a drop of nearly half, while shipping to the East Coast fell by more than a quarter, from more than $20,000 to less than $15,000.
Freight forwarders sell off shipping space, causing freight rates to fall
Some analysts say , shipping costs between China and the United States have fallen sharply. The reason is that the off-season is approaching and China’s manufacturing production capacity has declined, and “speculators” are eager to sell the accumulated shipping space.
The sea freight before the epidemic was usually US$1,500-2,000. U.S. consumers are shopping hard for durable goods including fitness equipment and furniture due to stay-at-home restrictions. At the same time, a global shortage of container supplies and severe congestion at various ports have led to soaring shipping rates and speculation by scalpers.
As the supply chain crisis intensifies, leading global shipping companies such as CMA CGM, Maersk, Hapag-Lloyd, and OceanNet have successively announced the suspension of spot freight rate increases, but There is no indication that the price will be reduced.
According to a previous report by China Economic Weekly, as containers flow into the market, middlemen continue to change hands and push up container prices. For a container to actually reach the enterprise terminal, it must go through at least three or four middlemen to raise the price.
Reporters pointed out that in addition, as production restrictions began to be implemented, corporate production capacity decreased and transportation demand fell. Freight forwarders have sold off their accumulated containers, causing freight rates to fall.
According to the Baltic Freight Index (FBX) (including surcharges), the spot freight rate from Asia to the United States fell to US$13,025/FEU last Friday, although it was still the same level as last year. 3.4 times futures freight, but a 37% decrease from FBX’s historical high of $20,586/FEU on September 15.
The Asia-US East freight rate shown by the FBX index last Friday was US$19,392/FEU, a 13% decrease from the record high of US$22,289/FEU set on September 15. .
From September 14 to October 8, daily assessment in US dollars per FEU blue line = Asia-US West Green line = Asia-US East:
Drewry’s assessment data last Thursday showed that freight rates also fell, but the fall was much slower than the FBX index.
The rate from Shanghai to Los Angeles is US$11,173/FEU, down 10% from the high point on September 23,
The Shanghai-New York rate is $15,110/FEU, down 6% from the high on September 16.
Weekly assessment in dollars per FEU. Blue Line=Shanghai-New York Green Line=Asia-Western America:
Spot freight is different from long-term freight. An analyst at Tianfeng Securities said long-term freight rates are often set by shipping companies, but spot freight rates are actual market prices determined by supply and demand.
Many long-term rates listed on the Shanghai Shipping Exchange for shipping a 40-foot container from China to the United States are below $5,000, well below spot prices.
Expert: It is too early for the container shipping market to enter the adjustment period
China’s Golden Week holiday provides a rare moment of relaxation for freight companies serving trans-Pacific routes, but it is too early to tell whether freight rates have entered a period of adjustment.
As Chinese manufacturers have reduced production, weakening market demand has led to a decline in freight rates on some routes. But Shifl said that the reduction in Chinese factory output means that manufacturing orders in the United States and the European Union cannot be completed on time, and there will be a backlog of orders, and inventory shortages and price increases will become more obvious.
And congestion remains, with recent signs of spreading from North America to Europe. On the U.S. West Coast, reduced Chinese exports have eased congestion at the ports of Long Beach and Los Angeles, but ships are still waiting at berth for up to two weeks.
In addition, the latest report from the National Retail Federation (NRF) shows that the volume of imported boxes into the United States in October may remain at a near-record level. </p
