Shipping logistics has always been an important link in textile foreign trade, and shipping prices also directly affect profits.
When some emergencies occur, such as the peak of the previous public health incident, the shipping cost changes almost every day, which has caused a huge impact on textile companies.
Today, freight forwarders warn customers that the demand for Asia-Europe shipping is beginning to show a trend similar to the peak of the epidemic.
Shipping companies are implementing peak season surcharges and GRIs for "long-term and short-term contracts", and Hapag-Lloyd, Mediterranean Shipping and CMA CGM have all announced an increase in shipping costs from the Far East to Europe. However, a British freight forwarder revealed that the freight rates announced by shipping companies were quickly withdrawn because they were replaced by higher prices.
In addition, freight forwarders also mentioned that due to market tensions and adjustments in shipping company strategies, many shipping companies have closed the booking mechanism for FAK and spot space, and will not reopen until June or later. This means that even if you are willing to pay higher freight rates, you may not be able to book space in time, which further exacerbates the tension in the freight market.
Unrelated routes have also been affected, such as the Asia-Latin America route, where freight rates have risen sharply, now at $9,000 to $10,000 per 40 feet, and capacity is being transferred to more profitable routes.
In addition, the rate levels of contracts and spot cargoes have begun to diverge, with long-term contract rates far different from short-term rates, and some differences even exceed $3,000 per 40 feet DC. Shipping companies are increasingly prioritizing and loading higher-revenue cargoes to alleviate the dismal financial performance in the fourth quarter of 23 and, to a certain extent, the mediocre performance in the first quarter of 24.
Part of the problem also stems from a shortage of containers. Container Xchange customers said that although inventory levels have not put significant pressure on warehouses, container prices are "continuously climbing, adjusted approximately every 48 hours." This is mainly due to uncertainties related to the situation in the Red Sea and suppliers and sellers wanting to hedge risks.
The price of a 40-foot container has climbed from $2,200-2,300 in April to the current $2,500-2,700. The detour around the Cape of Good Hope absorbed a "considerable number" of containers, and a considerable number of containers were stranded there. Due to the high transportation costs, relatively low storage costs and the fact that the containers themselves are nearing their service life, it may not be feasible from an economic point of view to ship these containers out.
Due to high inflation in Europe and the United States and the uncertainty of the global geopolitical situation, freight prices have been rising again and again, but it seems that there is still no end in sight in the short term.
In recent years, the profits of textile foreign trade have long been different from the past, even in the developed European and American markets.
On the one hand, due to the global economic environment, most European and American countries are in a serious inflationary environment, the purchasing power of residents has declined, and foreign trade customers have repeatedly lowered prices; on the other hand, a large number of textile companies have focused on developing the foreign trade market in recent years, and overseas customers have also compared prices, and competition in the foreign trade market has intensified.
The surge in freight rates will inevitably further compress the already relatively meager profits of textile companies, and at the same time aggravate the inflation level in the overseas consumer market, but this situation may become the norm for some time in the future.
