Container Archives

January 16, 2021 / By TJ China Freight / Shipping

The world is short of 500,000TEU containers, and the container supply chain is in a big dilemma

Flexport, a freight forwarding company based in the United States, said that it is now necessary to produce 500,000 new 20-foot containers to alleviate the current disruption to the global container supply chain due to lack of container equipment.

Nerijus Poskus, Flexport's vice president of global shipping, estimated in an interview with Bloomberg that hundreds of thousands of new containers will be needed to meet current market demand.

Nerijus Poskus told Bloomberg, “In order to alleviate the current container supply chain dilemma, at least 500,000 new containers need to be built around the world, which is equivalent to the number of 25 largest container ships in the world.”

The vice president of Flexport also said that the surge in demand has also caused the spot freight rate for a standard container across the Pacific to quadruple. This figure does not include additional costs related to equipment and insurance premiums to guarantee loading.

Due to the tight container supply chain, Volkswagen AG was forced to cut its production plan for the world’s largest car factory in Germany, and warned that the tight supply may spread to the world; Honda Motor Co. is also cutting five times. The output of the North American plant is difficult to purchase automotive chips.

Rob Subbaraman, global head of macro research at Nomura Holdings in Singapore, said, "Supply bottlenecks seem to be more pronounced in the United States and Europe, as their supply delivery time has recently slowed down again." "This is not good for Western industrial production and should lead to inventories. A steeper decline and put upward pressure on output prices."

"Anyone who pays for shipping in 2020 knows that the true cost of shipping is even much higher than the recent increase in shipping. We expect this number to only increase in 2021."

Maersk: Congestion in the container supply chain will not improve in the near future

A Maersk executive said that in the reality of strong demand, there is almost no excess capacity in container ships , and the congested supply chain can hardly be alleviated.

Maersk Line’s parent company AP Moller-Maersk A/S Latin America and the Caribbean Senior Vice President Fan Chuyan Robbert van Trooijen recently stated that the demand for container shipping services may still remain at an unusually high level in the near future. With almost no remaining container capacity, carriers and shippers will have to continue to adapt to the tight situation of the container supply chain caused by the pandemic.

Fan Chuyan also said that factories in China and other parts of Asia have increased production because their customers in other parts of the world are rebuilding inventory that was depleted due to the suspension of production at Chinese factories early last year.

He also introduced that at the same time, the current idle capacity of the container shipping industry is at a historical low of about 1.5% , so there will be almost no additional capacity to be used in the market in the short term.

In fact, according to the latest data provided by Alphaliner, as of December 21, 2020, the global proportion of inactive containers is only about 1% , taking into account that it includes ship docking maintenance, installation of desulfurization equipment and ballast water systems, etc. Situation, this is already the lowest level in history.

He said: "In the foreseeable future, the current supply and demand situation will not change significantly, because there is not enough new ship order capacity." "This (tight supply chain) situation may continue for some time."

The executive said that compared with the existing fleet, the current capacity ratio of new container ship orders is at the lowest level in history.

Due to the imbalance between supply and demand, we have also seen a sharp increase in container freight rates recently. Fan Chuyan refused to disclose his views on recent freight rates.

With the arrival of the Chinese Lunar New Year, workers need to return to their hometowns to visit relatives. After the Spring Festival holiday in February, the flow of Chinese manufactured goods to other parts of the world may temporarily stagnate. But he also emphasized that demand may remain high.

For example, Xinde Maritime.com has placed an order for 18 ships of 24000TEU! Will the shipping fee be reduced? According to the article, due to the relatively sluggish state of the container shipping industry in recent years and the uncertainty about future fuel selection, container shipping companies and shipowners have previously maintained a more cautious attitude towards ordering new ships.

According to data provided by Alphaliner, Maersk, the world's largest container shipping company, has been busy in business transformation in recent years, and currently does not have many new ship orders.

Fan Chuyan said that Maersk will not have a significant new capacity put into operation in the future , but will focus on opening up various nodes and improving the flow of goods on land and sea.

He also revealed that Maersk hopes to expand its logistics business in the region through organic and acquisition. He declined to say which acquisition method the company will consider. In the past few years, Maersk has made investments and acquisitions in areas such as customs declaration and inland logistics.

Brazil is a major exporter of commodities, and China's demand for these commodities is very strong, the most famous of which are soybeans and iron ore. These commodities are usually transported by dry bulk carriers, and Maersk does not use dry bulk carriers in its fleet. But Brazil is also a big buyer of Chinese manufactured goods shipped in containers.

Fan Chuyan introduced that the current supply of containers on this route is severely short, and the strategies adopted by some customers to bypass congested nodes have exacerbated this situation. He said that "some customers book two or three different" carriers to make sure they can move goods into or out of the country. "

He said that the company is working closely with some major customers to make operations smooth, including implementing a new system that will ensure that they have space and prevent overbooking.

Super congested Port of Los Angeles

Satellite AIS ship tracking data shows that currently about 30 container ships are parked at two ports near Los Angeles waiting for berths, and there are about 20 before Christmas. Los Angeles is the busiest gateway for American goods trade.

Logistics media American Shipper recently interviewed Kip Louttit, executive director of the Southern California Shipping Exchange, to understand the latest situation of ship congestion in San Pedro Bay.

He said that as of noon on Wednesday, 91 ships were in the port, of which 46 were at berths and 45 were at anchorages. Among them, 56 are container ships, 24 are at berth and 32 are at anchor.

It also introduced that several container ships will be anchored at the port on Friday, and the total number of anchorages will reach 37. But Louttit said, "From January 1 to today, there has been no significant change."

Louttit confirmed that the ship has actually filled up all available anchorages near Los Angeles and Long Beach. Ships also occupied 6 of 10 emergency anchorages near Huntington, south of San Pedro. If all the emergency anchorages are also occupied, then the newly arrived ships will have to go deeper offshore for drifting.

Yesterday, the captain of a container ship about to go to the Port of Los Angeles said that our ship had just left the Port of Busan and received news that it was expected to wait at least 4-5 days at the anchorage.

The fact that so many ships are anchored in the waters of the Los Angeles port also reflects the degree of congestion in the container supply chain. The last time so many ships anchored there was between 2014 and 2015, when the workers of the Port of Long Beach in Los Angeles went on strike for a period of time.

"On March 14, 2015, there were 28 container ships at anchor on the highest peak at that time. Looking at it now, this record has been broken," Loutitt said.

