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Freight forwarders undersell shipment space, causing freight rates to fall

Sea freight rates from China to US west coast experienced sharp correction, with the highest price cut by nearly half

In recent weeks, the price of shipping from China to the west coast of the United States has experienced a sharp correction, which has attracted market attention. The adjustment of shipping prices has made many small and medium-sized enterprises doing foreign trade and suffering from the soaring freight rates feel positive. According to reports, an executive of a Shanghai-based freight company said that in the past four days, the freight for a 40-foot standard container from China to the west coast of the United States fell from about $15,000 to just over $8,000, a drop of nearly half. Shipping costs to the East Coast fell from more than US$20,000 to less than US$15,000, with a drop of more than a quarter.

Freight forwarders undersell shipment space, causing freight rates to fall

Some analysts say that shipping costs between China and the United States have fallen sharply because of the approaching off-season and the decline in China's manufacturing capacity. "Speculators" are eager to sell the remaining stock of transportation space. According to previous reports from China Economic Weekly, from the inflow of containers to the market, middlemen continue to trade to raise the price of containers. When a container reaches the enterprise terminal, at least three or four middlemen must have raised the price in between.

China’s Golden Week holiday provides a rare moment of relaxation for freight companies servicing trans-Pacific routes, but it is still too early to judge whether freight rates have entered the adjustment period. As Chinese manufacturers have reduced production, weaker market demand has led to a decline in freight rates on some routes.

At the same time, congestion still exists, and recently there have been signs of spreading from North America to Europe. On the west coast of the United States, the decline in Chinese exports eased the congestion in the Ports of Long Beach and Los Angeles, but the ship’s waiting time was still as long as two weeks.

Source: Waishipping


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