Recently, the "soaring" pace of shipping price related indicators seems to have slowed down, the Baltic Dry index (BDI) continued to fall, China's export container freight index fell slightly. However, the securities Daily reporter noted in the interview, "box worry" is still the heart of many foreign trade enterprises, and even some of the export goods after arriving at the destination port, due to the high detention costs of the port abandoned goods.

Experts interviewed by Securities Daily said that the current overseas demand for China's export commodities is still strong, and China's export container freight center may still be high in the future.

Container rates remain high

According to securities Daily, the Baltic Dry Index (BDI) stood at 2,591 points as of November 16, falling to its lowest level in nearly five months and down 51.14% from its peak on October 7.

Mingming, FICC chief analyst of Citic Securities, told Securities Daily that the recent Baltic Dry index soon fell, the main reason is driven by the fall in iron ore demand. Specific observation of the index sub-items, the most significant decline is the Cape of Good Hope freight index (BCI), October 7 to date has fallen more than 60%. This type of ship mainly carries iron ore, coal and other bulk commodities. Due to the apparent drop in global iron ore demand, it drives down the demand for related types of ship, and then makes the freight price fall.

According to the latest data of Shanghai Shipping Exchange, on November 12, the composite index of China's export container freight rate was 3,232.37 points, down 1.6% compared with the previous period.

The shipping price of sino-US route has also changed substantially in nearly a month. According to FBX data, on October 22nd, the shipping price from China/East Asia to the west Coast of North America was $16,884 /FEU (40-foot container), and continued to rise until November 5th, when it reached a one-month high of $18,730 /FEU. After that, it began to decline in a straight line and fell to $14,885 /FEU by November 12th. In addition, sea freight from China/East Asia to the East Coast of North America also fell from $20,291 /FEU on October 22 to $16,671 /FEU on November 12.

An official from a shipping company told securities Daily, "Recently, U.S. freight prices have fallen slightly, but the position is tight."

However, the change of freight rate index is conducted to foreign trade enterprises, the impact seems not obvious. "At present, the company pays sea freight compared with the past decline is not obvious." Li Haifei, general manager of Beijing Da Kaille Import and Export Trading Co., LTD., told Securities Daily that the company operates oil drilling equipment, but some foreign trade orders have been lost due to the high sea freight.

Sun Wenfang, founder of GLA Global Logistics Alliance network, told Securities Daily that orders from freight forwarders in Europe, The United States and the Middle East are decreasing, while orders from southeast Asia are picking up slightly. From the global market, freight forwarding companies to receive orders generally fell.

In addition, Sun Wenfang told reporters that there are sometimes cases of no one picking up the goods after the arrival of export goods at the destination port. "Some destination ports have stranded goods. After the arrival of the goods, some foreign customers will choose to abandon the goods because of excessive detention fees such as dock fees, storage fees and demurrage fees."

Bai Ming, director of the International Market Research Institute under the Academy of Commerce, said in an interview with Securities Daily that the Baltic Dry Bulk cargo Index refers to bulk cruise ships, while foreign trade enterprises perceive the container freight index more. At present, the phenomenon of "one container is hard to get" still exists, and even some places have invested in relatively cheap disposable containers.

Obviously, although China's export container freight index fell slightly, the absolute level is still at a high level, there was no significant decline. Global supply chains remain clogged, with major ports in the United States and Europe suffering from low productivity and labor shortages. At present, overseas demand for China's export commodities is still strong, so China's export container freight center may still be high in the future, which also puts forward higher requirements on the risk prevention and cost management ability of foreign trade enterprises.

Exports are expected to remain high

At present, China's foreign trade recovery momentum is good. China's exports reached 17.49 trillion yuan in the first 10 months of this year, up 22.5 percent year-on-year and 25 percent from the same period in 2019, according to data released by the General Administration of Customs. Among them, exports rose 20.3 percent in October, up 0.4 percentage points from the previous month.

Clearly indicated that China's export exceeded expectations again in October, external demand was still strong, key export products continued to perform well, mechanical and electrical products maintained high growth, clothing and clothing accessories, automobile growth rate increased significantly. In addition, the export data were partly supported by the effect of rising prices.

The latest data from major ports show that in the first 10 months, the throughput of Hebei's ports exceeded 1 billion tons; The container throughput of Xiamen port reached 10,001,500 TEUS, up 6.4% year on year. The container throughput of coastal ports in Shandong province totaled 2.885 million TEUS, up 10.3% year on year. The cargo throughput of Quanzhou Port was 70.5079 million tons, up 26.96% year on year. Huzhou completed port cargo throughput of 108 million tons, up 12.6% year on year; The container throughput of Wuhan port reached 2.0606 million TEU, exceeding 2 million teU for the first time. Ningbo Zhoushan Port handled 1.028 billion tons of cargo, up 4% year on year.

It is clearly predicted that at the end of this year and even in the first half of next year, export is expected to continue to maintain a high boom. On the one hand, early orders are relatively strong, and European and American enterprises still have partial demand, which continues to support China's export of intermediate goods, capital goods and consumer goods. On the other hand, there is both upstream and downstream relationship and parallel substitution relationship between China and ASEAN in the industrial chain. It is expected that the economic repair in Southeast Asia will support China's export of intermediate goods at first, and will have a substitution effect on China's export after its capacity repair.

At the same time, clearly said, although China's container shipping prices are still high, but has become loose. With the subsequent release of profits and the stabilization of shipping prices, foreign trade enterprises can relieve the pressure of "dare not accept orders" before. Therefore, foreign trade enterprises should seize the current profit release, strong external demand window period, further expand the scale of receiving orders, reasonable arrangement of order completion time, in order to continue the high prosperity of foreign trade.

In Bai Ming's view, the following five aspects should be taken to further support the recovery of foreign trade: first, consolidate the achievements of epidemic prevention and control to lay a solid foundation for a sound order of production and life; Second, do not easily "withdraw" policy support to foreign trade export enterprises; Third, consolidate the industrial foundation for foreign trade development, speed up industrial upgrading, expand research and development, and enhance competitiveness; Fourth, we will improve the business environment in pilot free trade zones and state-level new areas. Fifth, actively expand the Belt and Road market.