Ocean cargo rates fall to ‘reasonable level,’ buoying export business

Sea freight rates in China have returned to a reasonable level after reaching record highs last year and early this year amid global inflation, the epidemic and geopolitical conflicts, data from the China Federation of Logistics and Purchasing (CFLP) showed on Friday.

Domestic traders said the drop in rates, which have been a major contributor to high goods costs, can be a potential driver for sluggish overseas demand and a way to gain an edge in the world market.

The average reading for the export container freight index in August was 3,033.60 points, down 6.4 percent from the average of the previous month.

He Liming, CFLP president, told reporters on Friday that the declines were reasonable in light of record high rates caused by insufficient capacity in the previous period.

The drops “will improve the competitiveness of our enterprises, especially export enterprises,” He said.

Zhong Zhechao, founder of One Shipping, an international logistics service consulting firm, told the Global Times on Friday that lower freight rates are definitely good news for exporters, because cargo rates represent a fairly large part of total costs – even more at times than the value of the goods.

The impact of lower cargo rates has already been partially reflected in rising container throughput in the Yangtze River Delta, China’s production and trade hub.

In addition to Shanghai port, which was partially affected by the epidemic, other ports in the Yangtze River Delta saw double-digit growth from January to August.

Among them, Ningbo Zhoushan port, the world leader in throughput, handled 23.7 million standard containers, up 10.9 percent year-onyear, according to data that the port sent to the Global Times on Friday.