The Main Factors That Affect the Price of Sea Freight of General Merchandise Products to Soar

1. Ship operation efficiency

Mainly due to the impact of the epidemic, such as the sickness of Indian crew members, the inability to resume work and production has resulted in a shortage of personnel, long waiting times for containers to be transferred to ports, limited transportation capacity of general merchandise products, and continued high shipping prices. The export delivery period is affected by factors such as the price increase of bulk commodities and the surge in online orders. The export delivery period is concentrated in August and September to reach the peak transportation. Among them, the Shanghai Export Container Freight Index, which reflects the spot market price, hit a record high again, rising for several consecutive weeks. However, the capacity structure is not balanced. For example, the freight rate of containers on popular routes between China and the United States has exceeded US$20,000 per TEU, and even the freight rate has been catching up with the air freight price.

2. The maritime market is cyclical

The cyclical objective law of the shipping market is the basic factor that affects the price increase. Currently, seaborne demand is in an upward cycle, and both the container and dry bulk markets are recovering. The shipping market of general merchandise products is highly monopolized by the world's top ten shipping companies that monopolize 80% of the shipping capacity, which has an important impact on the freight market. The volatility of the shipping market is greatly affected by the market, and its volatility is higher than that of commodities. When the demand for shipping capacity in the shipping market exceeds the supply, the freight index has a significant upward effect and tail-lifting effect. The over-issue of US currency has increased the import of goods from various countries. China is a major manufacturer of low-end and medium-end goods, and the United States is a major consumer. The global supply and demand of goods are dislocated. Affected by the epidemic, the global transportation capacity is insufficient, resulting in the continuous rise of shipping prices.

3. Market share

The sea container price structure consists of origin price, sailing price and destination price. Among them, due to the impact of the epidemic, the price structure and transfer procedures of the origin and destination are complicated, resulting in an unclear price structure of shipping containers. The three major general merchandise products shipping alliances have advantages in shipping equipment and resource business, and there is huge profit potential. Although the capacity of non-alliance liner companies has increased, due to the high threshold, large investment and long cycle of the shipping container and shipbuilding business, the shipping business has great uncertainty and high risk.

4. Global supply chain structure

China has strong production and manufacturing capabilities, and the United States has a dislocation of supply and demand due to the sufficient purchasing power of the over-issued currency. After ten years of low and cyclical fluctuations in ocean shipping, it has now entered a period of rising price cycles. The increase in shipping costs for department stores is an inevitable choice for cyclical price fluctuations. Affected by the epidemic, the transportation capacity is insufficient and the supply of goods is in short supply, and the transportation capacity structure does not adapt to the changes in the trade environment. From the perspective of container logistics, the demand is greater than the supply. In addition, the main business loop has been hindered by the impact of the epidemic, and it will take time for container and ship manufacturing to increase supply.

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