Why are global shipping prices falling?

Benefiting from the obvious cost advantage, the current global shipping volume accounts for more than 90% of the total trade volume. As one of the most important shipping methods, container shipping accounts for more than 80% of the total seaborne trade volume. Trade has a huge impact.

According to public data, the latest Shanghai Export Containerized Freight Index released by the Shanghai Shipping Exchange was 2,562.12 points, down 10% from the previous issue, and has been falling for 13 consecutive weeks. In addition, the Drewry World Containerized Index (WCI) has declined for 28 consecutive weeks, and the Baltic Dry Index is currently at its lowest level in nearly two years.

Generally speaking, the third quarter is the traditional peak season for global maritime container transportation, and ocean shipping prices will also "rise up". For Chinese foreign trade companies that have suffered from "hard to find a box", will this decline be a benefit to reducing import and export logistics costs?

Whether it is good or not depends not only on what is the real reason for the decline in ocean freight rates, but also on the extent of its decline. Only moderately falling freight rates can help remove the "false fire" in the global shipping market.

Since the beginning of this year, the global container transportation market has generally continued the market situation since the second half of last year. The container shipping price began to fluctuate after reaching its peak at the beginning of this year, especially due to factors such as high inflation rates in Europe and the United States, geopolitical conflicts in some regions, and the continued spread of the epidemic. Due to the combined influence, the global shipping market demand has shrunk sharply. In addition, the imbalance of international capacity allocation and the reduction of orders in the shipbuilding market have also had a certain impact on shipping prices.

It should be pointed out that this round of shipping prices continued to fall, in a sense, it was also a periodic correction of last year's "abnormally high" shipping prices, which is conducive to bringing the soaring freight rates back to a relatively reasonable price level. That is to say, at present, the moderate decline of international shipping prices is reasonable, but the continuous slump or even a cliff-like decline is not conducive to the healthy development of the entire shipping market. Although the proportion of shipping costs in the entire foreign trade cost is not the highest, the drastic fluctuations in freight costs will inevitably be transmitted to the foreign trade market, which in turn will affect the smooth operation of the entire foreign trade industry chain and supply chain.