Business
Ocean Freight Rates from China Expected to Dip Amid Overcapacity and Reduced Demand: A Bleak Outlook for 2024
Ocean shipping costs from China are likely to drop due to decreasing demand and surplus capacity. The future appears grim for the upcoming two months as China's exportation slows down and the sector introduces an unprecedented level of new capacity in 2024.
The future of the shipping industry is uncertain due to increased geopolitical conflicts and fears of economic downturn in certain global areas, according to Cai Huixing, the president of Shanghai Shipowners' Association. He mentioned this during a press briefing on Thursday.
"He stated that the final quarter is typically a slow period for sea cargo. He anticipates a decline in shipping costs. However, as vessel owners take measures to address the excess capacity issue, the prices are projected to recover by 2025."
The expense of transporting a 20-foot equivalent unit (TEU) container from Shanghai to Europe has dropped from over US$5,000 since July. Exporters have preemptively sent out shipments for the holiday season to circumvent increased US tariffs and dodge interruption in the Red Sea due to ship attacks by Yemen’s Houthi rebels.
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Chinese pubs express caution following the introduction of fresh tariffs on European brandy imports.
Cai's comments mirrored predictions made earlier this week by international cargo reservation system Freightos, which suggested that sea freight companies might face challenging conditions until the end of 2024 due to low freight rates. However, the potential for escalated conflict in the Middle East could drive up the cost of container shipping.
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