Financial reports released by a number of shipping companies show that the industry's performance in the first six months is still generally bright. However, from the perspective of the capital market, share prices have fallen significantly from their previous highs. Shares of Taiwan's two shipping giants Evergreen and Yangming are down more than 50% from their 52-week highs.

Behind the decline in shipping prices is a change in the supply and demand of global capacity. On the one hand, the confusion in port operation has been alleviated and the carrying efficiency of ships has been improved; on the other hand, due to the influence of inflation, international trade is expected to weaken, and compared with the decline in shipping prices, many foreign trade enterprises are more worried about "looking for orders."

Looking forward to the next two years, many people in the industry are pessimistic about the trend of freight rates due to the increasing expectations of the global economic recession and the sharp increase in the launching capacity of new ships.

Shipping prices have fallen as a whole, which has lasted for more than half a year.

Recalling the madness of "one case hard to get" in the shipping market in 2021, Xiao Ai, a shipping agent salesman, is still impressed.

"at that time, more than US $20,000 was normal, and we came into contact with a maximum of US $40,000 or US $50,000, and there was a lot of speculation among middlemen. However, affected by the epidemic, there are not many routes, and the seller has a large volume of shipments, so there is nothing we can do about it. Xiao Ai sighed that at present, it is no longer "goods looking for ships", but "ships looking for goods", and changes in supply and demand have led to a drop in freight rates.

Halfway through 2022, seaborne prices experienced a rare sustained correction. The reporter saw in a freight forwarder group that the price of a 40-foot high cabinet from Shanghai to San Francisco was as low as $6596, a far cry from the high point of tens of thousands of dollars. A number of employees said in an interview that the market is most worried about the problem of freight volume, in the case of a steady increase in capacity, the relative shortage of cargo volume led to a reduction in seaborne freight rates is obvious. Many container freight drivers also reflect that the market is somewhat cold, "it takes a lot of courage to invest in new cars."

Zhong Zhichao, founder and CEO of first Shipping (CEO), told the Securities Times: "the global freight index has recorded a continuous decline in the past six months, which is extremely rare in the industry for a long time and by a large margin. Take Shanghai to Meixi as an example, it has dropped from more than 9000 US dollars before and after the Spring Festival to more than 7000 US dollars, and it will soon reach the prefix'6'. "in order to overcome the decline, many shipping companies have cancelled their shifts, but the effect is not very obvious.

The composite freight rate index of Shanghai export containers was 4074.7 points on July 15, down more than 20 per cent from the beginning of the year, according to the Shanghai Shipping Exchange. Among them, the market freight rate (maritime and maritime surcharge) for exports from Shanghai Port to the basic port of the United States is US $6883 / FEU, while the price is US $7860 / FEU,3 on April 15th, a monthly decline of more than 12%.

Shipping prices from Asia to the US fell more than 13 per cent year-on-year at the end of the first half of the year, the first annual decline since the first half of 2020, according to a report released this month by Freightos, a global online freight booking platform. In the second quarter, freight rates from Asia to the United States and West have fallen by more than 50% from their highs.

In terms of major routes, only transatlantic rates are higher than at the beginning of the year. According to the report, freight rates from Europe to the eastern United States rose more than 42% year-on-year, about four times what they were before the epidemic. Prices in Asia to northern Europe have been relatively stable since may, mainly limited by worsening port congestion, but down nearly 30 per cent from the start of the year.

The performance of the shipping company is still bright.But the stock price retreated obviously.

It is worth noting that the high freight rates loosened in the first half of the year, but as they are still operating at high levels, the performance forecasts of the shipping giants are still bright.

Recently, a number of shipping companies issued financial performance forecasts, the performance generally maintained growth. COSCO Shipping Holdings expects to make a net profit of about 64.716 billion yuan in the first half of the year, an increase of about 74.45% over the same period last year. China Merchants Shipping is expected to make a profit of 2.74 billion yuan to 3.028 billion yuan in the first half, an increase of 95% to 116% over the same period last year. In Taiwan, China, Changrong Shipping's cumulative first-half revenue reached NT $345.833 billion, an increase of 82.09% over the same period last year, the best performance in history. Yangming Shipping earned NT $216.151 billion in the first half, an increase of 59.4% over the same period last year.

