Reported: "Hard landing" of ocean freight, and the freight of China Europe train remained stable

According to the news media: the decline of ocean container freight rate was faster than expected by industry experts. In the face of the drop in spot freight rates before the Chinese Lunar New Year, shipping companies seem to have nothing to do. "Hard landing" may have become inevitable.

The Drewry WCI index shows that the Asia Nordic route has dropped by 10% in the past week, reaching $1965 per 40 foot container, a drop of as much as half in the past month. At this rate, the spot freight of Drury WCI will be less than $750 per TEU before Christmas.

Even so, the quotations that can be received in the market may be lower. The quotation of a Chinese freight forwarder for 40 foot containers from a Chinese port to a port in Felix, Southampton or London has reached 1000 dollars.

Lars Jense, CEO of Vespucci Maritim, predicted that this round of drop in spot freight rates might reach the bottom after the Lunar New Year. With the inventory adjustment, the demand for freight will probably increase again next summer, and the spot freight will return to a higher level.

In the trans Pacific market, the Asia US West route of the Baltic Sea Index fell by 26% in the past week, at $1430 per 40 foot box, and fell by half in the past two weeks. 18% down the Asia US East route to $3770 at 4ft.

The shipping company cancels a large number of voyages, which will affect the service quality

The carrier is implementing an active capacity control strategy, announcing more suspension of flights and services. Joe Monaghan, CEO of Worldwide Logistics Group, said: "Due to the sharp drop in demand, container freight from Asia has continued to decline, shipping companies have cancelled more voyages than before, and the utilization rate of ships has reached a new low."

The data of cancelled voyage shows that the reduction of ship capacity on the trans Pacific route (from China to the United States) continues at a significant speed. The 2M alliance between Maersk and Mediterranean Shipping (MSC) has suspended almost half of the US Spanish routes in December. Ocean Alliance (Dafei Shipping, COSCO Shipping, OOCL and EVA) and the ONE Alliance (Oceanlink Shipping, Hebrot, HMM and Yangming Shipping) are expected to reduce the overall shipping capacity by 40-50% before the Spring Festival.

The possible results of a large number of cancellations of voyages and reduction of transport capacity include the decline of service reliability and transport delay.

Production orders have decreased by 40%

According to the supply chain analysis data collected by CNBC, China's production orders from the United States dropped by 40%. Worldwide Logistics expects that Chinese factories will enter the Spring Festival holiday two weeks earlier than the previous Lunar New Year due to the falling demand.

According to the analysis of HLS, a global shipping company headquartered in Asia, the shipping market is facing the dual problems of declining demand and excess capacity. "Economic uncertainty, geopolitical concerns and increasingly fierce market competition will further complicate the container shipping market."

Can the "Black Five" sales boom bring demand back?

However, the past "Black Five" promotion can still play a role. The online consumption of American consumers reached a record $9.12 billion, and retail inventory may need to be supplemented. New orders may have some boost to the trans Pacific shipping market. According to Maersk's analysis, there are still signs of recovery in the US retail industry under the overall downturn.

Alan Baer, CEO of American transportation company OL USA, said that early signs of partial inventory adjustment were observed. As carriers cancelled more voyages, the overall business volume and orders in Asia continued to be depressed. However, with the gradual tightening of transport capacity, freight rates may be adjusted in January and the first quarter. On the positive side, the demand for inventory consumption and re ordering seems to be rising gradually. "

HLS data shows that the US import volume from Asia fell to the lowest point in 20 months in October, and there is little room for further decline.

Josh Brazil, vice president of supply chain analysis business of Project44, said that Los Angeles and Long Beach, the large ports on the west coast, experienced the largest decline in trade because shippers also diverted some goods to the east coast to avoid the risk of union strike at the west coast ports.

HLS expects that most carriers will extend their freight rates to the West Coast until December 14, at $1300-1400 per 40 foot container. However, the rate on the East Coast of the United States is expected to drop by $200 or $300, averaging $3200-3300 per 40 foot container in the first half of December.

The freight rate of China Europe train remains stable

In terms of international railway transportation, due to the hot demand in the Russian market, the freight rate of China Europe trains remains firm. In the direction of Russia, most of the space in December has been booked, and the space in January has also been booked.

As the New Year is less than a month away, Russia will enter the New Year holiday, and China will also welcome the traditional Spring Festival in late January. Shippers usually replenish their inventory before these two holidays, so the space for Russia's China Europe train is further scarce in the near future, and the freight is slightly increased.

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