Sea freight soared; The cost of foreign trade enterprises soared 10 times!

Time: 2021-08-19

On August 10th, the Freightos Baltic Index released by Baltic Shipping Exchange and Freightos showed that while the freight index of other routes hardly changed, the shipping price of China/Southeast Asia-North America West Coast and China/Southeast Asia-North America East Coast continued to soar, with the former price being $18,555/40 feet and the latter price being $20,636/40 feet. From the index point of view, the shipping price of China/Southeast Asia-the east coast of North America broke $20,000, up by more than 500% compared with the same period of last year. China-Europe sea freight is basically stable at about $14,000. It is expected that the global container freight will continue to rise.

Foreign trade enterprises-freight is more expensive than goods

It is understood that the freight rate of some industries represented by furniture has already matched or even surpassed the value of goods, and foreign demand is strong. However, due to various export uncertainties and container shortage, most foreign trade enterprises have accumulated goods for several months, and the capital chain is in jeopardy.

A business owner who is mainly engaged in furniture leasing business in the United States said that taking furniture such as sofas imported from China as an example, the value of a single cabinet is basically equal to the current sea freight, and even some sea freight slightly exceeds the shipment value, with the ratio of freight to value reaching 110%. A manufacturer of non-woven fabric coil equipment such as masks and medical protection in Wenzhou said that due to the big environmental reasons, the cost of raw materials and freight rates have risen sharply, and the container freight rates in several major exporting countries have generally increased three or four times, and the cost of enterprises has increased greatly. At present, an electrical appliance technology co., ltd in Zhejiang has overstocked orders from June to August, with a large number of deliveries and a warehouse explosion. The price competitiveness of export products is greatly weakened, which directly leads to the decline of production enthusiasm of enterprises.

Recently, the shipping price continues to hit a new high, and it is estimated that the average shipping cost has exceeded the value of goods per container. The price of container shipping soared to 10 times before the epidemic, which has been completely and directly transferred to the cost of foreign trade enterprises.

Generally, 3~5 years is a cycle of shipping market, and the high periodicity of supply and demand determines that the strong recovery of demand side will usually drive the capacity supply to enter the growth cycle after 2~3 years. It is expected that the container freight will continue to rise until the end of this year and fall in the first quarter of 2022, so the container freight will remain at a high level for many years.

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