01
The peak season is not prosperous, and the port is not blocked?
After the outbreak of the global epidemic, international freight rates soared due to supply chain disruptions, port backlog and surge in goods, and a number of shipping companies made a lot of money. At the beginning of the year, a news report that " Evergreen Sea Freight year-end bonus was given 40 months of monthly salary" made people call it "too rich"...
However, according to data released by the Shanghai Aviation Exchange on September 23, the latest Shanghai Export Container Freight Index (SCFI) fell 240.61 points to 2072.04 points, a weekly decline of 10.40%, a 15-week decline, down 15 consecutive weeks, down nearly 60% from the historical high of 5109 points at the beginning of the year.
and according to data from the Baltic Sea Transport Exchange, in January this year, the price of a 40-foot container from the Chinese to West Coast route on the United States was about US$10,000, and the price in August was about US$4,000, a 60% drop, compared with the average price of US$20,000 at last year's highest point, a drop of more than 80%. The Thai-Vietnam route market in Southeast Asia fluctuates greatly. Due to the large gap in freight demand for routes, it fell by 37.1% in a single week. The price of booking in spot market fell sharply, and even a small amount of zero freight and negative freight are encountered.
In addition to the plummeting price of sea freight, there is no large queue at famous ports around the world.
According to data from Freight Waves, the supply chain platform agency, it is difficult to see hundreds of ships waiting to berth in globally renowned ports such as Los Angeles, Boracay, and Rotterdam . again. As of August 29 this year, Los Angeles Port had 501.76 million containers, while in late November last year, the number was as high as 903.97 million; on that day, only 8 container ships were waiting to dock at the ports near Southern California , while at the same time last year, the number was 48.
02
Behind the plummeting sea freight prices
According to the usual rules, July to September is the traditional peak season for my country's cargo exports, and container freight rates should also rise, but according to the current situation, the sea freight rates are plummeting. What does this mean?
The demand in Europe and the United States has decreased, and freight volume has decreased
According to the past, it is currently in the peak season for export trade, but China's foreign trade data shows that in August, China's total export amount was US$314.92 billion, a month-on-month decrease of 5.3% compared with July. Among them, China's exports to the United States and Europe in August were US$49.77 billion and US$5.135 million, respectively, while the relevant exports in July were US$53.39 billion and US$55.04 billion, a decrease of approximately US$3.62 billion and US$3.69 billion, respectively, and exports were much lower than expected. This shows that demand in the European and American markets is decreasing.
In August this year, Walmart said it canceled orders of billions of dollars; shortly after that, another retailer Target said it canceled orders of more than $1.5 billion. These retailers are the most sensitive to the market trend. Their large-scale cancellation of orders means that the procurement and consumption capacity of European and American countries are shrinking.
During the epidemic, some materials in some countries were cut off due to supply chain breaks, and a "stocking wave" occurred in many countries, which also led to abnormally high shipping costs last year. This year, due to the high pressure on global economic inflation, demand has declined. At the same time, the previously hoarded inventory market cannot be digested, which has caused European and American importers to reduce or even cancel goods orders. The "order shortage" spreads around the world, which has also led to a relatively reduction in global freight volume.
Global shipping turnover has increased, and capacity has increased
Chief Information Officer of Shanghai International Shipping Research Center CIO Xu Kai once said that port and shipping big data showed that in the third quarter of last year, about 30% of the global container ship was in a berth, and this proportion fell to about 26% during the same period this year. This shows that the global shipping turnover capacity has improved; on the other hand, the demand for capacity in global commodity trade has decreased, so it is inevitable that freight rates will fall.
In addition, the launch of a large number of new ships by shipping giants has further exacerbated the gap between supply and demand.
Last year's abnormally high freight costs made many shipping companies make a fortune, and some large shipping companies will invest their profits in new ships. Before the epidemic, global shipping capacity was already higher than the volume. " Wall Street Journal " quoted energy and ship consulting company Braemar as saying that a series of new ships will be launched in the next two years, and the fleet net growth rate is expected to exceed 9% next year and 2024, while the year-on-year growth rate of container freight will turn to negative in 2023, which will further intensify the imbalance between global capacity and transportation volume of .
03
Cross-border sellers need to be wary of what
Although the current sea freight cost plummeted, it is still slightly higher than the level before the epidemic. Taking into account the current global inflation rate, soaring oil prices, rising prices and other factors, the current freight price is considered within a reasonable range. But judging from the current global economic situation, the downward trend of sea freight is certain.
Founder Medium Futures Research Report also stated that this year, global container capacity increased by 3.9% year-on-year in the third quarter, which was at a moderate level in the past seven years, but due to sluggish demand, the capacity idle rate has reached its peak in the past five years. The global shipping market in the fourth quarter is still not optimistic, and there will be a market that is not prosperous in the peak season.
So, in the face of a new round of market changes, how should cross-border enterprises respond?
1. Pay attention to emerging markets
Although the main purpose market for my country's exports is still a mature market like Europe and the United States, the high growth of Southeast Asian markets, Latin American markets and Middle East markets has also allowed us to see new markets.
Southeast Asian users are relatively young and have the motivation to consume. There are many hard demands in the local area. Latin America's per capita GDP 3 is higher than most regions in Southeast Asia, and is led by Brazilian . Last year, the country's per capita GDP is 1.43 trillion yuan, and 66% of users began shopping online and on the Internet. The average shopping price is more than US$120. We can see that these markets have development potential, and cross-border buyers can pay attention to these markets.
2, refined brand operation
2022 Cross-border e-commerce is no longer the "traffic + distribution" model. As the number of overseas users who use social media to watch videos and pictures and texts increases year by year, the consumer group will mainly focus on millennial and the Z era.
Lege Overseas warehouse believes that the steady increase of Social media marketing can provide sellers with a large number of opportunities to increase store traffic. In addition, the strong user stickiness and stability of social media marketing can also introduce more accurate segments to the brand and bring higher conversion rates.
3, multi-channel layout
In terms of channel selection . In addition to e-commerce platforms such as eBay, Walmart, and AliExpress, emerging platforms such as European e-commerce platform OTTO and African e-commerce platform TospinoMall have attracted market attention. However, in the multi-point layout of cross-border platforms, more cross-border sellers pay more attention to the DTC model of independent websites , and claim that "only by building independent websites can you truly get close to users and understand users' needs."
4, re-formulate price strategy
. As for the current US market situation, sellers can appropriately reduce investment in categories with reduced market demand, and focus their funds and manpower on categories with high ROI. For categories that have good development potential, make appropriate investments at the beginning, seek stability rather than speed. and because the American people are more sensitive to price, it is very important to the pricing and discount strategies of products.
5. Logistics: Use overseas warehouses to achieve cost reduction and efficiency improvement
Overseas warehouses use space to exchange time, and smooth production and distribution cycles through advance stocking, avoid sudden risks; move inventory forward, narrow the distance between the goods and the target sales market, facilitate marketing promotion, and improve spot trade opportunities in overseas warehouses; provide after-sales services such as return and exchange, repair, etc., reduce merchants' operating costs , and improve customer satisfaction.
Of course, in addition to the above suggestions, cross-border sellers also need to improve their internal business management capabilities and optimize various data indicators as much as possible to ensure the optimization of operating costs. ensures healthy cash flow , , and to cope with many uncertain risks brought by inflation in Europe and the United States.