With regard to the operating situation in the first half of the year, China Merchants Steamship said that although the dry bulk and container shipping market in the first half of the year was impacted by factors such as the COVID-19 epidemic, the war between Russia and Ukraine, and the increase in US dollar interest rates, it still maintained a high level of prosperity. The company's dry bulk fleet has accurate market judgment, reasonable layout, excellent operation, significantly increased profit contribution, and outperformed the market index; the high shock of the container market in the Asian region further reflects the excellent operating ability of the company's container fleet, and the profit contribution continues to rise sharply compared with the same period last year.

However, behind the financial report, there is a "hidden worry" about the decline in transport volume in the shipping industry, and the share price of shipping companies has retreated sharply from the high point. Orient Overseas, a Hong Kong stock, reported that the company's total revenue rose 61% in the first half of the year, but the total carrying capacity decreased by 7.4% compared with the same period last year; the carrying capacity decreased by 6.3%, and the overall carrying rate decreased by 1.1% compared with the same period in 2021.

In terms of the capital market, the reporter found that the share prices of listed shipping companies showed a downward trend for most of the past half a year. Yangming Shipping and Evergreen Shipping have fallen by more than 50% compared with 52 weeks.

The operation efficiency of the wharf has improved, and the throughput of the port in the United States and West has increased.

More than half of July, the world's major ports have released the first half of the operation data.

In China, although the epidemic spread in the first half of the year, the container throughput of some ports still achieved steady growth. Among them, the cargo throughput of Shandong port exceeded 800 million tons in June, an increase of 6.2 percent over the same period last year, and the container throughput exceeded 18 million TEUs, an increase of 8.4 percent over the same period last year. According to the data released by Yantian Port Group, in the first half of this year, the total container throughput of Yantian Port area reached 6.921 million TEUs, an increase of 6.71% over the same period last year.

Overseas, the "Global Port tracking report" released by the American Retail Federation and the Hackett Association shows that monitored US ports handled 2.4 million TEUs of containers in May, an increase of 6% from the previous month and 2.7% from the same period last year, setting a record since data were available in 2002. The figure for June is expected to be 2.25 million TEUs, up 4.8 per cent from a year earlier. The total volume in the first half of the year is expected to be 13.5 million TEUs, an increase of 5.4 per cent over the same period last year.

Last week, the two major ports of Los Angeles and long Beach in the western United States also released container throughput data for the first half of the year. In June, the container throughput of long Beach Port reached 835400 TEUs, up 15.3 per cent from a year earlier and surpassing the record figure of 83000 TEUs in June 2018. Of this total, imports were 415700 TEUs, up 16.4 percent from the same period last year, while exports fell 1.4 percent to 115300 TEUs, and the number of empty containers was 304000 TEUs, up 21.6 percent from the same period last year. In the first half of the year, the container throughput of long Beach Port reached 5.008 million TEUs, an increase of 5.3% over the same period last year. The number of containers in the second quarter reached 2.547 million TEUs, exceeding the record of 86000 TEUs in the previous quarter.

Gene Seroka, chief executive of the Los Angeles port, said longshoremen were significantly more efficient and the number of ships waiting at the port had shrunk by 75 per cent. Even with high inflation and rising inventories, the company expects freight volumes to remain strong in the second half of the year. Data show that the container throughput of the port of Los Angeles reached 876600 TEUs in June, breaking the June data record of the port's 115-year history. In the first half of the year, the port operated 5.4 million TEUs, equaling the record for the same period last year.

The Global Port tracking report predicts that due to the high base in the second half of 2021, the container throughput of US ports is expected to decline in the second half of this year compared with the same period last year, but still at an all-time high. The container throughput of US monitored ports is expected to reach 2.31 million TEUs in July, up 5.3 per cent from a year earlier, 2.26 million TEUs in August, down 0.5 per cent from a year earlier, 2.12 million TEUs in September, down 0.8 per cent from a year earlier, and 2.12 million TEUs in October, down 4.1 per cent from a year earlier, and 2.06 million TEUs in November, down 2.5 per cent from a year earlier.

