Empty containers are piling up in China’s ports, and shipping has stopped “crazy”. Experts believe that shipping may not be very optimistic in the next few years, but this year is still expected to usher in a relatively peak season. The watershed is expected to appear around June.
“First Financial” reported that Li Mu (pseudonym), the person in charge of a freight forwarding company in Zhejiang, said: “Currently, there are sufficient storage cabinets in various storage yards and terminals. This year’s Spring Festival holiday is early and the start of work is late, which will definitely affect the volume of goods.” Compared with the same period last year, they are not as busy as before after the start of work this year.
Another freight forwarder said that generally one and a half months after the Spring Festival, the container shipping market will gradually recover. However, affected by multiple unfavorable factors since the second half of last year, it will take at least two months to see the market recovery this year.
From “one container is hard to find” to “ships waiting for goods”, and now the major ports are full of empty containers, the cycle of shipping from undersupply to oversupply is faster than people expected.
The root cause of the mountain of empty containers is that, on the one hand, the growth rate of global trade has slowed down, leading to a contraction in demand; on the other hand, a large number of new containers have flowed into the market during the previous surge in freight rates, and the supply has doubled. Data show that in 2021, with the rising market in the container shipping market, the world will produce more than 7 million standard containers, which is almost three times that of conventional years. Coupled with the aforementioned cyclical and special factors, the oversupply has become particularly obvious during this Spring Festival.
The latest data from Container xChange, a global container trading platform, shows that in the sixth week of this year (February 5-11), Shanghai Port’s 40-foot container CAx (container availability index) reached 0.64, which has been above 0.6 for the 11th consecutive week. When the CAx value is greater than 0.5, it means there are remaining containers.
People in the industry believe that it is hard to say whether the shipping industry will usher in a long period of downturn. The shipping industry may not be very optimistic in the next few years, but this year is still expected to have a relatively peak season.
“It is expected to continue to fall within a short period of time after the Spring Festival.” Chen Yang, editor-in-chief of Xinde Maritime.com, a professional shipping information consulting platform, pointed out that there will definitely be a so-called more prosperous period this year. With the change of seasons, the market is relatively prosperous in summer and autumn. In addition, this year, the Chinese government has loosened epidemic prevention and control measures and introduced a series of economic stimulus measures, which will continue to boost the shipping and foreign trade industries.
Wei Ran, head of the fulfillment logistics and customs affairs department of Alibaba International Station, believes: “As the benchmark for ocean freight rates in the U.S. line market, long-term contracts between general shipping companies and major customers are signed before the end of April each year. It will come into effect on the following day.” At that time, the spot freight rate in the market will fluctuate according to the contract price. Judging from the recovery speed of the demand side, this year’s watershed is expected to appear around June.
Wei Ran said that the freight rate and cargo volume in the shipping market fluctuated sharply during the epidemic, and with the gradual launching of new ships, the market will usher in a restructuring. Shipping-related companies have to take two steps. One is to pay attention to the trend of overseas production capacity and supply chains moving to Southeast Asia. capacity and increase core barriers, “Chinese merchants have the ability to assemble goods and supply chain services, but low-value-added goods do not necessarily come from China, that is, more and more goods and services will be separated, forming low-added goods. For value products, trade services are provided in China, and the division of labor for processing and manufacturing is done overseas.”