In a warning letter issued to customers this week, Germany’s largest container shipping company Hapag-Lloyd reported: “Due to the surge in imports, all terminals in (Los Angeles/Long Beach) continue to be crowded. (This) is expected to continue until February. ."

Hapag-Lloyd also stated that “the staff at the terminal is limited” and claimed that this is related to COVID-19. "This labor shortage affects a series of operations such as TAT (turnaround time) truck drivers at all terminals and transfers between terminals."

Hapag-Lloyd also confirmed that the congestion problem has spread beyond California ports. The company reported that “serious congestion” has also occurred in Canadian ports. “The berth congestion at Maher Wharf and APM Wharf (New York and New Jersey Ports) also affected all routes, and ships had to face several days of delay after arrival.”

January 15, 2021 / By TJ China Freight / Shipping

Do you know all these 10 documents in the process of container transportation?

In addition to the three main orders of "equipment handover form", "station receipt" and "handover record", container transportation usually includes the following 10 types of documents.

(1) Booking form

The booking list is prepared by the shipping company or other carrier when accepting the shipper's (or shipper's) booking, according to the shipper’s verbal or written application, recording the cargo consignment, and used to arrange container cargo transportation. The main contents of the documents and booking list include: cargo name, number of packages, packaging style, mark, weight, size, port of destination, settlement period, transshipment period, whether it can be transported in batches, transshipment, etc.

(2) Booking list

The booking list is a list of the delivery and loading places of different goods drawn by the shipping company or its agent according to the contents of the booking form.

(3) Packing list

The packing list is the only document that details the name, quantity and stowage of the goods in each container. When the container is used as a unit for transportation, the container packing list is an extremely important document. It is the basis for cargo declaration, handover, etc. The weight of the cargo and the container recorded on the document is used to calculate the ship’s draught difference and stability. Basic data of sex. When cargo damage or cargo difference occurs, it is also one of the original basis for handling accident claims.

(4) Annotation list

When the container terminal yard or container freight station receives goods, if the goods are found to be abnormal, the content and extent of the abnormality should be recorded in the remarks column of the station receipt, and then a document is compiled based on these contents. This document is called the endorsement list.

(5) Shipping order

The bill of lading is a document signed and sealed by the carrier or its agent. It is not only a certificate for consignment of the goods, but also a certificate for notifying the ship to accept the shipment of the carried goods.

(6) Loading list

The loading list is the cargo consigned by the carrier or its agent according to this voyage. The goods of similar nature are classified according to the order of arrival at the port, and then a summary list of loading orders is made.

(7) Bill of lading

The bill of lading is a certificate issued to the shipper or shipper by the container transport operator or its agent after receiving or taking over the goods, proving that the transported goods have been received or loaded on the ship, and are to be transported by sea. The port delivers the goods to the legitimate bill of lading holder. It is also a kind of transportation contract between the transportation company and the owner, which reflects the right of the recorded direction of the goods. It is usually circulated by endorsement, which is a pledge. The main ancillary documents of the remittance bill are divided into the bill of lading and the bill of lading for receipt.

(8) Empty container handover order

The empty container handover form is a document filled out when the shipper uses the shipping company's container, and the shipping company instructs the container custodian to deliver the empty container to the holder of this document.

(9) Guarantee

In the process of container transportation, the carrier’s responsibility is calculated from the time of receiving the goods. Therefore, the goods and container damages that have occurred before the goods are received are recorded in detail on the station receipt, and this record is transferred to the bill of lading. In fact constitutes an unclean bill of lading.

(10) Cargo Consignment Form

A container cargo consignment note is a written certificate issued by the shipper (consignor or freight forwarder) to the carrier or its agent in accordance with the relevant clauses in the first contract and the letter of credit.

January 14, 2021 / By TJ China Freight / Shipping

Global container ship freight rates soared by 80%

In the second half of last year, the rapid recovery of the shipping market caused the “hard to find one container” situation to continue after the beginning of this year-empty containers are still in demand, and some people can't order containers with 10,000 US dollars. On January 8th, at the Hudong Wharf of Waigaoqiao, Shanghai Port, the terminal production has been operating at full capacity recently. In the yard, there are a large number of containers stacked, and the number of heavy containers for storing goods is much larger than the number of empty containers. The industry believes that the shortage of empty containers and the hard-to-find situation of one container will continue for some time.

Where are the empty boxes that you can't get?

"A box is hard to find" continues to be staged, how can the market relieve the "box worries"?

Chinese shippers and freight forwarders all over the world "seeking" empty containers, but where did the empty containers go? The answer is simple, it is blocked in other ports.

While the Asian port and shipping industry is desperately desperate for empty containers, although there is a shortage of shipping capacity, price increases can be used to push shipping companies to cancel suspending, refilling, and increase shipping capacity; however, a large number of containers full of cargo are seriously stranded in European and American ports and warehouses. , Unable to move.

A British freight forwarder said, "Our customers are willing to pay such a high freight, but due to port congestion, we are still working hard to move the boxes. Some boxes have been on the dock for more than four weeks and still don’t know what Time to ship."

At the same time, urgently needed empty containers in Asia are scattered in warehouses across Europe, especially in the United Kingdom, where troubled ports have to restrict container delivery to already overcrowded terminals.

The current shortage of containers is a once-in-a-hundred-year problem in the history of global supply chains, and there is basically no solution in the short term. In recent weeks, some container ships sailed from Asia to Europe, but did not return in time, resulting in a serious shortage of empty containers.

A carrier source said: “Due to the insufficient number of containers in the warehouses in China, we have had to reduce the number of recent voyages.” All carriers report that their warehouses are severely lacking the most popular 40-foot tall containers and 40 Foot standard containers, most of the time, even 20 foot containers are in short supply.

The latest container availability index report from Container xChange shows that the availability of the entire China is "still at the lowest level in history." The report added: “Due to the rapid growth in demand after a few months of blank sailing, the current availability rate of 40-foot high cabinets in China is only 0.05 points, compared with 0.63 in the same period last year.” Data above 0.5 indicates surplus, and below 0.5 indicates deficit.

A British freight forwarder revealed that many ocean carriers (shipping companies) now refuse to accept their export bookings until mid-January. "Our customers are ready to pay for these crazy prices, but the ports are blocked. We are still trying to pull the boxes away. He said: “We have some boxes on the dock for more than four weeks, but we still don’t know when they can be unloaded. "

At the same time, urgently needed containers in Asia are scattered in warehouses across Europe, especially in the UK. In the UK, congested ports began to order to restrict containers from being shipped back to already overcrowded terminals.

