As the epidemic situation improves, the market has gradually returned to normality. In addition to the continued decline in shipping prices on major European and American routes, the doubling of container trailer freight rates due to the epidemic in April and May has also disappeared, and freight rates have basically fallen. Since mid-June, freight rates on some routes in the Yangtze River Delta region have even been lower than previous normal levels.
However, affected by the global environment such as the epidemic, inflation, and strikes, the additional costs caused by the current unstable shipping schedule have increased, increasing the pressure on freight forwarders. The sluggish foreign trade environment has also led to a substantial shrinkage in freight forwarding business, making it difficult to develop new customers and increasing competition. fierce.
Freight rates on European and American routes continue to fall
The person in charge of an export order said that judging from the shipping quotes provided by several freight forwarders in the past half month, freight rates on the East Coast route have begun to fall since the beginning of this year, and freight rates have dropped significantly since May and June. Taking 40-foot high container containers as an example, compared with the beginning of the year, the latest quotations in July have basically dropped by nearly 40%.
In mid-April this year, perhaps due to the impact of the epidemic in some areas, the freight rate on the popular US East route fell by 10% to 20% month-on-month. Some freight forwarders received quotations from shipping companies around 12,000 yuan, and the freight rate on the China-Europe route dropped by nearly 15% to 20 %.
Based on the latest major shipping indexes, due to lower than expected transportation demand, the overall freight rates of major routes such as the US line, European line and the Mediterranean continued to fall.
SCFI and NCFI comprehensive freight indexes have fallen for several consecutive weeks. Major European and American routes continue to decline. Except for the increase in South American freight rates, almost all other routes have plummeted;
Freight rates for WCI’s major routes fell across the board, with weekly declines of 3-5% for the US West, US East, and Mediterranean routes;
The latest Drewry Composite Average Index WCI fell 1% to US$6820.04/FEU, falling for the 21st consecutive week. This period can be said to be a decline across all routes; it fell 24% from the same period last year.
The FBX global comprehensive average freight index continues to decline (1 percentage point). It is particularly worth noting that, except for the slight increase of 0.1% in the Eastern United States, freight rates in the Western United States, Northern Europe, and the Mediterranean continued to decline.
Global shipping giant COSCO Shipping Holdings has previously stated that since the beginning of 2022, the container shipping market has continued the overall trend of operating at a high level in 2021, and demand still has a certain degree of elasticity. The continued congestion of global ports has put pressure on the supply of effective shipping capacity.
The tense relationship between market supply and demand is unlikely to be significantly improved in the first half of 2022, and the short-term market outlook remains cautiously optimistic. Under this expectation, the market pattern of supply exceeding demand will support the market freight rate to continue to remain high in 2022.
As the epidemic situation improves, high-speed entry and exit in the Yangtze River Delta region has basically returned to normal, and road transportation prices have also dropped significantly.
Previously, the freight rate for shipping bulk cargo from Shanghai to Chizhou, Anhui Province was around 1,800 yuan. During the epidemic in April and May, the price for this route rose to 2,500 to 3,000 yuan. Since mid-June, bulk freight rates have begun to fall and have now fallen back to 1,400 to 1,500 yuan.
A freight forwarder in the Yangtze River Delta region said, “Although road transportation costs have dropped to normal levels, the additional costs caused by the current unstable shipping schedule have increased.”
The emergence of additional costs during the epidemic was not frequent and occurred individually, but it has now become normal. Each additional cost ranges from 300 yuan to 3,000 to 4,000 yuan, which continues to increase the pressure on freight forwarders.
It is difficult to develop new customers in foreign trade, so we should focus on marketing old customers.
Also affected by the epidemic are foreign trade companies. The epidemic has boosted the shipping market, but it has also accelerated the survival of the fittest in the foreign trade market and freight forwarding market.
Many freight forwarders said that the situation of seaborne exports this year is not very good. Some previously backlogged orders are currently being issued, and the demand from foreign customers is not as strong as last year. “Affected by multiple factors such as the epidemic, inflation, and reduced demand for foreign goods, The overall impact is not as crazy as the previous two years.”
However, as the epidemic situation improves, factory production capacity and export volume in the Yangtze River Delta region have basically returned to normal levels, basically the same as the same period in previous years. Some of the factories are still processing the previous backlog of orders recently.
In addition, many foreign trade leaders also said that it is difficult to expand new overseas customers in the near future. “The focus now is whether the original customers can be retained and we should work hard to increase the order volume of a single old customer. The possibility of expanding new customers is very low at the moment.”
Before the epidemic, customers could come to China to visit factories, and we could go abroad to visit customers. Now due to the epidemic, these normal processes cannot be carried out, resulting in customers canceling orders.
Under the impact of the epidemic, Shanghai, the Yangtze River Delta and even the whole country have been affected to a certain extent. In response, various localities have introduced highly targeted policies to support the development of foreign trade and stabilize the economic market.
For example, Shanghai’s “50 measures” to revitalize the economy have been launched one after another.
The Shandong tax department has given full play to its tax functions, optimized the foreign trade business environment by implementing detailed tax rebate and tax reduction policies and other measures, helped foreign trade companies relieve difficulties, served the development of the export-oriented economy, and helped stabilize the economic market and foreign trade fundamentals. .
In the first half of this year, the Export-Import Bank of China successivelyA number of relief measures have been implemented to continue to increase the supply of funds in the foreign trade field, reduce fees and provide benefits to foreign trade companies severely affected by the epidemic, and provide support to small and medium-sized enterprises in deferred payments and loan renewals without principal repayment.
Economic defense wars have begun across the country, causing the growth rate of foreign trade imports and exports to rapidly turn from negative to positive.
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