General

At the end of August, a message of "a million Santa Claus Christmas trees trapped in Yiwu warehouse" reflected the dilemma of "crazy boxes" faced by foreign trade companies. Now, with the three international shipping giants, which collectively account for more than one-third of the market, stating that they "no longer increase freight rates" or freeze container freight rates, Christmas products such as Santa Claus crafts and Christmas hats may not be late.

In addition, the "Securities Daily" reporter learned from people close to the supervisory level, "Now the transportation supervisory department is also paying great attention to the issue of rising container freight rates."

Zheng Jingwen, assistant to the director of the International Shipping Research Institute of Shanghai International Shipping Research Center, said in an interview with a reporter from the Securities Daily that from market research, due to the general congestion of global ports and low ship turnover efficiency, the current space is still in a state of shortage. , The liner company’s announcement that the suspension of sea freight increases can play a role in cooling the market, but the actual effect remains to be seen. It is expected that sea freight prices will remain relatively high in the short term.

Giant shipping company freezes freight rates

Follow-up effectiveness remains to be seen

The Christmas season is approaching and facing rising shipping prices, shipping giants have recently announced the freezing of freight rates: CMA CGM has issued a statement on freezing container freight rates, and Maersk and Hapag-Lloyd have successively stated that they will not increase freight rates. ".

According to the latest data released by Alphaliner's official website, as of September 13, 2021, the total container capacity of the world's top 100 liner companies is 25019616 TEU (standard containers), and the total number of container ships in operation is 6,267. At present, among the top 100 global liner companies, Maersk Line ranks first with a market share of 17.1%; CMA CGM ranks third with a market value of 12.1%; Hapag-Lloyd ranks fifth with a market share of 7.2% . The three together accounted for 36.4% of the total market share.

Regarding the action of the shipping giant, Bai Wenxi, chief economist of IPG China, told the "Securities Daily" reporter that the continued increase in shipping prices will inevitably have an impact on the shipping industry itself and the industrial chain involved. It will trigger the reconstruction of the world's industrial structure, industrial chain and value chain, which will cause irreversible damage to the shipping industry. Therefore, shipping giants consciously freeze freight rates are also based on the long-term sustainable development of the industry.

In an interview with a reporter from the Securities Daily, the deputy director of the CITIC Securities Research Institute and the chief FICC analyst clearly believed that freezing freight rates has advantages and disadvantages. Excessive freight rates have eroded the profits and order space of small and medium-sized foreign trade companies. Therefore, the freezing of freight rates has eased the cost and order pressure of foreign trade companies to a certain extent in the short term. However, the root cause of the "flying sky" of freight rates lies in product supply and demand and port efficiency. At present, only the actions of companies in some industries have "treated the symptoms but not the root cause", and the subsequent actual cooling effect remains to be seen.

"If the forced freezing of freight rates is unsustainable, then once the freezing collapses, you may face a more rapid price surge." Mingming further analyzed that considering that shipping is a global issue, the cooperation between countries is even greater. It is important. At the same time, it is also a feasible solution to increase the supply of containers, improve the efficiency of port operations, and solve the dilemma of "there is no return" of the containers in response to the situation of "one container is hard to find".

According to Tian Yuan, an associate researcher of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, recently, shipping prices have continued to rise, and some foreign trade companies have reported that shipping costs are too high, and even "freight has exceeded the value of the goods." If the freight rate continues to rise in the future, foreign businessmen may withdraw their orders directly, and processed goods may face the possibility of abandonment. "Under this background, the shipping company's statement that freight rates are frozen is a positive factor for foreign trade companies. In the long run, it will play a role as a'stabilizer' in the foreign trade market."

Zheng Jingwen believes that for cargo owners who export via CIF (cost plus insurance plus freight), ocean freight is closely linked to its cost, and the "cooling" of ocean freight is beneficial to them; for liner companies, the current market is expensive There is a certain gap between the ocean freight charges and the actual ocean freight charges, and judging from the current profitability of the liner company, it has achieved a good level of profit (maintaining the current freight rate can also maintain a higher profit rate). Under the pressure of public opinion, it is shown that not raising prices is a manifestation of social responsibility and can also attract more customers; for freight forwarders, if the liner companies clearly indicate that they will not raise prices, if the shipper’s ocean freight increases again , It will be mainly caused by the increase in the intermediate links of freight forwarding. Therefore, the profit margin of freight forwarding may be further compressed.

Capacity changes have not yet been reflected

Current positions are still tight

Since the beginning of this year, the Baltic Dry Bulk Index (BDI), which reflects the current market conditions, has also continued to hit new highs. From a short-term perspective, BDI began to rise rapidly from 3410 points on August 11, and gradually fell back after rising to 4325 points on August 27. After reporting at 3618 points on September 8, BDI entered the upward channel again, September 9 and September 10. On the day, it was 3643 and 3864 respectively. The lowest point during the year was 1303 on February 10.

In addition, according to the latest export container freight index published by the Shanghai Shipping Exchange on September 10, the Shanghai Export Container Index (SCFI) reached 4568.16 points, a record high. Compared with the previous period (September 3), it rose by 65.51 points, an increase of 1.5%; compared with last year's lowest point of 818 points, an increase of 458.5%. China Export Container Index (CCFI) was 3157.6 points, which also set a record high. Compared with the previous period's 3,09.58 points, an increase of 1.9%, compared with last year's lowest point of 834 points, an increase of 278.6%.

