Introduction:
Tight capacity and high freight rates not only squeeze the profits of upstream and downstream enterprises, making it difficult for them to move forward, but also cause congestion in the global supply chain, slow down the efficiency of the global industrial chain, and bring huge pressure to international trade and international logistics.

Behind the prosperity of the industry, there are both crises and risks, and enterprises need to be prepared for a "protracted war".


(Image from the Internet)

When will freight rates come down?

The shortage of capacity and how long high freight prices can be maintained have become the focus of attention of everyone in the industry.

Affected by the epidemic, the global economy and trade are unbalanced, many overseas orders have returned, and the volume of export trade has increased rapidly, leading to the embarrassing scene that China's exports are far greater than its import trade, and containers only go out but not in.

At present, the situation of the mutation of the epidemic, no one can predict the development of the epidemic in the future, the epidemic prevention and control is long-term, not just a few months can be controlled, and the impact on the industry will be long-term and sustainable. For shipping prices, although the current trend of container prices is relatively stable, the high trend of shipping freight will still be maintained.

It will take at least some time for the freight rate to return to the previous position of about $2,000 for a cabinet, and the specific situation will be determined according to the overseas epidemic prevention and control situation.

If the overseas epidemic can be controlled, freight rates may decline in the short term, but it is expected to take more than 1-2 years to recover. Regarding the imbalance of global shipping supply and demand, the Securities Times article gives the following views: China Merchants Securities believes that the high prosperity of the container industry is closely related to the consolidation industry, the recovery of the container and shipping industry is related to the US dollar cycle, shipping cycle, container renewal, ship cycle and other factors, and the industry is a long-term recovery of 2-3 years, not the short-term impact of the epidemic.

Citic Construction Investment Research Report pointed out that the super peak season demand for consolidated transportation is strong, under the influence of the epidemic and various events, the global supply chain disorder is aggravated, and the imbalance between supply and demand is further aggravated, although some regional capacity is invested in trunk transportation, the overall effective capacity of the market has not shown signs of expansion.

At the same time, the repeated epidemic in Asia, resulting in the chaos of ship schedules, off-duty and other conditions are still ferment, the continuity of the supply chain of the port of departure is further hindered, and the operational efficiency of European and American ports is further reduced and other factors, the contradiction between supply and demand in the maritime market will be further aggravated in the short term.

The air freight price depends on the market supply and demand relationship, if the air capacity continues to be tight, then the high freight rate will continue to maintain.

According to the predictions of IATA and Airbus and other organizations and enterprises, even if the global coronavirus epidemic is effectively controlled in the next 1-2 years, the recovery of international passenger flights and the recovery of passenger aircraft belly capacity will also need to go through a long process, and it is conservatively expected that by 2025, aviation capacity is likely to return to the pre-epidemic level.

In other words, in the next 2-3 years, international air cargo will still have to rely on all freighters to bear the main force, and the market demand for all freighters is huge.

It should be noted here that although there are currently about thousands of freighters in the world, at least 3/4 of them are in the hands of DHL, UPS, FedEx and other international express giants, and the number of all freighters in China is very small.

If someone wants to order a new all-freighter today, it will take at least 2-3 years from placing an order with a large aircraft manufacturer such as Boeing or Airbus to delivering the aircraft.

Therefore, it is foreseeable that even if the current capacity is extremely tight, in the next 2-3 years, the air transport market will not add much new capacity.

According to market research institutions such as Airbus and Global Macroeconomics, it is still a gradual recovery process from this year to the first half of next year, and it is expected that by 2022, global air traffic will return to the level before the epidemic.

However, whether these volumes are ultimately completed by the full cargo aircraft or by the belly cabin will depend on the intensity and effectiveness of the epidemic control in different regions of each country.

If the epidemic is controlled in a timely manner, and the capacity of wide-body aircraft, especially trans-continental wide-body aircraft, can be restored in a timely manner, then global air cargo will return to the previous pattern: belly and all-cargo aircraft are equally divided.

However, if the epidemic situation in various regions of the world is not controlled in time, or the control effect is not ideal, and the trans-intercontinental belly capacity fails to recover to the previous level in a short time, the demand and importance of all-cargo aircraft will be further improved.

Behind the prosperity of the industry, crisis and risk coexist, sometimes prosperity, sometimes recession, the icing on the cake during the epidemic can not be regarded as the new normal of the industry.

From a long-term point of view, any enterprise that does long-term doctrine and can traverse the industry cycle will certainly be able to achieve good development in the future.

Enterprises only in awe of the heart, with long-term doctrine in the industry, the future will eventually get their own opportunities.