“The epidemic situation in Europe and the United States still exists, and the labor force in the ports is definitely relatively short, and the speed of customs clearance will slow down. This will prevent the timely unloading of incoming goods and allow the containers that could be turned around to stay abroad for a long time." Yang Li, a retired freight forwarder, analyzed. In addition, since the third quarter, China's export business has increased in volume, which has also intensified the pressure on container demand.

Global container ship freight rates soared by 80%

The lack of containers in the market has led to soaring shipping rates, and the price increase of popular routes is even more exaggerated. Guo Shaohai, head of the International Freight Forwarding Company, said that the freight rate on the same route has doubled in the past six months. For foreign trade companies, production cannot be stopped. It is difficult to ship a large amount of goods with orders, and there is great financial pressure. The industry expects that the shortage of containers and space will continue.

Guo Shaohai said that on May 18, 2020, the sea freight from Shanghai to Long Beach on the West Coast of the United States was US$1,550 for a 40-foot container at that time. It was US$4,500 on January 7 this year.

Yan Xianjie, the sales manager of an international cargo company in Shanghai, said that the price of small cabinets will rise to more than US$4,000 per cabinet in the US West, and the US East small cabinets may have to rise to US$6,000 or 7,000, and there may be no space before the new year. . Prices in Europe continue to increase, and large cabinets may rise to US$9,800, and many customers do not have a cabinet for US$10,000.

The comprehensive index of China's export container freight rate is a "barometer" of price changes in the container transportation market. The latest data from the Shanghai Shipping Exchange show that on January 8, the comprehensive index of China's export container freight rate reported 1,753.85 points, a record high again. The average in May 2020 is only 837.74 points.

"Lianhe Zaobao" reported on January 8 that the COVID-19 pandemic has caused global port congestion and “unavailable containers”, which in turn pushed up ship freight rates soaring by about 80% within two months. The current increase has not faded.

According to the global container freight rate of Drewry, a shipping consulting company, the freight rate per TEU at the end of last year was US$4,359 (approximately S$5752), which is an increase of 75% from the level of approximately US$2500 in October last year. %.

Prior to this, a container shipping company pointed out that the current European route and Mediterranean route freight rates have reached a record high. Although the European route rises later than the US route, the rise is much faster than the US route. On December 11, the freight rate of the western US route was flat at 3948 US dollars/FEU, and the US eastern route was 4804 US dollars/FEU, which increased slightly by 2.2%, which was also approaching a historical high.

Since the fourth quarter of last year, the freight rate of the Far East to Europe route has soared rapidly. In the past two and a half months, it has risen by 152.39%, which is almost three times the difference from the low of US$725 in late April this year. Since September, the freight rate of the Far East to Europe route has exceeded 1,000 US dollars. Due to the difficulty of finding a container in the container shipping market, the rapid increase in the volume of Asian exports to Europe, and the congestion of British ports, the European line freight rate has begun to surge and is expected to exceed 3,000 US dollars this week. .

How to solve the problem of missing boxes

The shortage of containers and the sharp increase in freight rates have attracted the attention of market management departments. China's container production and sales account for 96% of the global market, and it has formed an industrial cluster with full product lines, full supply chains, and full technical capabilities. In this regard, Gao Feng, spokesperson of the Ministry of Commerce, stated at a press conference on December 3, 2020 that he will work with relevant departments to promote increased capacity allocation, support accelerated container return transportation, improve operational efficiency, and support container manufacturers to expand production capacity. . At the same time, it will increase the intensity of market supervision, strive to stabilize market prices, and provide logistics support for the steady development of foreign trade.

After experiencing industry losses in 2019 and a shortage of orders in the first half of 2020, container manufacturers have finally ushered in their own busy moments. According to a source from a large domestic container manufacturer, factory employees now have to trot to go to the toilet and eat lunch for only ten minutes, just to speed up the production progress. "We haven't encountered such a good market in many years. The whole industry is stepping up the production of new boxes, and orders have been scheduled until March next year." He said.

Qingdao CIMC Reefer Container Manufacturing Co., Ltd., located in the Shanghe Demonstration Zone in Jiaozhou, is rushing to make container orders in the workshop. "Starting from the third quarter of 2020, we have been running at full capacity to ensure growth and stable production." The relevant person in charge said that the company will gradually resume orders from the third quarter and make every effort to increase production and ensure supply. This trend is expected to continue until 2021 The first quarter.

However, people in the shipping industry predicted that the shortage of containers will continue until the first quarter of 2021. Therefore, there are already large domestic container companies that dare not rush to take orders for the second quarter of 2021.

Now that the market is in short supply, it is completely possible to launch capacity projects, purchase equipment, and let workers work overtime to produce, but in the long run, this will break the balance of supply and demand in the global container market.

At present, the service life of containers is 10 to 15 years. After the rapid one-time release of production capacity, what about next year or the next year? The development of the industrial chain still requires a long stream of water. Therefore, while moderately increasing production capacity, it is also necessary to work hard on container inventory.

For example, major shipping companies are currently stepping up to empty containers from Europe and the United States. In order to ship European and American empty containers back to Asia as soon as possible, some shipping companies in the European and American markets have tried not to take back the cargo, especially the goods exported from the US inland to Asia. If the US grain is exported in the peak season, the container will cost about in and out of the inland. Two weeks, and the grain is heavy cargo, which affects the loading of ships. In October 2020, the German Hapag-Lloyd shipping company (Hapag-Lloyd) publicly announced that it would suspend the shipping of US soybeans and other US agricultural products in containers.

Industry insiders also pointed out that alleviating the pain of the shortage of shipping containers must tap the potential and expand the capacity of the entire industry chain.

On the one hand, the inventory capacity encourages and supports domestic shipping companies to restore their capacity to the pre-epidemic level as quickly as possible. At the same time, they increase the supply of containers by opening overtime ships, deploying ships from other routes, and seeking charters from the market. Domestic shipping and logistics companies should actively coordinate overseas partners and overseas companies to improve the efficiency of international container turnover. Freight forwarders and shipping companies should actively communicate with them, and do a good job in peak-shift transportation planning and scientific management of space.

Not only that, it is necessary to seek a close connection between railway containers and shipping, allowing containers to circulate between continents, thereby reducing the cost of container use. At the policy level, it is possible to increase subsidies for shipping and land transportation companies for container return, and to issue port exchange coupons and merchant special coupons to export companies to help them reduce their freight burden.

In addition, commerce departments and customs should strengthen the supervision and supervision of shipping companies' freight rates, and conduct timely interviews and financial penalties for improper behaviors such as sudden price increases and arbitrarily asking prices.

