Japan's exports fell for the first time in more than two years as demand in several key overseas markets slumped, data showed on Friday, pointing to heavy headwinds facing the economic recovery. Around Japan, South Korea, Vietnam and other major trading countries in Asia also have bleak export data.
However, in the freight market, a very different scene seems to be present at the moment. The average spot freight rate for a 40-foot standard container shipped from China to the U.S. West Coast rose 61% to $2,075 in the six weeks to Aug. 15, according to shipping data and procurement firm Xeneta.
People in the industry generally said that the main reason for this price increase is that large shipping companies have artificially adjusted prices. Shipping giants such as Maersk and CMA CGM, whose performance is still plummeting, have increased shipping fees such as comprehensive rate surcharges and package rates for some routes.
Kang Shuchun, chairman of the International Freight Forwarding Branch of the China Federation of Logistics and Purchasing, pointed out in an interview with the media that the increase in freight rates is an artificial adjustment by shipping companies. The unilateral price increase by Maersk and other companies will lead to market chaos in the short term and drive up freight rates. , not a market recovery. Is it similar to the current plastic market?
Prior to this round of price hikes, the price of container freight from China to the West Coast of the United States had plummeted from nearly $10,000 per container in February 2022 to below $1,300 in late June, as retailers had excess inventory leading to fewer orders. And weak demand cut into the earnings of big shipping companies.
Peter Sand, chief analyst at Xeneta, pointed out that before the epidemic, the sharp increase in freight rates may have spooked importers. But now, after witnessing last year's high shipping costs, the $2,000 price tag is hardly going to scare them anymore.
A set of historical comparisons shows that container freight rates from China to the West Coast of the United States are still $600 higher than in the same period in 2019, but 66% lower than in the same period last year.
Importers and shipping industry experts expect the recent rise in spot freight rates to be short-lived -- U.S. container imports remain below year-ago levels, while some ocean liners have begun taking delivery of new container ships they ordered at a time of peak demand, possibly Inject additional capacity into the market.
According to the Danish shipping trade organization Bimco, the delivery of new container ships in the first seven months of 2023 is equivalent to an increase in capacity of 1.2 million containers, setting a record.
Ocean shipping giants such as Maersk have reduced supply by taking some container ships out of service and slowing them down, effectively draining capacity. But Philip Damas, managing director of Drewry Shipping Consulting Group, said more containerships were expected to come into service next year.
Damas said, “The wave of excess capacity will definitely affect the global shipping industry. Therefore, we expect to see spot freight rates resume their downward trend this autumn.”
Some shipping lines are currently trying to extract more profit from long-term contracts by adding peak season surcharges, because the fixed freight rates of long-term contracts are often higher than the more volatile spot market. In the past, shipping companies have often employed this strategy in response to strong demand in the autumn and year-end holidays.