Workers in multinational port industry chain go on strike again as the shadow continues.

It is worth noting that while the degree of confusion in the operation of the terminal has been alleviated, the labor welfare negotiations on the terminal industry chain have been "cloudy" for a long time.

In June, an eight-day strike by South Korean truck workers attracted global attention and dealt a heavy blow to South Korea's domestic economy. On July 13, local time, some drivers in the Los Angeles area announced a strike to protest the AB5 bill, while some drivers in the Oakland area planned to go on strike on Monday, echoing the Los Angeles drivers' protest.

It is reported that the AB5 Act requires temporary contract workers to be included in the formal employment of employers, which undoubtedly has a huge impact on many companies that rely on the gig economy and even the California economy. For example, the business costs of such enterprises (minimum wage, insurance, leave, employee benefits, etc.), which further affect the employee management mechanism and pricing mechanism of such companies; independent contractors will also lose flexible working hours. Bound by the "9-to-5" working system. Many workers who support the bill say they are losing their benefits because of status issues.

Jonathan Gold, vice president of the American Retail Association, said earlier that supply chain challenges would continue throughout the year and that it was crucial for workers and management on the West Coast to reach an agreement.

In Germany, longshoremen staged a 48-hour strike last Thursday after wage negotiations with their employers stalled. The strike of 12000 port workers paralyzed operations at major container hub ports such as Hamburg, Bremen and William, the third and longest strike in an increasingly fierce wage dispute and the longest in Germany in more than 40 years.

Chen Zhen, a mid-term futures researcher at founder, believes that with the announcement of the lifting of the seal in Shanghai on June 1, the number of liner ships from China to the United States and the West have rebounded in July. Drivers in Los Angeles and Oakland announced strikes, which will affect the operational efficiency of the supply chain and reduce ship turnover efficiency. The German Dockers' strike will adversely affect the liner network and exacerbate the long-standing supply chain congestion of the Nordic container hub. However, with the decline of ship turnover efficiency, the declining Asian and European markets can play a supporting role for the time being.

The industry says freight rates are supported in the short term.But the prospect is bleak.

For the future trend of freight rates, a number of industry insiders said that as the third quarter is the peak period of foreign trade shipments, the freight rate index will be partially supported. However, in view of the increased expectations of the global recession, the increased operational efficiency of ships and the concentrated launching of new ships in the next two years, there is a risk that high freight rates in the medium to long term are difficult to maintain in the shipping industry.

The second half of the year, August to October is the peak of foreign trade market shipments, the shipping market may be better than the first half of the year, but the increase should not be very large. Chen Zhen said in an interview with the Securities Times that in the face of high inflation, the Federal Reserve tightens monetary policy, the European Central Bank is likely to follow, and there is greater downward pressure on the economies of Europe and the United States. if the unemployment rate rises, the actual disposable income of residents will decline, which will further affect consumer confidence and demand, and foreign trade freight volume is bound to decrease.

Shi Suoren, chief executive of Maersk, pointed out in June that after two years of most headlines, there could be a bullwhip effect of shrinking demand and increased supply in the coming months, and the container boom could reverse as soon as August.

In the long run, the more severe test is the increase in the launching of a large number of new ships. The report "Annual Review and Forecast of Container Census and Leasing" released by shipping consultancy Drury (Drewry) on the 13th of this month pointed out that in 2021, the global container volume increased by 13% to nearly 50 million TEUs, which is three times the previous growth trend, and the global container surplus is estimated to reach about 6 million TEUs.

John Fauci, director of container equipment research at Drury, said the global delivery of new ships remained strong, with space capacity expected to increase by 3.6 million TEUs in 2023 and more than 3.9 million TEUs in 2024.

"the market may have been overconfident in the industry earlier. Zhong Zhe-Chao believes that under the current situation that new ships have not been launched, shipping companies have begun to step up their efforts to stop shipping, but there has been little effect in stopping the decline in freight rates. If new ships are centrally launched in the next two or three years, too much new capacity in the market may be the biggest test in the industry, and the consequences can be imagined.