Recently, a sharp correction in the price of sea freight from China to the United States has attracted market attention. Compared with the high of US$20,586/FEU (40-foot container) on September 10, 2021, it has fallen by nearly US$5,000, a decline of 22.25%.

 

Many Chinese freight forwarding companies said that sea freight from Ningbo Port and Shanghai Port to the West Coast of the United States dropped by a three-month increase in three days! This is good news for American importers who import from China to the USA.

 

The adjustment of shipping prices between China and the United States has made many Chinese suppliers and American importers suffering from soaring sea freight rates see the light.

 

Why is the ocean freight rate from China to the west coast of the United States callback?

 What are the reasons?

 How will shipping prices from China to the USA go in the future?

 

 

This price correction is a normal phenomenon. With the cyclical reduction of orders and increased shipping capacity, shipping prices may gradually return to a rational level.

 

In recent years, COVID-19 has disrupted the global shipping chain and congested terminals in many overseas countries, leading to high global shipping freight rates. Take the China-US route as an example. The China-Western US route has risen from the usual US$5,000 to US$22,000.

 

Many factories and importers are in great pain. The value of goods with low added value cannot even be worth the ocean freight cost. Recently, ocean freight prices on some routes such as China and the United States have corrected, but they are still at a high level compared to before the epidemic.

 

Recently, the Baltic Sea Freight Index (FBX) data shows that the global container freight index has fallen from US$11,109 on September 10 to US$9,949 on October 8.

 

Among them, the biggest decline is the popular route China/East Asia-West America. The index price has fallen for four consecutive weeks. It was 20,586 USD/FEU on September 10, and fell to 16,044 USD/FEU on October 8, a drop of nearly 5,000 USD. 22.25%.

 

On October 11, there was even the latest quotation showing that the sea freight from Shenzhen/Yantian Port to Los Angeles/Long Beach Port in the United States dropped to US$8,300, which was directly cut in comparison to the Baltic Freight Index (FBX) price. However, many people in the shipping industry said that the price is significantly lower than the market price, which may be temporarily adjusted to release the container space, or it may be the space stocked by some freight forwarders. In order to avoid loss of space, it is sold at a low price to avoid a big loss.

 

 

What is the main reason behind the sharp drop in ocean freight on the west coast of the United States?

 

Chris, head of overseas sales at Bestforworld, believes that overtime shipping capacity has increased, the National Day holiday came and the unexpected wave of power cuts that the industry expected, the three forces collided together, and the US West route was like this without a little precaution. There was a sudden drop. This wave of price drops caused heavy losses for freight forwarders who stock up on a large number of cargo spaces.

 

Chris believes that the drop in ocean freight rates in West America is a good thing for the entire container shipping market. The sharp drop in prices has made everyone feel the ruthlessness of the market. If the freight rate rises sharply, it will definitely fall sharply. In addition, the slump also shows once again that market issues must ultimately be resolved by market methods.

 

Wang Guowen, director of the Logistics and Supply Chain Management Institute of China (Shenzhen) Comprehensive Development Research Institute, told Bestforworld that the shipping price has been adjusted recently, but it is still at a high level, which has put a lot of pressure on global trade and consumption costs. From the perspective of the supply side, the international shipping capacity has been increasing since last year, which will effectively alleviate the shortage of cargo space.

 

However, Wang Guowen believes that it is difficult to conclude that electricity curtailment is the cause of the decline in freight rates. The impact of electricity curtailment on enterprises in the Pearl River Delta region is relatively small, while the Pearl River Delta and the Yangtze River Delta are concentrated areas of foreign trade. Monthly and October export data. Judging from the trend over the years, the peak period of foreign trade orders has passed. Some time ago, vicious replenishment and Christmas inventory. July, August, and September are the peak periods of orders. By October, it has basically ended. This is a normal season. The sexual cycle response is not necessarily a direct result of power cuts.

 

 

Of course, the freight rates of not all routes have fallen. According to data from the Shanghai Shipping Exchange, as of October 8, the composite index of China’s export container freight rates increased by 1.6% from the previous period. The highest increase was 8.6% for Southeast Asia routes and 7.0% for East US routes. Among them, the West America route, the Mediterranean route, and the South Africa route fell 3.7%, 1.6%, and 1.1% respectively.

 

“Recently, our two refrigerated containers went to Brazil, and the freight was nearly 4,000 US dollars cheaper. The route from China to Europe has not dropped significantly, and we still ship according to normal needs.” Chris added. Similarly, the freight rate of the China-Africa route is still relatively stable, and there is no decline.

 

Derivative content: some inside stories and highlights of the surge in shipping charges from China to the United States.

 

 

 

Who has benefited the most from the surge in shipping charges between China and the United States?

 

In fact, the biggest benefit of the surge in ocean freight is not the shipping company or carrier, but the designated first-level agent under the shipping company, because a container with a cost of 8,000 USD can be used to drive up the price to 14,000 or even 15,000 USD for sale based on market demand.

 

Many people see the surface, and there are very complicated interests in it.

 

The complex interest that exists inside divide and interest bind

 

 

Who is the person who has suffered the most from the surge in shipping charges between China and the United States?

 

The biggest losses are those importers who import less than 30 containers per month from China.

 

Basically, they paid an extra ridiculous ocean freight ranging from 500USD to 6000USD for each container.

 

In fact, the loss of many importers can be minimized. Of course, it depends on which freight forwarding company they use and whether their freight forwarders have a responsible, fair, and realistic attitude.

 

Do they have a strategic vision for a long-term cooperation?

 

To get the best logistics strategy, and plan, when you import from China and other Asian countries to the United States, contact Bestforworld, our experts will let you get a satisfactory answer.

 

You can simply get sea freight from any freight forwarder. At that time, they could not provide you with a strategic logistics strategy, because these involve a lot of insiders and actual combat experience, we cannot disclose it for free, of course, when you read our blog, Your confidence in shipping from China will also greatly increase. Everyone can learn a lot of freight knowledge from different perspectives.