This year's foreign trade is somewhat "different": the "inflated" sea freight rates are falling, and the hard-to-find shipping space has also been loosened in the near future.
According to data released by a number of shipping consulting agencies, the spot freight rates on some routes from Asia to Europe and the United States have recently declined, and the demand for maritime container transportation has also declined.
"There are many trade links involved in foreign trade, and sea freight is only one of them." A foreign trade person told the Red Star Capital Bureau that with the recovery of the overseas industrial chain, they were also worried about the loss of orders.
In response to the recent challenge of outflow of export orders faced by some foreign trade enterprises, the Ministry of Commerce stated that it will do everything possible to help enterprises seize orders and develop markets.
The State Council executive meeting held on May 5 further increased support for foreign trade enterprises in terms of securing orders, improving customs clearance efficiency, and increasing credit issuance.
Tian Yuan, an associate researcher at the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, also pointed out that to help foreign trade enterprises overcome difficulties, we must advance from three aspects: promoting foreign trade innovation and development, ensuring the stability and smoothness of the industrial chain and supply chain, and helping foreign trade enterprises to develop markets.
"Sky-high" sea freight rates have dropped significantly this year
Good news for CIF
The sea freight rate, which remained high last year, has shown a clear downward trend this year.
A freight forwarder told the Red Star Capital Bureau that the shipping price has dropped by about 20% on average since the Spring Festival.
The freight rate from China to West America has dropped by more than 30%, and the drop on the European line is even greater.
As of May 9, prices from Asia to the U.S. and West fell to $12,104 per 40-foot container, the lowest level since July last year, data from the Baltic Freight Index FBX showed.
The World Container Index (WCI), compiled by shipping consultancy Drewry, has fallen more than 16% since the beginning of the year to April.
The WCI composite index fell below $8,000 per 40-foot container (FEU), down 0.9% month-on-month and back to the freight rate level last June.
According to data released by Shanghai Shipping Trading, in April, the average China Export Containerized Freight Index (CCFI) was 3,131.53 points, down 6.0% from the previous month.
After the CCFI hit a new high in recent years in the fourth quarter of 2021, it has been more than 20 weeks since December 2021.
From January 28 to May 6, China's export container freight index dropped from 3,565.33 to 3,056.98, a decrease of 14.25%; the Shanghai export container freight index (SCFI) dropped from 5,010.36 to 4,163.74, a decrease of 16.89%.
Although all indices show a downward trend, freight rates on routes from Asia to Europe and the United States are still high, especially compared to a year ago.
FBX data shows that on May 10 last year, the US West price was $6,536.50, nearly half of the $12,104 mentioned above.
This means that although the sea freight rate has dropped, the feeling it brings to foreign trade people may not be so deep.
"To go to a 40HQ cabinet in Europe before the epidemic, the shipping cost was about one or two thousand US dollars, and now it is about ten times that." Xiaolin, a foreign trader who is engaged in footwear export, told the Red Star Capital Bureau that the shipping cost has recently dropped from a high level, but compared with the previous one , the sea freight is still relatively high, and there is no obvious stimulus to the order volume.
"If it is a CIF (trade term, cost plus insurance plus freight), it is indeed good news." Xiao Wu, who is engaged in textile foreign trade in Jiangsu, explained to the Red Star Capital Bureau that CIF refers to being loaded on a carrier ship at the port of shipment The delivery is completed on time, which also means that the falling shipping cost is equivalent to the seller's profit.
However, Xiao Wu said that the drop in sea freight may bring a series of lag effects. "Foreign customers know that sea freight has fallen, and they will definitely lower prices. At that time, the price of goods will drop, and profits may be affected, but the number of orders may increase. ."
Loose cabins but higher towing fees
Shipping costs remain high
The drop in freight rates indicates that the demand side of the shipping market is declining.
Demand for container shipping by sea has fallen for the fifth week in a row, according to the latest data from shipping consultancy Sea intelligence.
Last year, the situation of "hard to find a cabin" has reversed.
Instead, the shipping company is looking for cargo with the space.
A similar situation appeared in March this year. A freight forwarder told the Red Star Capital Bureau that there was a 20GP small container from a shipping company before, and they were very picky about the goods and strict weight restrictions. "
"After the Spring Festival every year, the first half of the year is the off-season, and the second half is the peak season for shipping." Xiao Dong, a freight forwarder in Qingdao, "predicted" this wave of price reductions in ocean freight in March. "After the Spring Festival, the shipping market is tepid. Hot, many export companies have not received new orders, resulting in a decrease in export volume." He believes that the main reason for the plummeting of European routes is that there is less cargo and the capacity of ships has increased.
One of the obvious feelings of Xiao Wu, who is engaged in textile foreign trade, is that the space does not need to be grabbed like last year, on the contrary, it is still very surplus.
"There are a lot of freight forwarders who have come to sell recently, and the containers are much easier to order than last year."
In fact, the cabin is often faced with empty cabins or withdrawals.
In March, Xiaodong had a cabinet that was exported to Bangkok. The factory was far away from Hong Kong. He asked the tow truck driver to quote 6,600 yuan. When he ordered a car, the fleet rose to 8,000 yuan.
The factory could not accept it, and finally returned the cabin directly.
"The profit of this batch of goods exported to Southeast Asia by the factory itself is not high. If the price of the trailer rises again, the customer will simply not deliver the goods." Xiao Dong said.
According to The Paper, the towing fee from the Suzhou factory to Shanghai Port has risen to 2,300 yuan in early April, and the driver quoted 5,400 yuan on April 14.
On April 15, as the number of foreign-licensed drivers in Shanghai decreased, the latest quotation increased by another 1,000 yuan, with new highs every day.