January 13, 2021 / By TJ China Freight / Shipping

Tianjin Port fully implements electronic container import bill of lading

On January 11, it was learned from the Tianjin Municipal Transportation Commission that in order to thoroughly implement the spirit of the important instructions of General Secretary Jinping’s inspection of Tianjin Port, and firmly promote the construction of a world-class port, the Tianjin Port and Shipping Bureau will lead the organization and the Tianjin Municipal Bureau of Commerce will jointly participate. The "Electronic Platform for Container Import Bill of Lading" developed and constructed by Tianjin Port Group was officially launched in early January 2021 . So far, the three major paper documents (equipment handover list, packing list, bill of lading) for the circulation of container cargo have all been electronic.

The full implementation of the electronic bill of lading can not only provide comprehensive and multi-angle protection for data flow, but also the whole-process paperless business handling model such as online business authorization, online luggage appointment, check code paperless luggage, etc., which greatly improves the related Optimization effect of business links. On the one hand, the paper document handover link between the freight forwarder and the fleet, the fleet and the driver, and the driver and the dock is eliminated, business links are greatly reduced, and the efficiency of order processing is increased by 75%; on the other hand, the online application of electronic bill of lading solves the problem The problem of "multiple errands" that has plagued customers in the carrying business link for a long time, so that they no longer need to frequently travel between the business acceptance windows of shipping companies, shipping agents, terminals, and yards, saving related companies a lot of time and labor costs , Allowing relevant enterprises to fully appreciate the informatization work tenet of "more data runs, less people run errands".

It is understood that in 2019, Tianjin Port and Shipping Bureau promoted the establishment of a "one-code connection" logistics information data platform for import and export international containers. Tianjin Port relied on this platform to realize the information exchange of various service entities in the import and export link, and completed the container logistics chain. The information flow of links, paper handover documents have been realized paperless. However, the bill of lading, as an important document for the consignee and its agent to pick up the goods, is related to the transfer and handover of the right to pick up the goods. It has a certain effect of the property right certificate. Once an error occurs, it will bring greater risks and there are many circulation links. , The delay in achieving electronicization has become a bottleneck restricting the facilitation of cross-border trade and the improvement of port logistics efficiency.

In order to get through the last “mile” that affects the paperless process of port documents, in January 2020, Tianjin Port and Shipping Bureau, Tianjin Municipal Bureau of Commerce and Tianjin Port Group officially launched the construction of the electronic container import bill of lading project.

In the past year, Tianjin Port and Shipping Bureau, together with Tianjin Port Group and other relevant departments and units, conducted 12 special seminars on business process reengineering, information system construction, and security risk prevention and control related to the electronic bill of lading, and went to Shanghai and other domestic first-class seminars. Port study and research.

The promotion of the overall work has overcome the continuing adverse effects of the epidemic. In just 10 months, the development and construction of a complete set of information platform from concept design, application research, framework development, joint debugging and testing to formal operation was completed. It ranks among the top coastal ports in the country. During this period, under the unified organization and coordination of Tianjin Port and Shipping Bureau, relevant departments and units actively participated, accurately grasped the direction of platform construction and development, fully prepared platform operation preparations, and completed the first actual ship test on November 17, 2020 . Based on full access to test data and feedback from related shipping companies (shipping agents), freight forwarders, and port companies, the platform will be launched for trial operation on December 1, 2020, to further smooth the loading, unloading and transportation links of Tianjin Port and shore, and continue to improve the business chain The overall level of digitalization provides strong support to effectively enhance the port’s comprehensive service capabilities, continuously optimize the port’s business environment, and give full play to the important role of Tianjin Port in serving the coordinated development of Beijing-Tianjin-Hebei and the “Belt and Road” strategy to provide a strong digital guarantee !

January 12, 2021 / By TJ China Freight / Shipping

The U.S. containerized cargo imports hit a record and will usher in the busiest January in history. Will Biden take office to further stimulate demand?

The new crown pneumonia epidemic has stimulated freight demand to a certain extent. In 2020, the import volume of containerized cargo in the United States will set a new historical record, and high import demand will continue until early 2021.

Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation (NRF), said: "Even in the context of the pandemic, the US retail sales will continue to grow strongly in 2020, thanks in part to the government. Stimulus policies. Retailers expect that the economic recovery will continue in 2021."

According to the latest monthly global port tracking report released by NFR and Hackett Associates, preliminary statistics show that in December 2020, the import volume of container cargo in major US ports was 2.02 million TEU.

NRF stated that if the final figures for December 2020 remain unchanged, the U.S. containerized cargo imports in 2020 will reach 21.9 million TEU, an increase of 1.5% over 2019, and break the 2018 annual record of 21.8 million TEU.

In addition, the agency also predicts that in January 2021, this number will reach 1.96 million TEU, an increase of 7.7% year-on-year, the busiest January in history.

Looking ahead, until May 2021, the import volume of containerized goods in the United States will continue to increase substantially.

Specifically: February is expected to reach 1.6 million TEU, a year-on-year increase of 6.1%; March is 1.64 million TEU, a year-on-year increase of 19%; April is 1.76 million TEU, a year-on-year increase of 9.6%, and May is 1.86 million TEU, a year-on-year increase of up to 21.7%.

However, what worries retailers is that there is still a risk of supply chain disruption in the United States.

On the one hand, the congestion in US ports has not been significantly eased. The data shows that as of January 10, 2021, there are at least 47 ships waiting to enter the port at the anchorages outside the Port of Los Angeles and Long Beach. Among them, 34 are container ships with a total capacity of more than 270,000 TEU. The largest ship is 16022TEU.

On the other hand, as the epidemic continues to spread in the United States, the number of confirmed cases in the United States has been increasing, and a large number of logistics industry practitioners are also unable to continue working due to the diagnosis of new crown pneumonia. Many logistics parks in the United States are facing serious manpower shortages.

The Inland Empire logistics zone, located about 100 kilometers east of the Port of Los Angeles and Long Beach, has become an important extension and logistics hub of the above two ports. However, due to the high proportion of employees in warehouses and distribution centers diagnosed with new coronary pneumonia, the supply chain of the logistics park is extremely fragile.

It is also worth noting that with the US President-elect Biden will be formally sworn in on January 20, 2021, the United States may implement a trillion-dollar economic stimulus plan.

Biden once said: "In order to prevent economic collapse, we should now invest a lot of money to develop the economy, which is very necessary."

