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The data show that this week (November 29-December 3), China's export container freight index (CCFI, reflects the settlement prices of collection companies) was unchanged from the previous month, while the Shanghai export container index (SCFI, reflects the booking prices of container and freight forwarders) rose 2.7 per cent from the previous month (see chart below). The Baltic container freight index, which FBX, reflects forwarder settlement prices, is down about 15 per cent from its September peak and is up 0.08 per cent month-on-month this week.
On the other hand, freight rates for long-term shipping contracts continue to rise sharply. According to a report released by Xeneta, a shipping data consultancy, the average price of global long-term shipping contracts rose 16 per cent in November, up 121 per cent from a year earlier.
Patrik Berglund, CEO of Xeneta, pointed out that the perfect storm of persistently high demand, maximized freight volume, still congested ports, changing consumer habits and widespread supply chain disruptions is driving a surge in shipping costs, which we have never seen before. "
Since Q4 in 2020, cargo volume on Asia-North America routes has continued to grow "unexpectedly", and the limited flexibility of US ports and inland supply chains has caused freight rates to soar several times to a record, but the Q3 traditional peak season in 2021 has seen a month-on-month decline in cargo volume on the US line, which may be partly due to increased congestion at ports in the United States and the West.
Price is the most sensitive signal to reflect the fundamentals of supply and demand. Zheng Wu, an analyst at Guotai Junan, recently released a research report saying that the overall volume of goods increased by 20% in the third quarter, lower than in the second quarter. According to Asian shipments compiled by CTS, the growth in shipments in September was only short-term, and it is estimated that shipments will fall in October, and US imports from China also fell month-on-month in October. Considering that the quotation of container freight forwarders has fallen by nearly 20% in the past two months, and the growth rate of air cargo volume in North America has slowed down, it is recommended to guard against the risk of demand inflection point.
However, Fan Lei, an analyst at Guohai Securities, retorted that the decline in shipping prices does not mean that the scale of exports will weaken in the short term. On the one hand, the price drop is mainly reflected in the secondary market. In the primary market of container freight, the quotations of shipping companies and their direct agents (first-class forwarders) are still strong, still much higher than the level before the epidemic, and the demand side of the shipping market as a whole remains strong. On the other hand, since September, the supply situation of global shipping has gradually improved and formed a certain support for exports. the market expectation that this improvement will continue is an important reason for the price reduction of freight forwarders in the shipping secondary market.
The latest data show that the relevant index reflecting freight rates continues to rise, confirming from the side that the demand for collection and transportation remains strong. Su Baoliang, an analyst at China Merchants Securities, said in a research report on November 28 that the congestion in the port has not been alleviated and the demand for collection and transportation is at a high level.
In addition, the emergence of a new strain of "O'Micron" has intensified concerns about the global economic recovery. Some industry insiders believe that the epidemic will benefit more freight rates, and high freight rates may continue in the short term.
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