A Portion of the Well-known Shipping Line's Prices Dropped By More Than 50%

The global container shipping market prices rose from 2019 to 2021, more than five times the previous ten years. Many practitioners lamented that "a year to earn the money of the previous ten years", but the high price of freight also makes many foreign trade enterprises "no longer able to afford".

By the middle of 2022, the feverish shipping prices finally had a cooling trend. The FBX index released by the Baltic Shipping Exchange shows that on June 29, the average FBX container shipping price was US$6,583, down 40.9% from the record high in September last year. Among them

China/Far East-North America West Coast route freight rates fell 63.1% from last year's highest rates.

China/Far East-North America East Coast route tariffs are down 54.6% from last year's highest tariffs.

The China/Far East-North Europe route is 29.4% lower than the highest rate ever recorded in January and 26.6% lower than the highest rate last year.

Take the most obvious price decline in the U.S. route, for example, which is actually behind the decline in demand from U.S. importers.

Since the epidemic, the unconventional fiscal and monetary policies of the U.S. have stimulated strong residential consumer demand but also spawned historic inflation. The U.S. Consumer Price Index (CPI) rose 1.0% in May from a year earlier and 8.6% year-on-year, a 40-year high.

With prices rising like this, Americans are in no mood to spend, so the U.S. consumer confidence index hit a record low.

On the other hand, due to the previous shipping disorder, the United States' major importers hoarded too much inventory. Data shows that U.S. retailers in the categories of furniture, housewares and appliances, building materials and gardening equipment, as well as "other general merchandise" (which includes Wal-Mart and Target), saw a record spike in their inventory-to-sales ratio.

Target, Walmart, and Macy's recently announced that they are beginning to receive large returns of outdoor furniture, home furnishings, and electronics that, in retrospect, everyone wanted but could not afford during the epidemic. The problem for retailers is that the price of sweatpants, sofas, or almost any other item will drop dramatically, and "retailers will have to offer bigger discounts to entice consumers to buy, and it's a race to the bottom in terms of profit margins to clear inventory."