{"id":5311,"date":"2022-12-19T08:00:41","date_gmt":"2022-12-19T08:00:41","guid":{"rendered":"http:\/\/siships.com\/blog\/?p=5311"},"modified":"2022-12-19T15:42:49","modified_gmt":"2022-12-19T15:42:49","slug":"weakening-shipping-demand-ahead-of-chinese-new-year","status":"publish","type":"post","link":"https:\/\/siships.com\/blog\/weakening-shipping-demand-ahead-of-chinese-new-year\/","title":{"rendered":"Weakening Shipping Demand Ahead of Chinese New Year"},"content":{"rendered":"<p>[vc_row full_width=&#8221;stretch_row_content_no_spaces&#8221; el_class=&#8221;blog_first_row&#8221;][vc_column][vc_custom_heading text=&#8221;Weakening Shipping Demand Ahead of Chinese New Year&#8221; font_container=&#8221;tag:h1|text_align:left&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:700%20bold%20regular%3A700%3Anormal&#8221; el_class=&#8221;blog_detail_heading&#8221;][vc_single_image image=&#8221;5313&#8243; img_size=&#8221;full&#8221; el_class=&#8221;blog_detail_img&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=&#8221;Softening Market Indicates Uncertain Future&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:500%20bold%20regular%3A500%3Anormal&#8221; el_class=&#8221;blog_detail_heading&#8221;][vc_wp_text]<span style=\"font-weight: 400;\">The global supply chain continues its trend of surprise and unpredictability. Following a relatively quiet quarter, shipping demand looks to soften even more as the calendar turns to 2023. Historically, the holiday surge continues into January as buyers and shippers try to get ahead before the <a href=\"http:\/\/siships.com\/blog\/post-chinese-new-year-shipping-outlook\/\" target=\"_blank\" rel=\"noopener\">Chinese New Year <\/a><\/span><span style=\"font-weight: 400;\">festivities.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Late January and early February are always a sensitive time for international business in Asia, because all factories and ports close for two weeks. Employees will travel home to visit family. Even when the factories officially reopen after the holiday, it takes time for production to ramp back up. These anticipated delays usually translate to buyers stocking up in early January. The same was expected this year, especially with <a href=\"https:\/\/www.bloomberg.com\/news\/newsletters\/2022-12-15\/supply-chain-latest-container-shipping-rates-search-for-a-bottom\" target=\"_blank\" rel=\"noopener\">shipping times <\/a><\/span><span style=\"font-weight: 400;\">peaking at 110 days from Asia to the United States. However, due to a combination of factors, including inflation contracting the global economy, that is not the case. On the positive side, the weakening shipping demand means prices are falling and shipping times are finally coming down.<\/span>[\/vc_wp_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243; el_class=&#8221;left_cont&#8221;][vc_custom_heading text=&#8221;Freight Rates Have Fallen Sharply&#8221; font_container=&#8221;tag:h3|text_align:left&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:400%20regular%3A400%3Anormal&#8221;][vc_wp_text]<span style=\"font-weight: 400;\">Industry experts expected a market correction at some point. The shipping industry is cyclical, like all industries. It was only natural that the peak pricing from 2021 would return to normal as the world learned to deal with coronavirus. But nobody anticipated it arriving so soon and so acutely.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Spot rates for 40-foot containers for passage between Hong Kong and Los Angeles are significantly lower year over year in December 2021. In some instances, rates are below the average from 2015. This presents a major shock to the system. With the future murky, this is a rare opportunity for buyers to expand margins before rates rise again.<\/span>[\/vc_wp_text][vc_custom_heading text=&#8221;Covid Still Has a Stranglehold on the Middle Kingdom&#8221; font_container=&#8221;tag:h3|text_align:left&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:400%20regular%3A400%3Anormal&#8221;][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_single_image image=&#8221;5312&#8243; img_size=&#8221;full&#8221; el_class=&#8221;blog_detail_img&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_wp_text]<span style=\"font-weight: 400;\">Adding to the calculus is the evolving Covid response in China. The Chinese government finally acquiesced after weeks of protest to relax their \u201czero-Covid\u201d policy. The irony on the ground is public commerce has come to a standstill in major cities, as citizens brace for an all but certain Covid outbreak. <a href=\"https:\/\/www.cnn.com\/2022\/12\/14\/china\/beijing-zero-covid-easing-streets-impact-intl-hnk-mic\/index.html\" target=\"_blank\" rel=\"noopener\">Beijing <\/a><\/span><span style=\"font-weight: 400;\">is described as a ghost town and people are scrambling to prepare themselves for the worst.