When Will The International Shipping Price Fall? As A Foreign Trade Enterprise, How Should We Deal With It
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When Will The International Shipping Price Fall
Supply is rarely factored into inflation and GDP calculations by economists,
and companies tend to care more about raw materials and labor costs than transportation.
Shipping cost is only a fraction of the final price of a manufactured good:
Economists at Goldman Sachs Group Inc. calculated in March when tariffs between China and Europe were about half the current level,
that they were less than 1% internationally. Determining marginal cost is a more competitive method of evaluating a product to enter the market.
This method considers the direct personal cost of producing and selling products for export as the minimum below which prices cannot be set without loss.
The effect of the cost-plus method may be that after accounting for export costs, export prices rise within the non-competitive range.
However, costs can be reduced if the export product is a scaled-down version or produced without increasing the fixed costs of domestic production.
For example, additional costs may be incurred due to modifying products for export markets.
The report notes that cheaper goods will proportionally rise in price more than more expensive ones
and that poor countries producing low value-added goods such as furniture and textiles will suffer the biggest blow to competitiveness.
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This relatively small projected decline in exports is due to the fact that the countries of these regions are highly dependent on energy exports,
the demand for which is practically independent of price fluctuations. Trade is likely to contract faster in industries with complex value chains,
especially electronics and automotive. The 0.5% drop in the cost of transport services could reflect the weakening of freight traffic due to trade disputes between major economies.
Changes in demand for products as countries recover unevenly and emerge from the pandemic blockade have led to a sharp increase in the cost of shipping both raw materials and manufactured goods.
As demand for shipping has skyrocketed, carriers have become choosier about what they carry,
avoiding hazardous chemicals and heavier products that drive up fuel costs for ships.
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