US investment bank Evercore ISI analyzed that it is expected that there will be two rounds of stimulus policies in the future. First, in the first quarter of 2021, launch a package of US$1 trillion-1.5 trillion to stimulate consumption; second, in the second quarter of 2021, launch a long-term infrastructure package of approximately US$1 trillion.

These will lay the foundation for the US consumption boom in 2021.

It is foreseeable that the US economic stimulus policy will bring more cargo volume, which is expected to directly benefit the container shipping market

January 9, 2021 / By TJ China Freight / Shipping

The container freight rate from North Asia to the UK hits a record high

On January 4, the freight rate from North Asia to the United Kingdom hit a record high. The reason was that demand continued to rise and the continued shortage of equipment plagued the market. Carriers had no choice but to increase freight rates to maintain profit margins.

The Platts Class 11 container rate from North Asia to the UK reached USD 10,000/FEU, an increase of 285% from November 30. These strong rates are expected to continue until the end of the quarter.

"This is the result of a combination of surge in demand and endless congestion. It will continue until February of the Chinese New Year." said a British freight forwarder.

Market participants are eager to avoid repeating the mistakes of the 2020 Lunar New Year holiday, because the 2020 coronavirus-related lockdown has caused a very slow recovery in China’s export demand, and for most of the past year, the container market has faced a huge Challenges.

Demand during the Chinese holiday period has recovered, which has inspired people to quickly resume work to deal with the backlog of orders, but although the situation is improving, there are some opinions in the market that worry that these optimism may be short-lived.

Nonetheless, the freight forwarder said that containers booked at lower prices have not yet been loaded onto the ship.

"I just cancelled 60 containers; they are destined to go to Europe." said a freight forwarder.

The container freight rate from North Asia to the UK hits a record high

By the end of 2020, the increase in freight rates in the UK is greater than that in Northern Europe, because companies seek to stock up on goods before the UK leaves the EU Customs Union without reaching an agreement.

Uncertainty in future trade relations and concerns about border delays due to customs inspections have led to increased demand for goods. Coupled with the change in consumer spending habits, shifting from services to consumer goods, seasonal demand before Christmas, and replenishment of enterprises after the closure of the country due to national blockades, it is difficult for ports to cope with the increase in quantity. This sentiment has continued into a new year full of congestion, and these situations are still the concerns of many operators.

Felixstowe is the largest container port in the UK. The first problem facing the port is the increase in traffic and subsequent delays. With the increase in demand, the storage capacity of the port has been reduced in recent months because the government has stored PPE (Personal Protective Equipment) in the port. However, according to a statement issued by the Port of Felixstowe on December 13, the volume of PPE containers "has been greatly reduced since reaching the peak."

Flight delays in Felixstowe caused some carriers to modify their schedules outside the port. Maersk and MSC now come to Liverpool through their transatlantic services TA2 and NEUATL2 respectively. Those carriers still calling at Felixstowe have been charged a congestion charge; Hapag-Lloyd currently charges $175/TEU for all cargo passing through the port from Asia.

A freight forwarder said that this may just be the beginning of the British disaster. They said: "Large carriers may no longer provide services to the UK, but only feeder vessels can provide services to British ports."

Carriers need to relocate empty containers, which also results in some containers no longer accepting export bookings for containers loaded from Europe in the foreseeable future, which puts pressure on exporters in the UK and Europe.

On January 4, PCR2—from the North Continent to North Asia—increased from US$1,250/FEU a month ago to US$2,450/FEU.

An airline source said: "These are theoretical figures, no one is taking reservations."

January 9, 2021 / By TJ China Freight / Shipping

Poor packaging of containerized goods causes more than $6 billion in losses to the supply chain each year

Poorly packaged containers, coupled with the shipper’s misunderstanding of the dangers of certain non-dangerous goods, may cause more than $6 billion in losses to the supply chain each year.

The well-known freight and transportation insurance company TT Club stated that “analysis consistently shows that two-thirds of accidents related to cargo damage are caused or exacerbated by bad practices when packing cargo into containers.”

And explained: "This misconduct in the supply chain has caused millions of dollars in losses, including the death of seafarers and major delays caused by container ship fires. Based on known data, all such incidents are estimated to cause economic losses of more than 6 billion US dollars each year. ."

TT Club Loss Prevention Manager Michael Yarwood added: “The danger is not limited to chemical cargoes such as paints, cosmetics, cleaning products, fertilizers, herbicides and aerosols.

"A wide variety of consumer products and parts used in the manufacture of industrial products, household white goods and automobiles, if handled improperly during transportation, could cause major disasters."

"The list is long, and often surprising-barbecue charcoal, battery-powered electronics, fireworks, hand sanitizer, wool, cotton, plant fibers, marble, granite and other building materials, fish meal, seed cakes, etc."

He said: "Enterprises involved in purchasing, importing, storing, supplying or selling such goods should ensure that their procurement and logistics standards reach the highest level."

He urged shippers to refer to the "Code of Practice for Cargo Transport Unit Packaging" ("CTU Code") jointly published by the International Maritime Organization, the International Labour Organization and the United Nations Economic Commission, which is the industry's closest regulation on container packaging.

Mr. Yarwood said: “It provides comprehensive information on all aspects of packaging and securing goods in freight containers and other modes of transportation under sea and land transportation. It can not only guide the personnel responsible for packaging and securing the goods, but also guide the collection Cargo and unpacking personnel."

He added: "This also solves the crucial issue of correctly describing and declaring goods, including any specific information about the handling of dangerous goods."

He said: "In addition to the serious health and safety risks already described above, poorly packaged containers may also cause damage to adjacent cargo in the event of an accident and cause significant consequences to the shipper."

December 31, 2020 / By TJ China Freight / Shipping

New high! The freight rate of the US West route rose to 4189 US dollars, three times that of the same period last year. Many shipping companies continue to charge surcharges

After the freight rate in the trans-Pacific market has remained stable for a period of time, it has recently started a rising mode.

According to the Freightos Baltic Daily Index (Freightos Baltic Daily Index), on December 28, 2020, the freight rate of the Asia-US West Coast route reached US$4,189/FEU, a record high, an increase of 8% from December 25, which is the year of 2019. 3 times over the same period.

At the same time, the freight rate of the Asia-US East Coast route also reached an astonishing US$5397/FEU, a 9% increase from December 25 and twice the rate of the same period in 2019.

According to data from the Shanghai Shipping Exchange, on December 25, 2020, the freight rates (sea freight and ocean freight surcharges) for exports from Shanghai to the basic port markets of the West and the East of the United States were 4,080 USD/FEU and 4,876 USD/FEU, respectively. The US West route rose 4.6% from the previous week.

