The latest export container freight index released by the Shanghai Shipping Exchange shows that on September 10, the China Export Container Index (CCFI), which represents the settlement price, closed at 3157.60 points, a record high, an increase of 60.02 points compared with last week. , an increase of 1.9%, a 279% increase from the lowest point of 834 points last year.
Many industry insiders said that as shipping prices continue to hit record highs, risks are also increasing. On the one hand, due to rising freight costs and increased procurement costs, some demand is decreasing; On the one hand, many shipping companies continue to launch new shipbuilding and container building projects. Once supply and demand are broken, there will be a risk of overcapacity.
Therefore, industry insiders also said that although shipping, freight forwarding and other businesses are profitable under the current market conditions, in the long term It is not good for the development of the industry. “It’s like fishing in a dry lake. If all your customers die, where will you make money?”
Shipping prices keep rising Refresh high
Data show that on September 17, the average Shanghai Export Container Comprehensive Index (SCFI) reflecting the spot market was 4622.51 points, an increase of 54.35 points compared with last week. , an increase of 1.2%. It is worth noting that in November last year, SCFI stood above 2,000 points for the first time, broke through the 3,000 point mark at the end of April this year, broke through 4,000 points in mid-July, and is still reaching new highs.
“The reason for the current tense situation is actually a problem of trade structure.” A person engaged in Industry insiders in supply chain management analyzed to a Securities Times reporter, “International shipping serves international trade and is determined by supply and demand. Taking the current situation as an example, our country has recovered relatively well from the epidemic and its production capacity has increased. In the United States, During the epidemic, it had problems in trade, production and other aspects, so it could only import a large amount from China. Especially in the first half of this year, when they started to replenish their inventory, we shipped a large amount of goods there, which broke the original normal. Due to the trade flow or the matching of transportation capacity, a large number of ships are running there, and the ships cannot dock at the dock. The unloaded goods are backlogged at the port. Then, due to the epidemic, their warehouses, trucks, etc. are not turned over in time, and the entire port movement is The capacity is reduced.”
According to customs statistics, my country’s foreign trade monthly import and export has maintained positive growth for 14 consecutive months. In the first seven months of this year, my country’s total foreign trade import and export value was 21.34 trillion yuan, a year-on-year increase of 24.5%. Among them, exports were 11.66 trillion yuan, a year-on-year increase of 24.5%. The demand for foreign trade exports continues to increase, but logistics capacity is limited, so it is “hard to find a cabin” and “a box is hard to find” has further increased.
In short, as the economy recovers from the epidemic, global demand for goods and raw materials has surged, while recurring epidemics have led to global supply chain disruptions, port congestion, and shipping delays. , these factors have limited the available shipping capacity of ocean-going ships.
One container earns 1,000 US dollars
Currently, under the influence of port congestion, the port’s business Volume and profit have been well reflected. In the first half of this year, Shanghai Port made enough money for the whole of last year. Most shipping companies and freight forwarding companies have also made huge profits in recent months.
Chu Xuri, secretary of the board of directors of Zhongchuang Logistics, told a Securities Times reporter that it is normal for freight forwarding profits to double this year, and some have doubled six or seven times. “The price difference this year is quite obvious. How much does it cost to ship to Europe and the United States? As long as you get the space, you can basically earn $1,000 per container. Now one space can be sold for $20,000. But under this situation, the backlog of goods is still serious.”
“The reason why the backlog in the United States is serious is that the ship cannot dock at the port after arriving in the United States, or in some other places Once there is an epidemic on the ship, the local government will require you to stay here for 14 days before allowing you to work on duty. The entire transportation cycle becomes longer, and then it is impossible to unload the goods to the United States. After unloading, it becomes empty and cannot come back, so This leads to tight transportation capacity.” Chu Xuri also pointed out that under the current circumstances, once the U.S. and European terminals become more efficient, there will be excess transportation capacity.
Chu Xuri believes that although the impact of the epidemic is an important reason, shipping prices will definitely remain high regardless of whether the epidemic is controlled or not. When it rises to its peak, it falls. “Now the space you booked is more expensive than your own goods. When it gets there, it’s so expensive that people can’t bear it, and at worst they won’t buy it. There are also industries with pricing power. People may have to pay for the price increase of your products. But this will cause local inflation, and if it continues to rise to a certain level, it cannot be sold, so this freight rate will not be maintained forever.”
Chu Xuri also pointed out that as freight prices rise and transportation cycles lengthen, some small companies that are purely freight forwarders will receive fewer and fewer orders. Although they have made a lot of money through temporary huge profits, they will still be knocked back to their original shape in the long run. . “The ones that have more advantages are large companies that engage in comprehensive business and can make corresponding adjustments in the face of the market environment.”
