WHAT IS THE IMPACT OF OFF-SEASON AND PEAK SEASON ON CHINA’S EXPORT SHIPPING PRICES?
Price level：
Off-season: Generally speaking, the demand for shipping market is relatively low during the off-season, and the supply of shipping capacity is relatively sufficient. In order to attract goods and increase loading rates, shipping companies will reduce shipping prices to win more customers and orders. Therefore, during the off-season, shipping prices are usually at a relatively low level, and the transportation costs of enterprises are also relatively low. For example, at the beginning of each year, for a period of time after the Spring Festival, and during some traditional trade off-seasons, shipping prices will decline to a certain extent.
Peak season: During the peak season, the market demand is strong, the cargo transportation volume increases significantly, and the growth rate of shipping capacity may not keep up with the growth rate of demand, resulting in a shortage of shipping capacity. In this case, shipping companies have stronger bargaining power and will increase shipping prices. For example, the Christmas season in European and American countries, the months before large-scale promotional activities such as Black Friday, and the peak sales season of some industries are all peak seasons for shipping, and shipping prices will rise significantly.
Price fluctuation range:
Off-season: During the off-season, due to the relatively stable market demand, the fluctuation range of shipping prices is usually small. Even if affected by some external factors, such as fuel price fluctuations and exchange rate changes, the price changes will not be too drastic. However, if there are some sudden major events, such as geopolitical conflicts, natural disasters, etc., it may have a greater impact on shipping prices in the short term, but this impact is relatively short-lived.
Peak season: The fluctuation of shipping prices is larger during the peak season. On the one hand, the rapid growth of market demand will drive up prices; on the other hand, factors such as shipping company capacity adjustment and route arrangement will also affect price fluctuations. In addition, some shipping companies may frequently adjust prices according to market conditions, issue price increase notices or impose peak season surcharges, etc., resulting in more drastic fluctuations in shipping prices.
Route price differences:
Off-season: In the off-season, the price difference between different routes may be relatively small. The prices of some unpopular routes or non-major trade routes may drop more due to insufficient overall market demand, but the prices of popular routes will not be too high. For example, some routes to smaller economies or regions with less trade volume may be cheaper during the off-season to attract more goods.
Peak season: In the peak season, the price increase of popular routes and major trade routes will be greater. For example, the routes to developed economies such as Europe and the United States, due to the huge consumer market in these regions, the demand for Chinese goods has increased sharply during the peak season, resulting in a sharp increase in the shipping prices of these routes. For some relatively unpopular routes, although the prices may also increase, the increase will be relatively small.
Contract price and spot price:
Off-season: In the off-season, the advantages of enterprises signing long-term contracts with shipping companies may not be obvious, because the spot market price is also relatively low, and enterprises can flexibly choose transportation methods and shipping companies according to actual needs. In addition, in order to maintain a long-term cooperative relationship with customers, shipping companies may give certain price discounts when signing long-term contracts, but the discount may not be as large as in the peak season.
Peak season: In the peak season, the stability of long-term contract prices is particularly important. If enterprises sign long-term contracts with shipping companies in advance, they can avoid the impact of sharp increases in spot market prices to a certain extent and reduce the uncertainty of transportation costs. For enterprises that have not signed long-term contracts, they can only pay higher shipping costs according to spot market prices, which will increase the cost pressure of enterprises.