Faced with the rapid and substantial increase in freight rates, how has the market reacted? The person in charge of a manufacturer of custom-made embroidered Christmas hats in Shenzhen told the "Securities Daily" reporter that September and October are the peak seasons for receiving Christmas merchandise orders. The current order volume is higher than last year, 80% of which come from foreign trade companies. If you place an order now, you will have to wait at least 15 days before shipping according to the schedule." The manufacturer is only responsible for the production, and the freight is the issue considered by the foreign trade company that it connects with.

Manager Zhu (a pseudonym) of another manufacturer in Linyi, Shandong Province that produces Christmas trees for foreign trade companies also said that the number of orders has been relatively large recently. Although ocean freight has risen higher before, he learned from foreign trade companies that "the goods can be sent." Judging from the recent increase in orders by foreign trade companies, foreign trade companies are relatively confident in the "timely arrival" of Christmas hats and Christmas trees.

Another Henan staff member who is engaged in ocean freight forwarding told the "Securities Daily" reporter that this year's order volume is higher than in previous years, but due to the high freight rate, there are still many goods that have not been shipped normally. Regarding the changes in capacity after the recent freeze of freight rates, he said frankly, "The time is short, and the change has not been seen for the time being, and it is still in a state of tight supply and demand."

The reporter observed in an international logistics WeChat group of 500 people that many freight forwarders publish position information in the group every day. On September 13, Qingdao freight forwarder successively released the information of 2 positions, and said that "positions are limited and need to be contacted as soon as possible." There are also many freight forwarders who have released some position information for the second half of this month in advance, with the note "first come, first served".

"Even if the current freight rate increases, but among the tens of thousands of Christmas goods spread in a container, the average price increase per item is not much, and customers are still willing to bear it." Mr. Li from a German Chamber of Commerce (pseudonym) ) To the "Securities Daily" reporter, on the one hand, manufacturers, distributors and consumers are required to share losses during special periods; on the other hand, customers need to stabilize the supply of goods, and small and micro enterprises also need to stabilize customers, even if corporate profits Less, and more willing to retain customers first.

Mr. Li's views have been confirmed by some foreign trade practitioners. Mr. Feng, who currently works for a foreign trade company in Thailand, told a reporter from the Securities Daily that due to multiple factors such as the global epidemic and rising freight rates, many goods have not been shipped before, and the company is currently processing these orders. Speaking of the issue of freight payment, he said: "The freight is paid by our company. Customers want to get the products early. As long as the company's loss is not serious, we will focus on the customer's wishes. Now freezing freight rates is for us. This is positive and will ease the huge pressure brought by further increases in freight rates."

There are uncertain factors in the future freight rate trend

Risk management of foreign trade enterprises is the key

Follow-up shipping price trends and foreign trade are still the focus of attention of all parties in the market. "There are two uncertain factors in the later period of freight rate trends, namely, the'trend' of the epidemic and whether the supply chain can guarantee smooth flow. In the past two years, there is a high probability that the current situation will be maintained, and freight rates may still be high." , It is not that the shipping industry has problems that caused the freight rate to rise, but the impact of the epidemic has caused large fluctuations. I hope that all parties will not have misunderstandings.

Obviously, in an ideal state, the momentum of the short-term increase in freight rates may be weakened, and the cost side will be controlled, which is beneficial to my country's foreign trade enterprises to a certain extent. The fundamental reason for the current high boom in my country’s foreign trade lies in the "time lag" with other countries in terms of economic recovery. Compared with countries such as Southeast Asia and India that play an important role in international trade, China’s capacity recovery is better, and the epidemic prevention and control has been positive. The results have ensured the supply capacity of commodities.

It can also be seen from the latest import and export data released by the General Administration of Customs that my country's import and export growth in August exceeded expectations. Obviously, this analysis stated, "From the perspective of exports, on the one hand, as the traditional festivals in Europe and the United States and other countries approach at the end of the year, most overseas retailers will choose to stock up on holiday supplies in September. However, considering the current shipping efficiency is still recovering and the shortage of containers In other circumstances, the stockpile time point may be advanced to August, and the strong export performance of toys, home appliances and other products has also confirmed this phenomenon. On the other hand, the peak of Delta in Europe has passed, and the demand has performed well. With the arrival of traditional festivals, it is expected that my country’s exports can still maintain resilience and still maintain a positive boost to the economy."

Bai Wenxi believes that in the future, the expectation that foreign trade exports will be negatively affected by rising shipping prices will change, which is conducive to the smooth performance of the foreign trade industry and business growth, and foreign trade companies can seize the opportunity to accelerate development.

The aforementioned person close to supervision said that the shipping market is a highly open market, and the competition it faces is global competition, not a country’s problem. From the government's point of view, what can be done is to find out where the market is "blocked", "prescribe the right medicine", and try to provide services to small and medium-sized enterprises as much as possible. Of course, it will take time to solve these problems.

"Under the current background, the importance of risk management is evident. Whether it is from shipping price risks, exchange rate fluctuations, scattered outbreaks and other risks, all foreign trade companies have put forward higher requirements for risk management capabilities." It is clearly recommended that foreign trade companies pay attention to the risk of exchange rate fluctuations on the one hand, and on the other hand, they need to actively strengthen communication with shipping companies to realize the rapid flow of information.