Empty containers pile up at terminals, shipping stops "transshipment", when to usher in the turning point?

Empty containers pile up at terminals, shipping stops "transshipment", when to usher in the turning point?

"At present, the stock of containers in various yards and terminals is sufficient. The early holiday and late start of the Chinese New Year this year will definitely have an impact on cargo volume." Li Mu (a pseudonym), the person in charge of a freight forwarding company in Zhejiang, told China Business Network that compared with the same period last year, they are no longer in a busy state after the start of this year.

From "a box hard to find" to "ship waiting for goods", and now the major terminals full of empty boxes, shipping from under supply to excess cycle conversion, than people expected to be quickly. And a large number of new ships will also usher in the beginning of the concentration of this year.

Industry believes that the next shipping industry is not ushered in a long downturn is not good to be said, but in the next few years, the probability of the shipping industry will not be very optimistic. But this year there will still be a relative peak season.

In the view of Li Mu, empty boxes pile up both after the holiday supply chain end of the cyclical reasons, but also at the end of last year, the epidemic liberalization led to many production enterprises early holiday, raw material inventory reduction, and therefore all procurement and production plans are delayed special factors.

According to another freight forwarder, generally a month and a half after the Chinese New Year, the container shipping market will gradually recover. Affected by multiple adverse factors since the second half of 2022, the market will gradually recover after at least 2 months in 2023.

More serious that the supply of containers than demand, is the excess capacity of ships.The maritime industry is certainly a surplus of containers, but the container's assets are scattered, asset disposal is easier and more widely used, so even if the surplus impact is not too big, but the ship is built out to hide, and also need to maintain." Chen Yang, editor-in-chief of maritime network, told the China Business Network

However, in order to dynamically balance supply and demand, Chen Yang said that some shipping companies are already dealing with some old ships now. At present, mainly some old containers are sent to be scrapped. In the coming period, there may be more ships sent to be scrapped.

The decline in spot rates is in addition to a record drop in long-term rates, according to data from freight benchmark platform Xeneta, which recently reported that average long-term contract rates fell 13.3 % in January.

Maersk also warned that it expects net profit to decline by as much as 93.5% year-on-year in 2023. According to Maersk's 2022 annual report, the company's revenue will grow 32 percent to $81.5 billion in 2022 and EBIT will increase 57 percent to $30.9 billion. While the global economic slowdown will lead to weakness in the market, especially in the maritime market, Maersk will continue to seek growth opportunities in its logistics business and terminal business. Against this backdrop, Maersk expects full year 2023 EBIT of US$2 billion to US$5 billion.

Although the overall situation is not optimistic, there will still be a relative peak season this year.

"A short period of continued decline after the Chinese New Year is to be expected." Chen Yang suggested that there will definitely be a so-called more prosperous period this year. With the change of seasons, the market is relatively strong in summer and autumn, plus the liberalization of China's epidemic prevention and control as well as the launch of a series of economic stimulus initiatives this year will bring continued benefits to the shipping and foreign trade industry.

Wei Ran, head of Alibaba International Station's fulfillment logistics and customs department, told China Business News: "The U.S. liner market, which is the benchmark for ocean freight rates, is generally signed between shipping companies and large customers by the end of April each year, effective May 1." At that time, spot freight rates in the market will float based on the contract price. In terms of the speed of recovery on the demand side, the watershed is expected to occur around June this year.

In Wei Ran's view, the shipping market prices and cargo volume in the experience of the violent fluctuations during the epidemic, coupled with the gradual launch of new ships, the market will usher in a restructuring. And shipping-related enterprises to take two steps, one is to pay attention to the trend of overseas production capacity supply chain to Southeast Asia outward, "this trend is continuous, should be where the goods are, freight forwarders are"; second is to strengthen China's trade service capacity, increase the core barriers, "Chinese businessmen have the ability to group goods and Supply chain service capacity, but low value-added goods do not necessarily go from China, that is, there will be more and more separation of goods and services, the formation of low value-added products by China to do trade services, overseas to do the division of labor in processing and manufacturing".

As China's B2B cross-border e-commerce platform, Alibaba International Station itself provides service trade for goods traders, and the platform will invest more in logistics services this year. In February this year, Alibaba International Station logistics services of Yiwu central warehouse online, and will be planning to set up additional central warehouse nationwide.

Alibaba International Station China suppliers and cross-border supply chain general manager Timothy Wang proposed that the development of foreign trade is entering the " high quality growth times" from the " traffic growth times". Logistics, as an important part of delivery performance, has also changed from the delivery certainty guarantee of "soaring freight prices" and "hard to find a box" during the epidemic to today's cost-effective service. End-to-end service, the second is to build a decentralized network, return to localization, improve efficiency, and find incremental volume in the stock.

According to Wang Tiantian, China's foreign trade gained momentum during the epidemic, and this increment will not completely ebb this year. At the same time, the trend of upgrading China's export products and services to higher added value, as evidenced by the higher unit price of goods, will continue.

Li Xingqian, director of the Department of Foreign Trade of the Ministry of Commerce, said at a press conference on February 2 that, on the whole, China's foreign trade in 2022 stood at a new height, releasing new momentum and making new contributions. At present, the risk of recession in the world economy rose, the growth of foreign demand slowed significantly, the international supply chain pattern is also accelerating restructuring, foreign trade development environment is extremely severe. 2023, we have to make greater efforts to promote the stability of foreign trade scale and structure, to stabilize the support role of exports to the national economy.

Data released by the National Bureau of Statistics on January 31 showed that in January this year, the manufacturing purchasing managers' index (PMI) was 50.1%, rising 3.1 percentage points from the previous month, rising above the critical point, and the manufacturing boom level rebounded significantly. However, Hongta Securities suggested that the manufacturing new export orders index was 46.1%, which was below the Rongkuk line and only 1.9 percentage points higher than the previous month.

In a press conference held at the State Council Information Office on January 13, General Administration of Customs spokesman Lv Daliang said that the foundation of China's economic recovery is not yet solid, the external environment is volatile, the world economy downward pressure is increasing, the development of China's foreign trade is still facing more difficult challenges. Facing the difficulties and challenges, but also to see China's economic resilience, potential, vitality, long-term positive fundamentals remain unchanged, the economy is expected to generally rebound in 2023, to more firmly promote the stability of foreign trade scale, excellent structure of confidence.