Analysts of the Shanghai Shipping Exchange said that the average space utilization rate of ships on the Shanghai Port to the West and East U.S. routes maintained at a level close to full load. However, the U.S. epidemic has blocked the turnover of containers, and a large number of containers are stranded at the local terminal. The congestion of the port is increasing, and the shortage of containers has not been alleviated.

In addition, a number of shipping companies including CMA CGM, Hapag-Lloyd, Evergreen Shipping, HMM, ONE, Yangming Shipping, and Star Shipping have announced that they will start on the trans-Pacific route from January 1, 2021. , Charge a comprehensive rate increase surcharge (GRI) ranging from US$1,000 to US$1,200/FEU.

The market predicts that the upward trend of freight rates will continue until January 2021.

In contrast to the fast-growing transportation demand, after a fully loaded ship arrived at the US West Port, it faced the dilemma of nowhere to stop.

According to a report released by the Marine Exchange of Southern California on December 28, 2020, a total of 24 container ships are anchored in San Pedro Bay, and another 5 ships are about to arrive.

According to the report, the local conventional anchorages are full of ships, and some emergency anchorages have also been occupied.

Marine Traffic uses an automatic identification system to draw a map that shows the extent of the accumulation of container ships in San Pedro Bay, which has deteriorated in recent weeks.

According to statistics, 26 additional ships called at the Port of Los Angeles in November and 31 ships in December. A port manager said that it is expected that in January 2021, more additional ships will call.

The loading and unloading capacity of the Port of Los Angeles and Long Beach has already faced serious shortages. The Port of Los Angeles will import 116,500 TEU containers this week, and it is expected to increase significantly to 150,000 TEU per week by January 2021.

The continuous increase in freight rates and the severe congestion at the US West Port have caused shippers’ costs to hit unprecedented highs, and shippers have to reassess their transportation cost budgets for 2021.

December 28, 2020 / By TJ China Freight / Shipping

The shipping industry is facing the hot market, “crazy boxes” one price a day!

The shipping industry in 2020 can be said to be half winter and half summer.

Affected by the epidemic, China's exports declined in the first half of the year, and the shipping industry was cold and "overwintering" ahead of schedule. In the second half of the year, the neglected shipping industry directly entered the "midsummer." As the epidemic situation in China stabilizes and the economy recovers steadily, goods from all countries are transferred from Chinese ports. For a time, China's shipping industry is showing a busy scene.

“It’s too difficult to order containers now!” A reporter from the Securities Daily could see vehicles transporting containers coming and going at the Shanghai port. A foreign trade official who did not want to be named told the reporter: “At present, I want to order a container. The price can be said to be one price per day. Not only that, even if the container is booked, I still have to worry about the availability of the cabin."

The shipping industry is facing the hot market, "crazy boxes" one price a day!

"Shanghai SIPG, Ningbo, and Shenzhen are all major ports in the world. In 2018 and 2019, the container throughput of Shanghai Port was ranked first. Recently, the container shipping market is very hot, and many boxes cannot be returned after they go out." People from listed companies commented on the reporter of "Securities Daily".

In this regard, Liu Wang, chairman of Shanghai Tianhui International Logistics Co., Ltd., told reporters: “The price of container transportation has been rising. Because shipping companies have fewer ships, they often suspend voyages, and the lack of boxes is common, even if the price increases. It cannot fundamentally solve the problem of missing boxes."

• One price a day, "boxes" are crazy

"The most exaggerated time in the past 10 years." Speaking of the current shipping industry, Ms. Xie, who is engaged in the foreign trade industry, told a reporter from the Securities Daily. Ms. Xie is mainly responsible for the freight of Guangzhou Nansha Port and Shenzhen Port. She told reporters that taking a 40-foot container as an example, the highest sea freight to the Middle East at this time last year was about US$3,000. It costs almost US$5,000 now. Last year, it was US$2,800 to US$3,200 to Europe, and now it is US$6,000 to US$7,000. This year, the freight is almost twice the same period last year.

By the end of the year, the lack of positions became a true portrayal of the operation industry.

“Nowadays, there is a shortage of containers and high freight rates. The supply exceeds demand. During the epidemic, there was a large backlog of foreign containers that could not be arranged for delivery, and no one carried the goods. Almost all customers were looting containers. Under current market conditions, there are few freight forwarders. When looking for new customers, they are basically priority old customers.” Ms. Xie told reporters that the new year is approaching, and major suppliers are fully shipping. It is expected that the shortage of containers will continue.

"First of all you have to have a position, then you have to line up the truck to get the container, and finally you have to wait for the port to open before you can enter the port. Every day, you have to go through five hurdles, and you have to face customer soul torture. It's late, can't you figure it out?" A shipping forwarder complained about the tightness of the current export containers.

Liu Wang revealed to the "Securities Daily" reporter: "Many forwarders who have no boxes sometimes look for scalpers. Now forwarders are looting positions. The positions have to be booked in advance. Many people robbed and reselled them. In the past, they did not lose their shipping fees. Now that the shipping companies are recovering their losses, the shipping companies are about to usher in a wave of market conditions this year. After the merger and reorganization last year, it is estimated that all the money lost in the past will be made back this year."

Liu Wang said: “In the past Christmas and the Spring Festival, there will be a wave of liquidation market, this year is particularly fierce because of the epidemic. South American container boxes were the lowest in history at 50 US dollars a small container, and now basically it costs more than 5,000 US dollars, and a large box 10,000. U.S. dollars, if $5,000 this week is too expensive for you, you may not be able to order $6,000 next week, basically one price a week."

In fact, the current container price has been upgraded to a daily basis. A person in charge of an international logistics company said: “In Qingdao Port, the price of a second-hand 40-foot container in previous years was about US$2,000. On November 27 this year, the price rose to US$2,850; by November 30, the price of a second-hand container rose to US$3,200. ; On December 3, it rose to 3,400 US dollars again, almost one day."

According to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe for three months or less is 200% higher than a year ago, at $4,831 per 40 feet. But from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%.

The relevant person in charge of COSCO SHIPPING Holdings told reporters: “As the volume of goods continues to rise, the demand for export containers has greatly increased, and the domestic guarantee for container use has become tighter. However, the turnover of overseas empty containers has generally slowed due to the continuous impact of the epidemic situation in various places. Transfer back to China to meet demand."

"The whole industry is looking for boxes everywhere, and some merchants are beginning to hoard boxes to speculate on prices." In the eyes of industry insiders, the current situation of foreign trade companies being difficult to find a box is not only because of the slow operation of containers, but also because of the reduction of some routes. .

