China’s Shipping Costs are Dropping. The growth rate of China’s foreign trade in the first seven months has recovered to double digits. The continuous decline of international freight rates has also benefited the next foreign trade shipments. However, it also reflects the indisputable fact that the global market is weak.
According to the data from Shanghai Shipping Exchange, on August 5, 2022, the freight rate index of Shanghai’s export containers was 3739.72. It was down 148.13 from the previous period, with a weekly drop of 3.8%. And also it was an increase of 1.02% over the previous period. This is the eighth consecutive week that the index fell. As a result, it hit a new low since July last year.
China’s shipping costs continue to drop as shipping companies long for businesses
The market is out of stock. Now shipping companies are scrambling for goods and competing for prices.
According to China’s export container freight rate index, in July 2022, the index of Mediterranean, US West, US East and Japanese routes decreased by 2.8%, 3.5%, 1.8% and 1.9% respectively compared with the previous month.
According to the FBX global container freight index launched by the Baltic Sea Shipping Exchange and freighto, as of August 3, 2022, the shipping price from China / East Asia to the west coast of North America was US $6632 / feu (40 foot standard container), while the shipping price from China / East Asia to the east coast of North America was US $9885 / feu. The shipping price from China / East Asia to northern Europe is US $10463 / feu, and the shipping price from China / East Asia to the Mediterranean is US $10649 / feu.
Among them, since May 20, 2022, the shipping price from China / East Asia to the west coast of North America after the end of the rebound has dropped from US $13698 / feu to US $6632 / feu, a drop of more than 50%.
European airlines are affected by the port strike, and the prices are still high recently. The price of Southeast Asian airlines has dropped from the highest of 2000+ US dollars to 600+ US dollars or even lower. Honestly, it basically returned to the state before the epidemic.
Unlike the previous trend of high-level oscillation, in the past 8 weeks, the overall freight rate has shown a one-way downward trend. Unfortunately, there is still room for further downward movement.
The global market is weak, and foreign trade shows differentiation
The current dull situation is mainly due to the fact that these months are not the peak season for shipment. In addition, due to the impact of the previous epidemic, the orders in the second quarter were reduced. In addition, the demand for shipment is less now. With the arrival of the shipping season after September, this situation will likely change.
Although the freight rate has dropped to the same level as that in June 2021, it is still several times higher than the US $1395 in August 2019. After all, the shipping industry experienced a long recession before the outbreak ushered in a historic boom.
Compare to the first half of the year, China’s import and export in the first seven months have accelerated. Among these, foreign trade as a whole has shown a recovery trend. Against the background of controllable ‘order outflow’, many products continued to maintain double-digit growth in the first seven months.For example, the mechanical and electrical products and labor-intensive products.
Traditional labor-intensive products or the previously hot ‘residential economy’ categories face greater challenges. However, the export of new energy equipment, lithium batteries, electric vehicles and other categories grows rapidly. Furthermore, they are playing a greater role in promoting China’s foreign trade. At the same time, overseas travel is recovering. As a result, it increases the demand for camping and outdoor sports products such as tents Eventually,it will bring opportunities to Chinese foreign trade enterprises.
While China’s shipping costs are dropping, it’s a great opportunity to develop business in China. Let Deep Digital China help you make a solid plan for that!