Chinese traders expect higher global shipping rates as demand picks up
Though international shipping freight rates have been declining recently, the already high rates may stay as Chinese production activities as well as foreign demand for Chinese goods pick up ahead of Christmas and the New Year, Chinese traders and industry insiders told the Global Times.
Shipping rates have been falling in recent months due to various factors, including declining orders and production at some Chinese exporters because of electricity rationing in parts of China.
The rates for extra-sized containers, which are twice as large as standard 20-foot equivalent containers (TEUs), have fallen about 30 percent from the September peak, insiders told the Global Times on Tuesday. From Chinese ports to the US West Coast, the rate is now about $9,000, while to the US East Coast, it is about $14,000.
There are many causes for the declines, including recent electricity rationing in China that reduced production for exporters and left shippers with rising transportation capacity, insiders said. Improved operations at Chinese ports also contributed.
“China’s inland transportation is highly developed, and it can maintain smooth and sound operation even during the epidemic and extreme weathers. This enables timely loading and unloading of goods after they arrive at Chinese ports. And China’s mature quarantine procedures and automation of ports have greatly improved efficiency,” an insider from a Chinese shipping company told the Global Times on Tuesday.
However, as the power shortage situation in China has largely eased following a series of official measures, factory activities are expected to pick up, while demand will also increase ahead of shopping seasons in many foreign markets, including the US and Europe, analysts noted.
China’s foreign trade in the first 10 months of 2021 achieved substantial growth, with both exports and imports seeing double-digit gains. Trade with major trading partners such as ASEAN, the US and the EU also saw robust growth.
Considering rising demand for global shipping, “the current high freight rates are expected to remain at least until the second quarter of next year,” a manager of a domestic large logistics company told the Global Times on Tuesday.
Despite the high freight rates, exports will remain strong, given the resilient demand for Chinese goods ahead of the New Year, the manager said.
Sea shipping remains the most economic mode of transport between China and the US, although some agents have found that the China-Europe railway is a faster and cheaper alternative to sea transportation between China and Europe, a freight agent surnamed He based in Ningbo, East China’s Zhejiang Province, who specializes in shipping between China and the US, told the Global Times on Tuesday.
Source: Global Times