With an enormous decrease from the historic high, the industry believes that the market starts to recover from the chaos due to the pandemic.

Due to the pandemic, the international spot rate has risen to its historic high in the most recent months and consequently drove up the stock prices of several big container lines. However, Spot rates from Ningbo and Shanghai to the west coast of the U.S. has fallen sharply from $20,586/TEU to $17,970/TEU, which has equalled the growth of three months, according to the Freightos Baltic Index.

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The big retreat from the peak may be a result of the release of new-built containers.

The escalating spot rates are strongly associated with the shortage of containers. Severe port congestions occurring in the world’s main ports cut down the turnover of the empty containers, and therefore enforce the shippers to bid for the limited amount of containers with exorbitant prices. Notwithstanding, the release of newly-built containers capacity has largely alleviated the relentless shortage of vacant containers and stimulate the container turnover in China.

As a result, the market is suspicious that COSCO can continue to grow in the future.

Despite reporting a net profit of $5.7 billion in the first half of 2021, some investors are still skeptical about COSCO’s operating performance next year on account of the rapid fall in shipping prices. They also wonder whether the decline in global spot rates means the market is approaching the pre-pandemic level.

COSCO has replied that it will establish a more stable bond with clients and improve its ability to prevent itself from external risks. In the meanwhile, be keen on the future trends in the international market.

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