Global demand for imported goods from China has been declining for several consecutive months. This also lowers the price conditions of maritime transport. “In the direction of imports, we are seeing a sharp decline in rates. For example, on the China-US route there was a decrease of two thirds compared to the same period in 2021. On the main China-Europe route there was a decrease of more than The spot fares have therefore fallen to around 45% since the beginning of this year, “David Knobloch, managing director and co-owner of the transport company NTG Air & Ocean, describes the current drops.
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However, according to the expert, there are also other reasons behind the shipping discount.
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“Large-scale transport from China to Europe has resumed via the upper railway line through Russia, which many hauliers have now abandoned for moral reasons in connection with the attacks on Ukraine. In addition, there is also a gradual increase in capacity. transport at sea, “Knobloch said.
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So the question arises whether, along with falling freight rates, imports from China to Europe will become cheaper.
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“This year we will certainly not see a drop in imports yet, mainly due to the increase in costs in the ports and subsequent transport in Europe. However, I expect that the reduction in prices will take place as soon as possible in the next. year, because maritime transport capacity should be increased by up to 8 percent in 2023 “, said the director of the transport company NTG Air & Ocean.
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A drop in demand could translate into a stabilization of the ports and the consequent infrastructures, following the clearing of the container congestion that has weighed on the sector in recent times.
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David Fuchs, CEO of Agora DMT, which is the largest electronics importer in the Czech Republic, also expects the same development. According to him, Europe is currently struggling with several problems, which, on the other hand, will push the final prices of imported goods even higher.
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“The increase in the price of diesel increases the price of intra-European and domestic transport tariffs. It has also strengthened the dollar, which is used to buy goods in Asia, and the price of energy has increased in Europe, which is reflected in the costs of So at the moment I don’t see much room for discounts, in fact, we see that electronics prices before Christmas are 20-25% higher than last year, “said David Fuchs for SZ Byznys.
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Specifically, according to him, the demand for electronics is not yet declining, however, people are much more considering which goods to buy and which they don’t necessarily need.
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“We are seeing a huge increase in demand for, for example, smart products that help save energy in homes, such as smart sockets, thermostats, adjustable heating heads and other similar products,” adds the head of Agora DMT.
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Owners line their pockets
Despite the drop in freight rates, however, shippers continue to generate huge profits. Despite the decline in recent months, transport prices are still around three times the pre-pandemic prices.
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“Over the past few months, their margin has averaged $ 3,600 per TEU (one twenty-foot container),” says NTG Air & Ocean’s David Knobloch, for example.
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The expectation of high profits can also be observed in the same shipping companies, which are again evaluating their profitability. For example, the Danish shipping company MAERSK recently announced that its result is expected to reach $ 37 billion before tax this year, 23% more than assumed. German shipping company Hapag Lloyd revised its forecast by 30% to $ 21.5 billion before tax.
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The instability of maritime transport is most evident in Europe
Over the past two years of the coronavirus pandemic, the industry has faced a series of significant fluctuations and mismatches in supply and demand, the closure of entire Chinese cities, airports, terminals, and even a host of problems associated with natural influences. Even today, the situation in the international transport sector is not rosy.
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European ports are overwhelmed and related infrastructure is collapsing.
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“The biggest problems have shifted to Europe. European ports are overwhelmed and related infrastructure is collapsing. Recent strikes by workers in German ports and planned construction work underway are certainly not helping the situation, causing delays in container deliveries. sometimes several weeks. It can be assumed that the price level of inland infrastructure will continue to rise despite the significant drop in shipping rates, “says Knobloch for SZ Byznys.
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According to him, problems can also be encountered in export shipments, which often fail to reach the port for customs clearance on time.
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“Export is directly related to import and there is even a situation where some terminals in the Port of Hamburg have not allowed export trains to load containers, unless they have simultaneously brought the same volume of containers in the direction. import “, adds an NTG expert.
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The reliability of shipowners is growing
However, according to global data, shipowners are currently managing to reduce ship delays from an average of eight days to six days, and the reliability of the service is now over 40%. Compared to the pre-pandemic years, this is still a significantly lower rate. For example, in 2019, the reliability rate of these companies went up to 80%.
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