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There is a law in the agricultural product market, that is, if it falls for a long time, it will rise, and if it rises for a long time, it will fall.

In fact, not only agricultural products, any market cannot escape this law, and the same is true for global shipping.

1. From "a box is hard to find" to selling boxes at a discount

After the outbreak of the global epidemic, the global supply chain was interrupted, and countries began to print money in an effort to vigorously restore the economy. Global demand exploded.

The surge in demand has two direct consequences: one is rising prices, and the other is freight outflows.

In this way, stimulated by the surge in global demand, global freight transportation began to become lively.

In addition, due to the epidemic inspection, the time of departure and arrival at the port has been extended, which also increases the time of loading and unloading.

Since April last year, air routes around the world have become extremely busy and congested.

Because a large number of ships have to queue up for quarantine, many containers are "departed and never returned", resulting in a vicious cycle and the situation of "it is hard to find a container".

As the saying goes, rare things are more expensive, and boxes are hard to find, so prices will naturally rise.

In this way, global shipping prices have skyrocketed, more than five times higher than in 2019.

However, this year, the style of painting began to change.

The third quarter of each year is the traditional peak season for shipping. European and American retailers and manufacturers will reserve inventory and raw materials in advance to prepare for Christmas and New Year's Day at the end of the year. However, this year's traditional peak season seems to be Very light.

First of all, the spot freight prices of the most popular routes have fallen. For example, the spot freight rate from Shanghai to Los Angeles dropped to US$7,652/FEU, a year-on-year decrease of 16%.

The price of container shipping from Shanghai to Europe and the United States has even fallen below the long-term agreement price.

On the other hand, last year’s situation of “hard to find a box” has disappeared, and container giants have begun to “sell boxes at discounts”, with discounts generally ranging from 10% to 20%.

2. Is it really "cool"?

Last year, there was also a sharp drop in shipping costs.

In September last year, the shipping giant CMA CGM took the lead in announcing a "freeze" on freight rates, and then Matson Lines' quotation suddenly halved, which once caused a lot of discussion in the market. Is the sky-high freight rate going to "cool"?

But in fact, the price reduction was not really a price reduction, because in addition to freight, many other additional costs were added. These costs added up are not a lot, and some are even After adding the shipping fee, the shipping cost will be even more.

The so-called "frozen" freight rates also lock freight rates at a high level, which means locking in profits for shipping companies.

But this time the situation is a little different.

The main reasons for this drop in freight rates are the slowdown in demand and the swing of the US economy.

Some foreign trade companies reported that it is now much easier to find space and boxes than last year, and shipping prices have also dropped a lot, but at the same time, orders from Europe and the United States are also decreasing.

This is mainly due to the continued high global inflation, which has affected residents' daily consumption habits and triggered changes in commodity demand.

However, with the further resumption of work and production and the peak consumption season in Europe and the United States in the third quarter, strong support has also been formed for shipping.

It is expected that there will be large fluctuations in the short term, but it will stabilize at a reasonable price in the medium and long term.

3. Has the market trend changed?

High shipping prices have undoubtedly increased import costs, especially because the market is very concerned about the trend of grain prices.

Since last year, global agricultural product prices have continued to rise. With increasing transportation costs and tight ship supply, it is easy to rise but difficult to fall when food prices are pushed up again.

This year, however, the market has changed.

Many institutions predict that as global inflation continues and the Federal Reserve sharply raises interest rates, the global economy will begin to slow down and there is a risk of inflation peaking.

And the market has reflected it. Recently, the energy, food and financial markets have all fallen one after another. Although they will not fall into a trough all of a sudden, this downward trend has begun to appear.

On the other hand, although current shipping costs are still higher than pre-epidemic levels, global physical consumption is declining due to inflation and is shifting towards service consumption. Therefore, we need to be wary of a drop in high demand in the second half of the year.

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