Lower freight charges are one of the key reasons behind a steep drop in Chinese tyre prices. These freight costs have been decreasing steadily over the last few months and have contributed significantly to a gradual increase in foreign orders for Chinese tire makers and traders.
In fact, it has been observed that the slow and steady decline in order processing times is a direct reflection of the robustness of the supply chain as well as economic growth stability in China. This is also welcome news for many tyre wholesalers and tyre importers since it paints a rosy picture of China’s tyre export trade. It also means that the future outlook is highly positive with regard to the first half of next year.
This trend is evident from the steep rise in demand for rapid custom clearance for all kinds of goods including different kinds of PCR to TBR and LTR tyres. All such demand is directly attributed to steadily declining shipping charges and other rates.
Better Supply Chain Operations
The decrease in freight charges did not occur in a vacuum. On the contrary, it is largely due to the increasing efficiency of the entirety of the shipping supply chain. The Chinese tyre industry is rapidly achieving a semblance of normalcy as increasingly greater numbers of workers are showing up on the factory floors and on the docks, and the COIVD19 pandemic recedes into memory.
This applies to the rest of the world as well. Greater demand for tyres has led to a corresponding increase in production levels in China. This is a highly positive signal. One that showcases the fact that Chinese tyre exporters have once again resumed full-fledged production. This, in turn, has led to greater economies of scale concerning port transportation costs.
Apart from that, shipping containers are far more easily available than they were a few months back. Instead of waiting for months for the availability of a single container, multiple containers can be booked easily.
All in all, this is the perfect time to invest in the tyre market and reap the returns of such low freight and product costs.