Foreign trade orders are fluctuating
Loans start a price war
With empty space, freight forwarders seem to be busier.
Xiao Dong's important work every day is to keep asking new and old customers about their shipping arrangements.
"I have a customer who said he didn't dare to answer when he saw an unfamiliar number in Qingdao. He guessed that it was called by a freight forwarder, and he could call about 20 a day."
When the supply of cabin space exceeds the demand, freight forwarders also start a price war, and low-priced goods rushing occurs from time to time.
Despite this, some freight forwarders said that the recent volume of cargo collection has dropped by 20 to 30% compared with the same period of previous years.
"Compared with the order conversion rate before the Spring Festival, the conversion rate is much lower, and there is often no follow-up after the price is quoted." Xiao Dong said that now he is busy quoting almost every day, but there are many reasons why customers can't make the trip in the end, such as still waiting for foreign countries Customer replies, trailers can't be fixed, etc.
The freight forwarding business is closely linked with the seller's shipments.
In addition to the factors of non-delivery, the volume of foreign trade orders also fluctuates.
Kobayashi's footwear is mainly exported to the European market dominated by the United Kingdom and Italy.
"General customer orders will be placed to us no later than May, and June-August is the peak shipment period."
Kobayashi said that last year because of the epidemic abroad, his orders surged; but this year, customer orders fell more, even less than in 2019.
"We asked the reason, probably because last year's Christmas sales season was far worse than expected, resulting in a lot of inventory, so this year's order volume has dropped sharply."
There are also foreign customers who say that the price of purchasing from China is almost the same as the price they buy in Europe, and the domestic purchase does not need to wait too long, and it will not be affected by the shipping price.
Kobayashi said that the value of the leather shoes exported by his own is relatively high, but the sea freight for a cabinet in the UK accounts for 20%-30% of the arrival value. If it is a low-end shoe, the sea freight can account for more than 50%.
"What this means for foreign buyers is that what they used to be able to buy for $10 will now cost $12 or even $15, plus import duties, which is about the same price they would buy directly in Europe."
In addition, as factories in Southeast Asia resume work and production, he is also worried about the loss of foreign trade orders.
"Foreign trade has many links." Xiao Wu said, "Sea freight is only one link, and the overall foreign trade environment is not very good."
Focus on securing orders:
Improve customs clearance efficiency and increase credit issuance
"We are also clearly aware that the environment for foreign trade development is more severe and complex, and faces many risks and challenges." At a regular press conference of the Ministry of Commerce in mid-April, press spokesperson Shu Jueting introduced the current situation of foreign trade, from Internationally, the bottleneck of the global supply chain has not been eased, inflation pressure is rising, monetary policies of major economies are tightening, and the growth rate of the global economy and trade has declined; domestically, local epidemics have occurred frequently, and the production and operation of some foreign trade enterprises have been affected. Logistics and transportation are blocked, supply chains in the Yangtze River Delta, Pearl River Delta and other regions are not smooth, and the overall cost of enterprises remains high.
On the other hand, export growth is slowing in April.
According to data released by the General Administration of Customs, from the perspective of a single month in April, exports were 273.62 billion US dollars, a year-on-year increase of 3.9%; in March, exports increased by 14.7% year-on-year.
This means that the 3.9% year-on-year growth rate of exports in April was 10.8 percentage points lower than that in March.
With the gradual recovery of overseas industrial chains, the trade substitution effect of my country's exports has weakened accordingly.
The outflow of export orders has intensified.
"Affected by the current epidemic, some overseas orders have begun to be transferred. Although the scale is not large and the trend is not obvious, this situation must be quickly reversed." Chen Jia, a researcher at the International Monetary Institute of Renmin University of China, told the Red Star Capital Bureau that this requires the cooperation of the policy level. Export enterprises should make a series of preparations, especially to increase financial support policies for export enterprises in labor-intensive industries.
"Most of the trading enterprises in this area are small, medium and micro enterprises in the manufacturing industry, which are easily affected by the epidemic and supply chain disturbances. Industrial policies, financial policies, human policies and logistics departments need to work together at the micro level to ensure their order management and cost control. and export logistics.”
The State Council executive meeting held on May 5 further increased support for foreign trade enterprises in terms of securing orders, improving customs clearance efficiency, and increasing credit issuance.
In response to the recent challenge of outflow of export orders faced by some foreign trade enterprises, the Ministry of Commerce stated that it will do everything possible to help enterprises seize orders and develop markets. Single channel, on the other hand, actively supports small, medium and micro enterprises to participate in overseas exhibitions and connect with overseas buyers.
Tian Yuan, an associate researcher at the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, believes that for foreign trade enterprises, changes in transportation and inventory have a greater impact on enterprise costs.
First, the sharp rise in transportation and inventory costs led to erosion of corporate profits; second, poor logistics led to an increase in the default rate of export orders; third, it seriously affected the efficiency of export enterprises in receiving orders.
"For a period of time in the future, my country's foreign trade enterprises will still face severe situation, the main export market ports will be congested, the container turnover period will continue to be sluggish, and the bottleneck of international logistics will still exist. ."
Tian Yuan pointed out that to help foreign trade enterprises overcome difficulties, we must advance from three aspects: promoting foreign trade innovation and development, ensuring the stability and smoothness of the industrial chain and supply chain, and helping foreign trade enterprises develop markets.
"For example, to further play the leading role of cross-border e-commerce, overseas warehouses and other new formats and new models; to promote the stable development of processing trade, and to guide foreign trade enterprises to accurately explore the international market."
Red Star News reporter Wang Tian