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Chinese New Year is a time when streets are filled with revelers, but those celebrations might have to be put on hold if the Covid response is still lacking. Alternatively, factories might face staffing issues during the restart if there is a Covid outbreak during the Lunar New Year festivities.<\/span>[\/vc_wp_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_single_image image=&#8221;5314&#8243; img_size=&#8221;full&#8221; el_class=&#8221;blog_detail_img&#8221;][\/vc_column][vc_column width=&#8221;1\/2&#8243; el_class=&#8221;left_cont&#8221;][vc_custom_heading text=&#8221;Potential for a Price War&#8221; font_container=&#8221;tag:h3|text_align:left&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:400%20regular%3A400%3Anormal&#8221;][vc_wp_text]<span style=\"font-weight: 400;\">Inflation has put a damper on the holiday season in the United States, but 2023 could be a good time to be a buyer. Or, at least, a good time to be importing international goods. There are rumors bubbling of an impending price war between major shipping lines.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Freight forwarders and governments rushed to increase capacity of containers, ports, and more during Covid. Capacity is no longer an issue, with the drop in demand. Major shipping lines will do whatever they can to attract customers. This could also be a year of consolidation with larger players looking to swallow up smaller companies.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThere is a high possibility of an all-out price war,\u201d Christian Roeloffs, co-founder and CEO of <a href=\"https:\/\/www.container-xchange.com\/\" target=\"_blank\" rel=\"noopener\">Container xChange <\/a><\/span><span style=\"font-weight: 400;\">stated. \u201cWith the competitive dynamics in the container shipping and liner industry, I don\u2019t expect especially the big players to hold back, and we do expect prices to come down to almost variable costs.\u201d No need to feel too bad for the shipping lines as a whole, though. They pocketed a reported $122 billion in profits from January to September 2022.<\/span>[\/vc_wp_text][\/vc_column][\/vc_row][vc_row el_class=&#8221;third_row&#8221;][vc_column][vc_custom_heading text=&#8221;How SiShips Gives You the Advantage&#8221; font_container=&#8221;tag:h4|text_align:left&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:300%20light%20regular%3A300%3Anormal&#8221;][vc_wp_text]<span style=\"font-weight: 400;\">Sheltered International combines expertise with state of the art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To learn more about managed transportation with SiShips, or to view a demo of our software, <a href=\"https:\/\/siships.com\/contact\" target=\"_blank\" rel=\"noopener\">contact us<\/a><\/span><span style=\"font-weight: 400;\">\u00a0today.<\/span>[\/vc_wp_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row full_width=&#8221;stretch_row_content_no_spaces&#8221; el_class=&#8221;blog_first_row&#8221;][vc_column][vc_custom_heading text=&#8221;Weakening Shipping Demand Ahead of Chinese New Year&#8221; font_container=&#8221;tag:h1|text_align:left&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:700%20bold%20regular%3A700%3Anormal&#8221; el_class=&#8221;blog_detail_heading&#8221;][vc_single_image image=&#8221;5313&#8243; img_size=&#8221;full&#8221; el_class=&#8221;blog_detail_img&#8221;][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=&#8221;Softening Market Indicates Uncertain Future&#8221; google_fonts=&#8221;font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:500%20bold%20regular%3A500%3Anormal&#8221; el_class=&#8221;blog_detail_heading&#8221;][vc_wp_text]The global supply chain continues its trend [&hellip;]<\/p>\n","protected":false},"author":186,"featured_media":5313,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[24,1],"tags":[40,30,50],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v18.5.1 - 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