Ocean freight prices from China to the U.S. and Europe significantly fell in November, reflecting weakening global demand and a warning sign for the exports of the second’s large economy.  

According to CNBC, ocean freight prices keep dropping, despite a rise in canceled sailings from China to the U.S., which cut the number of vessels and reduced their ability to ship exports. 

The news outlet cited data from Freighto, showing that freight prices from China to the U.S.’s West coast are 90% lower than last year, while the rate to Europe is 73% lower than a year ago. 

Xeneta’s global XSI tracked a fall of 5.7% in the ocean freight contract market in November. This is the third monthly decline in a row and the largest month-over-month drop since 2019.

Peter Sand, a chief analyst at Xeneta, said. “For many carriers, the fall in the XSI will trigger the fall in their average rates and will bring an end to record-breaking quarters.”

Xeneta data shows that 85% of customers plan to reduce ocean freight spending in 2023. 

According to data from BIMCO, as customers cancel and withdraw orders, global container volumes have fallen 9.3% from a year ago, causing an overcapacity.

Lower-than-expected exports in November also hurt freight prices due to lower orders. 

According to Reuters, China’s November exports shrank 8.7% from a year ago, much deeper than a 0.3% decline in October. The figure reflects the weakest performance since February 2020 and is much below Reuters’ analysts’ expectations for a 3.5% decrease.CNBC Supply Chain Heat Map data shows that U.S. manufacturing orders in China have shrunk by 40%. Consequently, Worldwide Logistics believes Chinese plants will cease operations half a month earlier than usual for the Chinese New Year.

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