"There are few ship lines, and most of the cabinets shipped abroad can't return. This is the root cause of the skyrocketing price of the domestic container transportation market." Liu Wang explained to the reporter: "It's not that foreign cabinets are not coming back. It is the epidemic situation abroad. The impact is that the workers do not go to work and the speed of transportation is relatively slow. Now everyone is sharing the warehouse."

According to Liu Wang, the container ships now and the alliance has been formed since last year. Originally, it used its own ships to transport the goods. Now four or five shipowners or five or six companies form an alliance, and use the same ship. warehouse. "It turns out that there may be several shipping companies arranging several shifts to go to sea in a week. Once we formed an alliance, the shifts decreased in a week. This started last year. Now shipping companies often stop once a week, which objectively leads to a shortage of ships. ."

A person in charge of the Shanghai Maritime Logistics Company introduced to a reporter from the Securities Daily: "At present, the proportion of import and export trade by sea is imbalanced. There are few boxes coming in and many boxes going out . In addition, China has quickly prevented and controlled the epidemic, and overseas orders have continued to surge. , Increasing the pressure on shipping. Overseas, affected by the epidemic, the operation cycle of containers shipped out due to business environment problems has been lengthened, the arrival process has increased, and the operation efficiency has slowed and lengthened the circulation cycle. Due to the early outbreak of the epidemic, major shipping The company has reduced many routes, resulting in uneven distribution of global container volumes."

The industry believes that with the increase in market demand, the current effective capacity is obviously insufficient.

The relevant person in charge of COSCO Shipping Holdings revealed to the reporter: "As the global epidemic prevention and control has become normalized, global trade has been rapidly repaired since the third quarter of this year, and the demand in the container shipping market has recovered beyond expectations. In order to meet the growth of transportation demand, market capacity has gradually returned to normal. , The idle capacity has dropped rapidly from the record high of more than 2.7 million TEU (international standard unit units) in May this year. At present , there is no airworthy effective capacity to rent in the market. "

In the context of uneven global container deployment, container prices on different routes have also risen at different rates.

"Since November, the price of the U.S. line has increased by about four times compared with the beginning of the year, and the European line has risen to the highest price last year. From the perspective of the distribution of China’s export routes, the U.S. container accounts for 25%, Europe accounts for 25%, and Southeast Asia , Northeast Asia adds up to 50%, the US route is now hard to find a box is the norm, followed by the European route, freight is also very tight. The price of Malaysia route in Southeast Asia has also doubled recently." The person in charge of the aforementioned logistics company added.

Facing the increase in demand for containers, the above-mentioned relevant person in charge of COSCO SHIPPING Holdings stated: “The company will strengthen scientific forecasts for container use, actively coordinate dual-brand superior resources, and make every effort to guarantee the use of containers during peak seasons. On the one hand, internally tap the potential and accelerate overseas heavy container Demolition speed, increase empty container callback domestic and Far East efforts to promote container turnover; on the other hand, close communication with container manufacturers and container leasing companies to seek more container sources. Through two-pronged and multiple measures, to guarantee domestic container use Provide effective assistance and try our best to meet the shipping needs of customers."

In order to meet the development needs of the container market, SIPG has launched a number of effective measures to promote container volume growth in response to the market. At the beginning of this year, the Group launched seven special measures for container growth, through the implementation of preferential international transit loading and unloading fees, extension of the international transit container storage exemption period, and sea-rail intermodal customs clearance container preferential projects. In the first half of the year, the Group established three major container areas: Yangshan, Outer Harbor, and Domestic Trade, striving to achieve overall planning and agglomeration effects.

According to SIPG’s official announcement, in October, each terminal of Shanghai Port set a new record. The monthly throughput of Shengdong Company exceeded 820,000 TEUs for the first time. Among them, 33068 TEUs and 12899.75 TEUs were updated on October 25. Class record; Guandong Company broke through 720,000 TEU, setting a new record again.

• How long can the "shortage of containers" last? What is the future prospect of the shipping industry?

"The first half of the year was affected by the new crown epidemic. Ports and shipping fields did suffer a relatively large negative impact, so the first half of the year was basically a negative growth state. In the second half of the year, especially after the third quarter, normal operations resumed to a certain extent, plus China The epidemic has been controlled to a certain extent, and most of the economic activities have been resumed first. Therefore, compared with the first half of the year, there is indeed a big sign of a bottoming out." said Liu Dian, a research assistant at the Chongyang Institute of Finance of Renmin University of China.

In the first two months of this year, my country's foreign trade imports and exports dropped significantly. According to China Customs data, from January to February 2020, my country's total import and export value of goods trade was 4.12 trillion yuan, a year-on-year decrease of 9.6%. Among them, exports were 2.04 trillion yuan, down 15.9%; imports were 2.08 trillion yuan, down 2.4%.

Although the current domestic epidemic situation is under control, the global epidemic is breaking out, and exports are still under certain impact.

It can be said that in the first half of this year, people in the shipping industry were mainly pessimistic about my country's export prospects. In the second half of the year, the industry was generally optimistic about the future development of the shipping industry.

Insiders analyzed to the "Securities Daily" reporter that this round of container freight price increases began in the middle of this year. At that time, after the domestic epidemic was brought under control, foreign countries were greatly affected by the epidemic, and many overseas orders were transferred to the domestic market. When shipping from China, the shipping price began to rise. According to Liu Wang's prediction, this round of price increases will continue until the first quarter of next year.

An unnamed person in charge of maritime logistics said: "As the epidemic stabilizes, this hot market will continue into the first half of next year, or even longer."

"This wave of increase in container shipping prices has driven the adjustment of the entire foreign trade sector, breaking the laws of the past decades in the industry. Not only ocean freight, air freight and land transportation have different levels of influence and changes. The epidemic has accelerated the entire large trade sector. The consolidation and adjustment of the shipping sector will gradually move towards intensive development. Shipping companies have become monopolistic after years of integration and mergers. The aviation sector and the land transport sector are also rapidly integrated, and a new chapter will emerge in the future foreign trade field." People say so.

According to Huang Tianhua, chairman of the China Container Industry Association and vice president of CIMC, predicted that the shortage of containers may continue for about six months . He said: "We have monitored that if there are 500,000 new containers in China normally, they are in a completely healthy state if they are ready for use in the docks or ports, but the current tighter inventory is about 300,000 new containers. I expect it to be possible. In the next three months to six months, this slightly tense balance will continue. This is probably a trend in the current industry."

