How to view the continuous decline of sea freight prices

According to public data, the latest Shanghai Export container composite freight Index released by the Shanghai Shipping Exchange was 2562.12 points, down 10% from the previous period, and has been falling for 13 consecutive weeks. In addition, the Drury World Container Rate index has fallen for 28 consecutive weeks and the Baltic Dry index is now at its lowest level in almost two years.

Generally speaking, the third quarter is the traditional peak season for global maritime container transportation, and sea freight prices will also "rise". Why did the sea freight prices not rise seasonally, but show a rare continuous decline this year? For once suffered from "a box of difficult" for China's foreign trade enterprises, this decline will be a good news to reduce import and export logistics costs?

Whether it is good, not only to see what is the real reason for the decline in sea freight, but also a comprehensive consideration of the extent of its decline, only moderate decline in freight rates, is conducive to the removal of the global shipping market "empty fire".

Since this year, the global container shipping market overall lasted since the second half of last year, container shipping prices earlier this year began after shock wave peak, especially the parts of high inflation, the European and American countries geopolitical conflict, superposition outbreak continues to spread and so on factors, the global shipping market demand shrunk dramatically. In addition, the imbalance of international capacity allocation and the decline of orders in the shipbuilding market have also had a certain impact on maritime prices.

It should be pointed out that this round of shipping prices continued to fall, in a sense, it is also a periodic correction of last year's "abnormally high" shipping prices, which is conducive to pulling the soaring freight rates back to a relatively reasonable price level. That is to say, at present, the moderate decline of international maritime prices is reasonable, but the continuous plunge or even the cliff drop is not conducive to the healthy development of the entire shipping market. Although the proportion of shipping cost in the whole foreign trade cost is not the highest, the drastic fluctuation of freight will inevitably be transmitted to the foreign trade market, and then affect the smooth operation of the whole foreign trade industrial chain and supply chain.

Sea freight slump for foreign trade impact geometry, it is too early to draw conclusions. On the surface, the shipping market contraction is the direct cause of the plunge in sea freight, but the underlying reason is the change of the external demand market. Compared with the explosive growth of the container shipping market last year, the growth rate of the market has declined in the first half of this year, but the overall container shipping trade volume is still at a high level in the market. However, since the third quarter, the inflationary pressure in Europe and the United States has continued to increase, leading to a continuous decline in market demand. In addition, a large amount of inventory has yet to be digested, many importers have to reduce or even cancel orders for goods, and the future "order shortage" may be further highlighted.