Many shipping giants have announced a freeze on freight rates
In addition, the aforementioned industry insiders pointed out to reporters that under the current shipping pattern Another deeper reason is oligopoly. “After the last round of economic crisis, a shipbuilding cycle was experienced, which produced a lot of shipping capacity. During that time, the overall freight rate in the international shipping market was relatively low, which also resulted in a large number of consolidations among many shipping companies. Nowadays, several major shipping companies Their transportation capacity occupies a dominant position. This concentration has also resulted in the convergence of their pricing principles, and the market price will be more affected by this.”
“Look at this Some shipping companies have also proposed not to increase prices for some time, because if freight rates continue to rise, trade will be seriously affected. Export costs and procurement costs will increase, and demand will decrease. In order to increase prices, they will eventually kill all customers. If the trade is structurally damaged, it will not be good for them in the long run.”
It is reported that the current abnormally high levels of shipping prices and container prices have caused global regulatory widespread concern from agencies, legislators, and the public. Maritime regulatory agencies from China, the United States and the European Union recently held a global shipping regulatory summit. The meeting discussed a number of high-profile issues, including demand and supply analysis related to international shipping after the epidemic, the current difficulties faced by the shipping industry, the reasons for the impact of the shipping industry, and what possible future measures can bring the shipping industry back on track. etc.
Since then, the world’s largest shipping company Maersk, the third largest shipping company CMA CGM and the fifth largest shipping company Hapag-Lloyd has announced a freeze on freight rates.
French CMA CGM announced that it will freeze spot container freight rates until February 1, 2022. The company said that in the face of an unprecedented situation in the shipping industry, the company places a higher priority on long-term relationships with customers. Since 2021, affected by port congestion and a serious imbalance between demand and effective shipping container capacity, spot freight rates for container transportation have continued to rise.
However, according to reports, industry insiders said that CMA CGM’s freight rates are much higher than most companies, and it will make a lot of money if it can maintain the current freight rates. Since all of the company’s slots for October have been booked, it is meaningless to push for a price increase. In addition, countries have strengthened supervision of freight rates, which is also the main reason why the company decided to freeze freight rates until February 1 next year.
In this regard, CITIC Construction Investment believes that the current spot freight level is already at a historical high, and it is not appropriate to expect the spot freight market to continue to rise. Shipping companies took the initiative to stop increasing spot freight rates, which seemed to damage short-term interests, but actually benefited long-term interests, effectively avoiding the risk of a sharp fall from highs in the later period. At the same time, the recent rising spot freight rates have caused customers to rush to ship goods. Locking in spot prices will compress the profit margins of intermediaries, improve customers’ booking experience, and facilitate the establishment of long-term cooperative relationships.
It is still difficult to predict when shipping prices will cool down
Under strict supervision, leading shipping companies have successively frozen prices , and shipping capacity is constantly expanding, will high-priced sea transportation cool down? Chang Ran, a senior researcher at Zhixin Investment Research Institute, previously said that the surge in shipping prices shows that the current external demand is not too weak, but the trend of shrinking external demand and slowing export momentum is clear. The logic behind the current phenomenon of prosperous shipping is not that the export demand momentum is greater than the elasticity of supply and the shipping price rises, but that the lack of shipping capacity caused by the global epidemic is a drag on exports. Chang Ran said that in the second half of the year, the shipping bottleneck reflected by the surge in shipping prices still exists. The operating capacity of containers, ships and ports is likely to be tight for at least three years in the future, and global shipping capacity shortages will continue to exist.
The Kaiyuan Securities macro research team pointed out that in the past 10 years, as the industry has been sluggish, major container shipping companies have massively reduced capital. Expenditures have led to a sharp decline in the growth center of global container shipping capacity. While the existing shipping capacity is insufficient, the delivery cycle of new ships is at least two years, making the container shipping industry’s production capacity almost inelastic in the next two years. Due to long training cycles and reduced job appeal caused by the superimposed epidemic, the supply shortage of seafarers will further restrict the release of maritime transport capacity. Experience shows that the training and internship time for ordinary seamen and senior seamen require at least 10 months and 2 years respectively. As the epidemic has led to the loss of some seafarers, and the frequent mutations of the virus have greatly reduced the attractiveness of seafarers’ jobs, the loss rate of seafarers, especially senior seafarers, is high around the world, and the gap continues to expand. Said the Kaiyuan Securities macro research team. Taken together, as the large-scale vaccine rollout drives import demand from the United States and Europe to remain high, as well as the serious shortage of new shipping capacity in the industry, the gap in seafarers continues to expand, and the trend of rising oil prices, ocean freight rates may continue to remain high. During the interview, industry insiders also told reporters that there is still no definite consensus in the industry on when freight rates can be reduced, but what is certain is that high prices are increasing risks, and relevant companies should start thinking about the future. </p
