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Order 800 cabinets in one go! There is no space for the price increase! The freight rate soared above $10,000

2024-05-16 17:31

After the May Day holiday, there was a significant surge in customer demand in the container shipping market. This sudden increase in demand came as a surprise to industry insiders, which is very different from the market situation before the May Day holiday.

Order 800 cabinets in one go!

Some industry insiders said that last week, customers were eager to get 700~800 container spaces to South America for loading electronic products such as LCD TVs. The strong demand for chasing goods drove the price of 40-foot containers soaring, directly exceeding $10,000.

According to industry insiders, the current space to South America is full by the end of June, customers need 700~800 containers, even if they are willing to pay a higher price, there is no space, and the price is expected to rise again.

Analysts believe that May and June are the peak seasons for South America to export fruits and other agricultural products to Asia, and the circulation of goods from China to South America is generally relatively flat under normal circumstances.

However, customers were in a hurry to ship in May, which should be a sign of low inventory levels of consumer electronics, and it is also related to the stabilization of Argentina's political and economic situation. It indicates that there has been a shift in market demand.

Judging from the data on the 10th, the container freight index (SCFI) released by the Shanghai Aviation Exchange shows that the container freight rate of the Far East to South America route has risen sharply.

Among them, the freight rate of 20-foot containers is 5,461 US dollars, and the freight rate of 40-foot containers is 10,922 US dollars, with a weekly increase of 18.13%, a strong increase for several consecutive weeks. It also reflects the recovery of market demand and the tightness of supply to a certain extent.

European and American routes rose by another $1,000!

At the same time, the measures implemented by shipping companies during the May Day holiday have had a significant impact on the market freight rate, resulting in a sharp increase in freight rates.

Originally, the freight rate per large container in the US West was about $4,200, the US East was about $5,300, and the European route was about $3,500.

According to the latest news, the freight rate of European and American routes will be raised by $1,000 on the 15th. It is worth noting that a large shipping line has notified the European route that an additional peak season surcharge of $600 will be imposed between the 22nd and 31st of this month.

Industry insiders said that the sudden surge in demand in Europe, North America and South America is completely different from before the May Day holiday, and the speed and pace of change are very amazing.

Due to the strong market demand, customers have been informed that contracts signed this year will need to be renegotiated, otherwise space will not be available, and the supply and demand roles of buyers and sellers in the container shipping market will change this year.

At the same time, the manufacturing purchasing managers' index (PMI) for April released by the National Bureau of Statistics on April 30 showed that although it fell by 0.4 to 50.4 from March, it was still in the expansion range for two consecutive months and was better than market expectations of 50.3. This shows that exports have begun to pick up, further confirming the trend of container shipping market demand.

At present, many freight forwarders are facing the pressure caused by soaring freight rates and tight shipping space. A freight forwarder said: "The freight rate is changing every day, and I really don't know how to quote!" ”

For cargo owners, the impact is also intuitive. Recently completed goods have to be delayed and the backlog is serious.

Shoot yourself in the foot?

Executives in the shipping industry are concerned about the continued rise in freight rates, believing that this may further depress consumers' purchasing power and bring a series of market sequelae. At the same time, the continuous high freight rate not only makes many freight forwarding companies and foreign trade enterprises unbearable, resulting in the delayed delivery of goods that have been produced, and the backlog of goods at the port, which in turn affects the payment delivery and the scale of follow-up orders.

According to industry experts, the increase in demand for working and studying from home during the epidemic has boosted the demand for related goods, but it has also led to a surge in commodity prices and freight rates, which in turn has triggered inventory backlogs and inflation problems.

Now, the combination of the Red Sea crisis and the adjustment strategy of shipping companies has once again led to a surge in freight rates, which raises concerns that the purchasing power of end consumers in Europe and the United States will be affected, which in turn may lead to a reduction in orders.

Repeating the sharp decline in demand after the epidemic, freight rates fell to the bottom, and the mistake of slumping. While the market outlook for the third quarter is not pessimistic at the moment, there is widespread concern that the peak season may not be high.

Under the pressure of the current excess capacity, the shipping company hopes to absorb the excess capacity by detouring the Cape of Good Hope by the Red Sea crisis ships, and combined with the cabin control strategy, it will make a big profit when the freight rate rises sharply, so as to cope with the rapid decline in freight rates that may occur in the future.

However, industry insiders believe that if freight rates continue to rise and affect the purchasing power of consumers, the market will naturally adjust. Of course, if the Red Sea crisis can be resolved quickly, the current high freight rates are also expected to fall quickly.

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