Prices have fallen? Many Ningbo residents are helpless: it’s still too expensive! “The goods have been piled up from the warehouse to the lobby”
2024-08-17
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This article is reproduced from [Ningbo Evening News];
Since the second quarter of this year, the soaring container freight rates are now cooling down.
According to data from the Ningbo Shipping Exchange, the Ningbo Export Container Freight Index (NCFI) has continued to rise since the end of March this year, reaching 2905.4 points on June 28 before peaking and falling back.Six consecutive weeks of declineOn August 9, the index fell to 2437.0 points. On August 16, the index stopped falling and stabilized, up 0.2% from the previous week.Still at a high for the year.
The latest Ningbo export container freight index.
Will this round of reduction in ocean freight rates reduce the anxiety of cargo owners who have goods but cannot ship them out? Will freight rates continue to decline or rebound in the second half of the year?
Some Ningbo foreign trade people and freight forwarders have different opinions on this.
Shippers: Warehouse explosion is still a hot topic
In the second quarter of this year, the global shipping market showed a “not slow season” phenomenon.
Export containers from Ningbo to the Eastern USFreightIt once approached 10,000 US dollars per high cabinet.Freight rates to South America and other places are alsoIt has doubled since the beginning of the year.Some Chinese exporters feel“It’s hard to book a cabin”, and even due to delayed deliveryThe factory is "overwhelmed".
Have these "butterfly effects" been alleviated by the slight decline in freight rates?
The reporter learned during the interview thatThe freight rate reduction in the past month has not had a significant impact on most Ningbo foreign trade factories.
"More than three months ago, due to space constraints, we were unable to ship four containers of goods on time. Fortunately, these goods are finally being shipped out one after another. However, some customers still ask us to postpone shipment. For example, there is a batch of orders from the Middle East that should have been shipped at the end of June.It has been delayed for more than a month and still not sent.It's a bit worrying, and ourWarehouses are still full."Ding Yandong, general manager of Ningbo Ruimanx Door and Window Accessories Co., Ltd., told reporters.
Why would customers delay shipments? Ding Yandong said that like most Chinese exporters, he conducts international trade on the FOB terms, which meansThe shipping cost shall be borne by the buyer.
"After all, freight rates are still high. The price of each high cabinetIt has increased by $1,500 since the beginning of the year.，It is a considerable expense, so customers are on the sidelines. If customers need the goods urgently, we will usually switch to air transport and then bear part of the cost ourselves.”
Coincidentally, Mr. Chen, manager of Ningbo Lemeijia Electric Technology Co., Ltd., has not felt the freight rate drop. His company mainly sells small appliances such as air fryers, which are mainly sold to European and American countries.The warehouse was "exploded" due to customers delaying delivery.
"Now,The goods in our factory have been piled up from the warehouse to the hall, and there is almost no place to walk."We have space now, but the price is high. We have orders, but customers keep asking for price cuts. Some potential customers will send messages, 'crazy hints' that freight costs are still high, and they will bargain accordingly. We don't want to step into the trap of 'price wars', so we simply 'read but don't reply' to these messages."
Is the above-mentioned "warehouse explosion" phenomenon universal? This depends on factors such as the category, market, and customer scale of different foreign trade companies.
A home appliance exporter in Ningbo said that the company mainly cooperates with large European and American brands, and the shipment rhythm is stable with no delays.
Ningbo companies exporting to Southeast Asia and other places said that the local freight rate has not increased much and the impact on shipments is limited.
Cross-border e-commerce sellers have greater autonomy than traditional foreign trade companies, but they are not put in a passive position because of this.
Freight forwarder: Shipping demand affects freight rates
“The ducks know first when the river water warms in spring.”
Ningbo freight forwarders working on the front line of international logistics are more sensitive to changes in freight rates than foreign trade people.
“Freight rates have indeed 'cooled down'.For example, the freight rate from Ningbo to the West Coast of the United States was over $6,000 per high cabinet last month, but is now $4,000 per high cabinet; the freight rate from Ningbo to Europe has also dropped by about $2,000 compared to a month ago. "During the period of falling freight rates, the volume of goods we carry has also shown a certain downward trend," said Tang Xiaoyue, general manager of Ningbo Hermes International Logistics Co., Ltd.
Tang Xiaoyue told reporters that the fluctuation of freight rates is the result of changes in the supply and demand of shipping capacity. The rise in freight rates in the first half of the year was due to factors such as the Red Sea crisis causing ships to detour, the "rush to ship" of new energy products, and the strong demand for replenishing inventories in Europe and the United States. Now, overseas buyers' purchasing demand has slowed down, and some even hold their money and wait and see because they are unwilling to bear high freight rates, which has helped push freight rates down.
Mr. Li, who has been engaged in the international logistics industry in Ningbo for many years, believes thatThe "cooling down" of freight rates is related to changes in shipping demand.Compared with traditional foreign trade practitioners, cross-border e-commerce sellers who bear their own freight will feel the transmission of freight rate fluctuations more intuitively.
"In the first half of the year, the US consumption situation rebounded, and our cross-border e-commerce overseas warehouse logistics orders increased by more than 20% year-on-year. However, at present, the inventory of supermarkets and e-commerce in the United States has been basically replenished, and the basis for supporting the increase in freight rates has decreased. Our first-leg container volume in July fell month-on-month. In the South American market, once the "hype" of large-scale shipments of new energy vehicles and photovoltaic products has passed, the current freight rate has dropped by about US$5,000 per high cabinet."
In the view of industry insiders,July to September is traditionally the peak season for shipping, but this year it may be a “non-peak season”.
Xu Kai, chief information officer of the Shanghai International Shipping Research Center, said in an interview with the media, "The main reason for this wave of decline in shipping freight rates is most likely the shrinking demand for shipping capacity. The global economic stagflation may lead to a reduction in transportation demand, further suppressing the increase in freight rates."
However, several shipping companies have announced that the freight rate for each 40-foot container will be increased by US$1,000 from August 15 to curb the continued downward trend in route freight rates.
Some practitioners believe that this is an attempt by shipping companies to maintain their profit margins, but whether it can be implemented remains to be seen.
Expert: There is no basis for freight rates to rise in the second half of the year
Where will freight rates go in the next few months? How should the industry meet the challenge?
Zhong Zhechao, founder and general manager of Yihangyun, said: "At present, many market factors supporting high freight rates have or are gradually dissipating. The 'rush' for battery car energy storage has faded, and the early peak season is also ending early. At present, the market is still supported by some traditional peak season and previously delayed goods, but this support is not expected to last long."
Le Zhentian, chairman of Zhejiang Tianshili Dragonfly Supply Chain Technology Co., Ltd., believes that "the increase in freight rates since the second quarter of this year is more the result of market self-regulation than the impact of supply and demand.It is expected that there will be no reason for freight rates to fluctuate significantly in the short term.”
When the tide of high freight rates receded, some industry chaos also surfaced.
According to reports from the China Times and other media, since the beginning of this year, some freight forwarding companies have attracted customers with the "double clearance and tax package" model and competed with low prices, but they have collapsed due to broken capital chains.
In this regard, Le Zhentian suggested that in the current market environment of stock competition, Ningbo's small and medium-sized logistics companies should maintain rational investment and prudent operation within their own capabilities, and continuously extend the service chain to improve their own competitiveness.
Reporter Yan Jin