Although the industry is generally optimistic about the shipping industry, Liu Dian believes that the total global trade volume in 2020 will still drop a certain percentage from the previous year, but from the perspective of the shipping industry, it will definitely be from the third quarter to the fourth quarter. There will be a better market.

Liu Dian said: “Affected by the epidemic in the first half of the year, the uncertainties slowed down in the second half of the year, and the overall trend showed a relatively large rebound. Therefore, from a macro perspective, global international trade has rebounded to a certain extent. China is the first to resume the rebound led by the next."

" At present, the shipping industry is mainly affected by three factors :

Di Yi factor is that the global economy is expected to have a recovery, so after the third quarter, international trade has been warmer, led the field of shipping industry as a whole for the better, whether it is from container or just have some trade from the sea to pick up case .

The second factor is that with the signing of the RCEP agreement, a series of regional economic integration cooperation relations in East Asia and Southeast Asia will improve, which will benefit the import and export trade of China and related countries.

The third factor is that although the epidemic has not been eliminated on a global scale, all countries are in short supply, such as medical supplies, production supplies, and living supplies. China is now the world's largest trade surplus country. Under such circumstances, China's export trade, including part of its import trade, will also get a relatively large rebound in demand, and at the same time promote the rise of a series of shipping-related industry indexes in related fields, including the container shipping index. "Liu Dian said.

December 28, 2020 / By TJ China Freight / Shipping

Thousands of containers from buyers are stuck in the port! Export orders are hot until March next year, but delivery is difficult!

my country is the largest producer, exporter and consumer of toys. At the beginning of this year, affected by the epidemic, Guangdong toy companies lost a large number of foreign orders. The pressure on the industry was huge. Since the second half of the year, the entire industry has continued to pick up, and some companies even have "exports". The situation of “explosive orders”.

But the good and the bad are mixed. Due to the shortage of containers, a large backlog of goods has caused difficulties in delivery. Thousands of containers filled with toys ordered by overseas toy retailers before Christmas are still stuck in ports!

Hot toy export manufacturers' orders will be scheduled until March next year

In a building block factory, the person in charge told reporters that under the epidemic this year, their sales have not fallen but increased. The 5000 square meter factory has been transformed into fully automated production. In the past, more than 200 workers were required to work at the same time, but now they have replaced it. 32 robots work overtime 24 hours a day .

In this toy company in Chenghai District, Shantou City, Guangdong, the reporter saw a busy scene on the production line. The person in charge said that the epidemic did have some impact on them at the beginning of the year, but since April and May, the order volume began to rise. At present, they are running at full power and producing 24 hours a day, but they still cannot meet the needs of overseas customers, and some products are "out of stock".

The person in charge of another toy company that mainly sells overseas said that they did not anticipate the rapid recovery of orders. Due to the shortage of manpower, this year's orders could not be delivered in time for the year before, and new orders for next year are still being found. .

According to data provided by the China Toys and Baby Products Association, due to the impact of the epidemic, the monthly export growth rate of Chinese traditional toys was negative from January to June this year. Starting from July, the monthly export growth rate has turned negative to positive, reaching 21.1%, exports from January to October reached 26.36 billion US dollars, and the cumulative growth rate turned negative to positive, reaching 1.4%. In November, it maintained sustained growth, with exports of 3.89 billion U.S. dollars, an increase of 50.8% year-on-year, the largest single-month increase since this year.

Busy production and delivery toy manufacturers are mixed

Toy exports continued to rise, and toy factories received soft orders. At the same time, manufacturers had new troubles.

The reporter saw in a toy factory in Dongguan, Guangdong that there were many products to be shipped stacked in the factory, and only one truck was being loaded. The person in charge said that their customers are mainly large supermarkets and brand toy factories in Europe and the United States. They had to load 30 or 40 cars a day during the peak period. However, the current shortage of containers and the continuous increase in order volume, they are busy with production and worry about delivery. .

Guangdong has a large number of toy companies, with production capacity accounting for more than 70% of the country. The reporter found during a visit to many toy factories in Guangdong that the current export-oriented companies have encountered a shortage of containers. "Lack of containers" is the most common discussion among toy owners. topic. Yuan Moumou is the warehouse supervisor of a toy factory. When the reporter followed him to the warehouse, he found that a large amount of inventory was waiting to be shipped, and even the products produced in April had not been shipped.

The reporter learned during the interview that the current foreign trade toy factories are experiencing varying degrees of product backlog, and the uncertainty of overseas epidemics has slowed the circulation cycle of containers. The Jumbo Group, the largest toy retailer in Greece, said recently that due to the new crown epidemic, thousands of containers full of toys ordered by them in the months before Christmas are still stranded in the port.

Significant increase in export orders from auto parts factories! Orders skyrocketed by 100%, and orders are scheduled until April next year!

Beginning in September this year, the export value of auto parts has reached a new high for three consecutive months. In November, the export of auto parts increased by 41.9% year-on-year. According to data released by the China Automobile Association, in November this year, the export value of auto parts was 5.96 billion US dollars, an increase of 7.8% month-on-month and 41.9% year-on-year.

The export orders of auto parts factories have increased greatly, and the full production capacity is too late to ship! A person in charge of a wheel production plant in Jinhua, Zhejiang said that all production lines of the plant are operating at full capacity. Due to the substantial increase in export orders this year, one plant is still too busy to produce. Starting from the second half of the year, export orders have grown relatively fast. In the third quarter, compared with the same period last year, it increased by about 50%. In the fourth quarter, we increased by about 100%.

In another factory in Taizhou, Zhejiang that produces automobile shock absorbers, workers are working overtime and production is busy. The person in charge of the company told reporters that the orders received so far have been scheduled to April next year. In the early stage of the epidemic, in March, April and May, our orders were reduced by a certain percentage compared to 2019. Since July, the proportion of orders received has increased by nearly 126%. After August and September, it has increased by about 50% every month.

During the interview, container trucks continued to come to the factory to pick up goods. There were many products waiting to be shipped on both sides of the roads of the factory. The warehouse was also full. Due to the large number of orders this year and the shortage of export containers, many products have not had time to ship.

Yang Fudong, Special Assistant to the Secretary-General of the After-sales Parts Branch of the China Automobile Dealers Association, said that more than 70% of China's auto parts exports are used in the independent after-sales market of automobiles. The automotive after-sales market has grown very fast in recent years. The increase in car ownership and the increase in car service life will drive the demand for auto parts. The longer the service life of the car, the faster the replacement frequency of auto parts.

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