First, China's rapid economic recovery has caused an urgent need to digest domestic production capacity.
Even if the cost rises due to the increase in ocean freight, it cannot stop the export trend of Chinese goods. Judging from the growth rate of 3.2% in the second quarter of my country, the recovery of the Chinese market is fast. The manufacturing industry has production, inventory, and digestion cycles. In order to ensure the continuity of the production line and the entire supply chain, even if the gross profit margin is low or even losses occur, the company will quickly turn over the finished products. Only by allowing the products and funds to flow can reduce Systemic business risks caused by the cycle.
Second, shipping data supports the increase in shipping rates of major shipping companies.
No matter whether it is a shipping company or an airline, it will not go unnoticed to increase, reduce freight, or increase or decrease capacity. The pricing mechanism of shipping companies and airlines is supported by a set of accurate and massive data collection, quantification and prediction algorithms. They will use mathematical models to calculate the short-term market profit rate after breaking prices and capacity, and then make decisions.
Third, the epidemic has intensified the intensity of the trade war, restricting imports and exports of many countries, causing scarcity of shipping capacity and increasing freight rates.
The simple problem of supply and demand of shipping by sea, in fact, is rooted in the way countries face the epidemic, seeking the results of internal and external volume conversion. For example, India first stopped receiving Chinese goods and carried out 100% inspection on all Chinese goods. As a result, the ocean freight from China to India has increased by 475% from the previous month, and demand has shrunk directly, which will inevitably cause shipping companies to reduce capacity to balance supply and demand. The same applies to the increase in freight rates on China-US routes.
From a fundamental analysis, the current supply and demand sides do not support the continued increase in ocean freight. Since the beginning of the third quarter, shipping companies have begun to increase capacity, and it is estimated that they will continue to increase in order to expand profit margins and reduce annual losses, while reducing freight rates and increasing market demand elasticity; secondly, clients generally begin to complain that ocean freight has been eaten If the profit of most products rises further, some exporters without supply chain and capital pressure will suspend their orders and temporarily withdraw from the market. After the demand in the international market increases and the price rises, there will be more profit margins before signing orders. From both sides, the market is basically in the early stage of losing momentum.
