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| The price of sea transportation fell, and the export of large commodities warmed up |
| Recently, the freight rates of major global shipping routes have dropped sharply. According to the information released by the Shanghai Shipping Exchange on February 18, the freight rates of European routes, Australia and New Zealand routes and other routes have declined. The shipping price directly affects the trade cost and order demand of large consumer goods in China. In this regard, experts believe that due to the Russian-Uzbekistan conflict, oil price rise, epidemic and other factors, the price of maritime transport will rise sharply in 2022. In 2023, the price of maritime transport will gradually return to the normal level, and the overseas orders and exports of large consumer goods such as household appliances, bicycles, etc. in China will also gradually recover. Freight rate fall The freight rates of major global routes have dropped significantly. The weekly report of the export container transport market released by the Shanghai Shipping Exchange on February 18 showed that the freight rates of many routes such as the European route and the Australia-New Zealand route were down. Reduce the observation range to one week, and the drop of freight rate is also "visible". According to the Tianjin International Trade and Shipping Service Center, in the sixth week of 2023 (February 6-10), the Tianjin Shipping Index continued its previous trend of weakening, falling by 16.36 points, breaking the 1000 point mark. The rise and fall of shipping prices also directly affect the trade costs of many commodities. Ms. Cheng, a staff member of a freight forwarding company in Tianjin, told the Beijing Business Daily that in the first two months of this year alone, there was a visible small drop in freight rates. "What we mainly do is the Japan-South Korea route. Compared with the year before, the freight rates of high and small containers on these routes have decreased, about $40-55." Ms. Cheng said. From the perspective of the whole year, the reduction of freight rates is more obvious. Li Zhihui, manager of the foreign trade department of an electrical appliance company in Ningbo, Zhejiang Province, said in an interview with the media that a 40-foot-high container could hold about 216 (washing machines). "In March last year, the highest point of sea freight was about $18500 for a standard container, and about $85 for a washing machine. In February this year, the sea freight was $4500, so it was about $20 for a product." Li Zhihui said. "Due to the conflict between Russia and Ukraine, rising oil prices, the COVID-19 and other factors, the sea freight price will rise sharply in 2022. However, in 2023, the world economy will face the risk of recession, and the sea freight price will gradually return to the normal level." Hong Yong, a think-tank expert of the China Digital Reality Integration Forum and an associate researcher of the E-commerce Research Institute of the Research Institute of the Ministry of Commerce, said. At present, for the short-term freight rate trend, the international shipping research and consulting agency Deluli expects that the spot freight rate will continue to decline slightly in the next few weeks. From the perspective of the whole year, De Lurie mentioned in the market outlook released in January 2023 that the spot freight rate of the centralized transportation market will be reduced by at least 50% - 60% in 2023. De Lurie predicted that the current price reduction would mean that the freight would be closer to the level before the epidemic. Order recovery In global trade, maritime transport occupies a very large market, and the demand is stable and huge. Globally, maritime transport is one of the most important modes of transportation in international commodity exchange, and the proportion of cargo transport volume to the total international cargo transport volume is about 80%. Domestically, about 95% of China's international trade goods are shipped by sea, including large household appliances, home appliances and other products. "Large household appliances are one of the products with high technology content and high added value in China's foreign trade products, and occupy an indispensable position in China's foreign trade economy. In terms of household products, China's household manufacturing industry is concentrated, with a complete range of furniture types, and is the world's largest household production country, the world's largest household export country, and occupies an important position in the global household export trade." Hong Yong said, "Large household appliances, household products and other large consumer goods are generally exported to foreign countries by sea. The soaring freight rate in the epidemic has greatly increased the cost of our relevant enterprises, which is not conducive to our enterprises to expand foreign markets." During the epidemic, many factors, such as rising freight rates, caused China's large products to face a "choke point" when going to sea. According to the data of China Household Appliances Association, in 2022, the export value of China's household appliance industry was 97.25 billion US dollars, down 6.9% year on year. The latest export statistics of the General Administration of Customs also showed that from January to December last year, China exported 3.366 billion household appliances, down 13% year on year. Then look at household products. According to the data of the General Administration of Customs, from January to December 2022, the export value of furniture and its parts nationwide was 463.93 billion yuan, down 2.5% year on year; The export of ceramic products was 18.335 million tons, down 1.4% year on year, and the export value was 217.27 billion yuan, up 10.2% year on year; The export value of lamps, lighting devices and their parts was 307.35 billion yuan, down 3.1% year on year. Behind the decline in exports is the helpless accumulation of enterprises' goods. According to media reports, 91 refrigerators have been stacked in the warehouse of a refrigerator manufacturer in Longshan Town, Cixi, Zhejiang Province for nearly two years. It is reported that the two parties signed a contract in December 2020, and the enterprise will complete production in March 2021. According to the contract, the freight shall be borne by the Israeli purchaser. However, the freight rate of the Middle East route has risen all the way, and the buyers have repeatedly asked for delayed delivery. Challenges remain The reporter noted that with the decline of freight rates on important global routes, China's export of large products has shown a rapid recovery. For example, in the first two months of this year, the orders of many large household appliance manufacturers in Zhejiang have increased rapidly. "In the first two months of this year, the number of orders returned by us has increased by more than 20% compared with the same period last year. Among them, there are orders returned by old customers and new customers, which are expected to increase by 30% compared with the same period last year." Lu Yaozhong, general manager of an electrical appliance company in Ningbo, Zhejiang, introduced in an interview with the media. The export recovery of large household appliances and household products will benefit all relevant industries in the industry chain. Hong Yong said that the electricity export industry chain includes raw material suppliers, manufacturers, distributors, logistics service providers, traders, etc. "Next, these enterprises in the industrial chain may usher in further recovery, including some other professional service companies, such as quality testing companies and consulting service companies," said Hong Yong. Focusing on the large consumer products themselves, there are also important incremental markets for further exploration. Hong Yong analyzed that "in the next few years, with the further development of the economy, the consumption of large household appliances and home appliances in Southeast Asia is expected to continue to grow. At the same time, the quality requirements of products in Southeast Asia will continue to improve, and they are more inclined to buy high-quality products". However, it cannot be ignored that China's export of large consumer goods will also face some challenges. "The fierce competition in foreign markets, the political situation in foreign countries and the improvement of foreign consumers' requirements for product quality will have an impact on the foreign trade of Chinese enterprises," said Hong Yong. At the same time, the characteristics of the industry vulnerable to the impact of shipping prices also require relevant industries and enterprises to seek an effective "outlet". In this regard, Hong Yong suggested that the industry association could establish an effective forecasting model for maritime transport prices to accurately predict the changing trend of maritime transport prices, so as to seize market opportunities. "Enterprises should adopt reasonable investment strategies according to the prediction results of the industry association to reduce the impact of the fluctuation of the shipping price on the enterprise's income and reduce risks. In addition, enterprises can also reasonably arrange the transportation routes, actively sign long-term agreements with the shipping logistics enterprises and other strategies to reduce the shipping costs." "In recent years, the economic and trade exchanges between China and the 'the Belt and Road' countries have become closer and closer. The quality of our enterprises' products has been continuously improved, and their products have gradually been recognized. In the future, China's services to foreign trade enterprises will continue to strengthen, while improving relevant laws and regulations, so as to help foreign trade enterprises of large products improve their ability to explore foreign markets and ensure the sustainable development of the foreign trade industry." Hong Yong said. Source: Beijing Business Daily [ Previous] [Next] [Return] |
