In nearly a week, sea freight rates, which have risen for 15 months in a row, have fallen sharply.

According to the Nippon Keizai Shimbun, an executive at a Shanghai shipping company said that in the past four days, the freight cost of shipping a 40-foot standard container from China to the west coast of the United States has dropped from about $15000 to just over $8000, nearly half, while freight to the east coast has fallen by more than 1/4 from more than $20, 000 to less than $15000.

Some analysts said that the shipping company did not actually announce a price reduction, and freight forwarders at all levels sold space one after another is the main reason for the sharp drop in sea freight rates.

At present, freight rates have fallen in 5 of China's 12 routes, while other routes are still rising. Under the global supply chain crisis, is this freight drop just a "dive"?

Freight forwarder selling space shipping company did not announce a price reduction

The Nippon Keizai Shimbun pointed out that shipping costs between China and the United States have fallen sharply.The reason is that the off-season is nearing a superimposed decline in China's manufacturing capacity, and "speculators" are eager to sell hoarded spot space.

Sea freight before the outbreak is usually between $1500 and $2000. Affected by home restrictions, US consumers are buying large amounts of durable goods, including fitness equipment and furniture, while global container supplies are in short supply and ports are heavily congested, leading to soaring sea freight rates and speculation in scalpers.

With the intensification of the supply chain crisis, France's Dafei, Maersk, Herberot, Ocean Network and other global leading shipping companies have announced the suspension of spot freight increases, but did not say to reduce the price.

Meissen, one of the largest container shipping companies in the United States, said it reported to the Shanghai Shipping Exchange on Oct. 2 that the long-term freight rate for 40-foot containers from China to the west coast was $200 higher than a month ago.

According to a previous report by China Economic Weekly, from the entry of containers into the market, middlemen continue to push up the price of containers, and a container has to go through at least three or four middlemen to raise prices to the enterprise terminal.

The Red Star News pointed out that in addition to that,With the implementation of production restrictions, corporate capacity has declined and transport demand has fallen. Freight forwarders have dumped hoarded containers, leading to a drop in freight rates.

Yang Daqing, an expert member of the China Federation of Logistics and Purchasing, said in an interview with the Red Star Capital Bureau on October 2 that "since August, especially in late September, many provinces and cities have introduced measures to pull and limit electricity under the 'double control of energy consumption'. As a result, the production capacity of production enterprises has decreased, and transport demand has dropped to a certain extent."

Will the sea freight be "diving"?

At present, there are 12 main export routes in China. Compared with the previous period, freight charges for five routes fell, but freight charges for other routes were still rising, with increases of 8.5% for South Korea and 8.1% for Australia and New Zealand, respectively.

Spot freight is different from long-term freight.An analyst at Tianfeng Securities said that long-term freight is often set by shipping companies, but spot freight is the actual market price determined by supply and demand. Many of the long-term rates listed by the Shanghai Shipping Exchange for transporting a 40-foot container from China to the United States are less than $5000, well below the spot price.

Analysts are divided on how shipping charges will develop in the near future.

Analysts at Tianfeng Securities expect freight rates to fall as export growth is expected to slow in the fourth quarter, which is the off-season for seaborne transport.

However, according to a research report by CSC FINANCIAL CO.,LTD, US ports are still crowded and the gap between supply and demand is still large, and shipping rates will remain relatively high for the next two weeks.

Huachuang Transportation also believes that the systemic tension between supply and demand is increasing. The process of supply-side relief will be relatively long. At present, the problem of American wharf and inland turnover is still serious, and the bottleneck of the follow-up supply chain may be aggravated under the influence of repeated epidemic, Dockers, crew and other risk events. The downward inflection point of freight rate may occur only when the demand tends to decline by a large margin. The current round of consolidation demand is driven by the import demand of Europe and the United States, which is still very strong from the perspective of various forward-looking indicators.

At the same time, financial blog Zerohedge also mentioned that although spot freight rates may fall in the next two weeks.But freight rates will be pushed to an all-time high as US retailers place a new round of orders to meet holiday demand.

It is worth mentioning that there are less than two months to go before Black Friday in the United States, and American consumers will start a Christmas shopping spree. But the US retail industry is still threatened by supply chain disruptions.

In order to deal with the shortage in advance, Richard Galanti, chief financial officer of Costco, the largest chain of membership warehouses in the United States, said that he had imposed restrictions on the purchase of some key commodities, such as toilet paper, paper towels, bottled water and high demand for cleaning products.