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Empty containers, trucks and other goods, foreign trade/shipping market "spring" when to come
Jul 25,2023
Under the contraction of foreign trade, the accumulation of empty containers at the docks continues.
Recently, on the wharf of Shanghai Yangshan deep water port, containers of different colors have been neatly stacked into six or seven layers, and the accumulation of empty containers has become a scenery along the way.
A truck driver is cutting vegetables and cooking behind a vacant trailer, with long rows of trucks waiting for goods. On the road from the Donghai Bridge to the dock, there are more empty trucks "visible to the naked eye" than trucks loaded with containers.
As the world's largest container port, the accumulation of empty containers in Shanghai Yangshan Deepwater Port is quite representative.
Compared with the downturn in foreign trade, the problem of oversupply of transport capacity, which continues to intensify due to the delivery cycle, makes the shipping market face a greater test.
If the accumulation of empty containers during the Spring Festival this year is mainly affected by seasonality, then the current accumulation of empty containers is a comprehensive superposition of diversified factors.
The decline in foreign trade is undoubtedly a major background, which makes the industry's original expectations of the recovery of market demand after the liberalization of the epidemic "failed".
Customs data show that in June this year, the country's total import and export value reached 500.02 billion billion U.S. dollars, a decrease of 0.3 percent from the previous month and a decrease of 10.1 percent from the same period last year.
The total value of exports was US $285.32 billion billion, up 0.5 per cent from the previous month and down 12.4 per cent from the previous year, while the total value of imports was US $214.7 billion billion, down 1.3 per cent from the previous month and down 6.8 per cent from the previous year.
In dollar terms, in the first half of this year, the country's imports and exports fell 4.7 percent year-on-year, exports fell 3.2 percent, and imports fell 6.7 percent.
Recently, Li Xingqian, director of the Foreign Trade Department of the Ministry of Commerce, explained at a press conference that the recent decline in China's import and export growth is a direct response to the weak recovery of the world economy in the field of trade. The first is due to the continued weakness in overall external demand.
Major developed countries are still adopting tightening policies to deal with high inflation, and some emerging market exchange rate fluctuations and insufficient foreign exchange reserves have significantly suppressed import demand.
Second, the electronic information industry is also cyclical downward. In addition, the import and export base rose significantly in the same period last year, while import and export prices are also falling.
The slowdown in trade is a common challenge facing all economies, and the difficulties are more global.
In fact, empty containers are not the only phenomenon on Chinese docks.
According to data from the container trading platform Eshijie (Container xChange), the 40-foot container CAx (container availability index) in Shanghai Port has remained around 0.64 this year, and ports such as Los Angeles, Singapore and Hamburg are even above 0.7 or even 0.8.
When the value of CAx is greater than 0.5, it means that there is a surplus of containers, and long-term surplus will produce accumulation.
The situation of oversupply in the shipping industry will intensify in the next few years, which means that the demand-increasing effect brought about by the expected moderate rebound in trade demand in the next year and the next year will also be diluted by supply growth, thus making the profitability of the shipping industry at a low level for a long time.
In the short term, long-term contracts previously signed have lagged shipping companies' profits this year.
For China's international logistics and freight forwarding companies, the industry's internal volume brought about by the shrinking market has directly triggered a sharp decline in profits.
"Basically, we are cutting prices and grabbing orders. Our prices have been reduced to the lowest, and our profits have also been reduced to the lowest." An international freight company in Zhejiang said that the company's current profit margin is about 60% lower than before.
The annual regular foreign trade season is approaching, when can the market improve?
Looking forward to the third quarter of this year, according to Zhou De, director of the China Shipping Prosperity Index Compilation Office, the prosperity and confidence index of all types of shipping companies will pick up slightly in this quarter.
However, due to the impact of oversupply in the transportation market and carbon emission reduction requirements, the market will continue to be under pressure in the future. For the future recovery prospects of the industry, and whether the traditional peak season in the third quarter can arrive as promised, Chinese shipping entrepreneurs are slightly less confident and more cautious. attitude.
The person in charge of the above-mentioned Zhejiang international freight companies said that for them, the peak season generally starts at the end of August and the beginning of September. It is expected that the business volume will pick up in the second half of the year, but the profit margin will continue to be low.
Chen Yang said frankly that at present, the industry is quite confused about the future trend of freight rates, "all feel that the uncertainty is too great". Even if the freight rate has rebounded slightly recently, it does not mean that the market has begun to pick up. There is no clear upward momentum on the demand side yet.
However, since July, freight rates have risen slightly, and China's supply chain is still very resilient. With more and more Chinese enterprises "going out", it is estimated that the overall market will recover in the second half of the year.
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