When the general enterprise exports, the main concern during the loading process is the error of the goods data, the damage of the goods and the data inconsistent with the customs declaration data, which will cause the customs to not release.
Therefore, before loading, the shipper, warehouse, and freight forwarder must coordinate and considerately to avoid this situation. The following is an explanation of the skills of container loading.
Precautions for mixing
When the general enterprise exports, the main concern during the loading process is the error of the goods data, the damage of the goods and the data inconsistent with the customs declaration data, which will cause the customs to not release. Therefore, before loading, the shipper, warehouse, and freight forwarder must coordinate and considerately to avoid this situation.
1. Goods with different shapes and different packages should not be packed together as much as possible;
2. Goods that will seep dust, liquid, moisture, odor, etc. from the package should not be placed with other goods as much as possible. "If there is a last resort, they must be separated by canvas, plastic film or other materials.
3. Light goods are placed on top of relatively heavy goods;
4. Goods with weak packing strength should be placed on top of goods with strong packing strength;
5. Liquid goods and clean goods should be placed under other goods as far as possible;
6. Goods with sharp corners or protruding parts should be covered to avoid damage to other goods.
Container loading skills
There are usually three methods for on-site packing operations of containerized goods: that is, all the boxes are packed by manpower, moved into the box by forklift ) The goods are stacked in the box with a forklift truck.
1. In any case, when goods are loaded into a container, the weight of the goods in the box cannot exceed the maximum load capacity of the container, that is, the total amount of the container minus the self-weight of the container. Under normal circumstances, the total weight and dead weight will be marked on the door of the container.
2. The unit weight of each container is fixed, so when loading the same kind of goods in the box, as long as you know the density of the goods, you can determine whether it is heavy or light. If the density of the goods is greater than the unit weight of the box, it is considered heavy, otherwise, it is considered light. Timely and clearly distinguishing these two different situations is very important to improve packing efficiency.
3. When loading, balance the load on the bottom of the box, especially strictly prohibiting the load center of gravity on one end.
4. Avoid generating concentrated loads. "For example, when loading heavy goods such as machinery and equipment, the bottom of the box should be covered with padding materials such as wooden boards to spread the load as much as possible. The average safe load per unit area on the bottom of a standard container is roughly: 1330x9.8N/m for a 20-foot container, 40 feet The container is 980x9.8N/m2.
5. When using manual loading, pay attention to whether there are loading and unloading indication signs such as "not upside down", "flat", "vertical", etc. on the package. Be sure to use the loading tools correctly. Hand hooks are prohibited for bundled goods. The goods in the box should be neatly and tightly packed. For goods that are easy to be loosely bundled and packaged with fragile packaging, use pads or insert plywood between the goods to prevent the goods from moving in the box.
6. When loading pallet cargo, it is necessary to accurately grasp the internal dimensions of the container and the external dimensions of the cargo packaging in order to calculate the number of pieces to be loaded, so as to achieve the purpose of minimizing abandonment and loading more cargo.
7. When using a forklift truck to load the box, it will be restricted by the free lifting height of the machinery and the height of the mast. Therefore, if conditions permit, the forklift can load two layers at a time, but there must be a certain gap between the top and bottom. If the conditions do not allow loading two layers at a time, when installing the second layer, considering the free lifting height of the forklift truck and the height that the forklift truck mast may lift, the mast lifting height should be the first The height of the first floor minus the free lifting height, so that the second floor can be loaded on the upper floor of the third floor.
In addition, a general forklift truck with a lifting capacity of 2 tons is generally used, and its free lifting height is about 1250px. But there is also a fork-lift truck with full free lifting height. This kind of machinery is not affected by the lifting height of the mast as long as the height of the box allows it, and it can easily stack two layers of goods. In addition, it should also be noted that there should be skids under the cargo so that the fork can be pulled out smoothly.
Finally, it’s best not to pack the goods naked, at least with packaging, and don’t blindly save space and cause damage to the goods. General goods will also be packaged. Only large machines such as boilers and building materials will be more troublesome. They must be tied up and tied tightly to prevent loosening. In fact, as long as you are careful, there won't be too many problems.
The research of De Luli Company shows that the shortage of usable containers faced by cargo owners is mainly due to operation, rather than lack of equipment.
In early 2020, some factories in China were closed due to the epidemic, and the number of containers in circulation has declined, but the decline in container shipments has been even greater. De Luli said:
By the end of 2020, the number of global marine container equipment is expected to drop by 1.1% to 39.9 million TEU, and the global container port throughput is expected to drop by 3.3% in 2020 . The two are not synchronized .
In the second half of 2020, container trade volume has risen sharply. With the increase in e-commerce activities after the closure of large consumer markets, demand has rebounded. A key indicator for measuring the availability of container equipment- the ratio of port throughput to each container is only 20 in the second half of 2020. This figure is in line with historical trends and indicates that there are enough containers to meet cargo demand .
Drewry believes that there are two reasons for the current shortage of boxes:
First, in the second quarter, due to sluggish demand, a large number of suspensions made the distribution of containers more uneven, and the weakening of liquidity made some ports' containers remain vacant;
Second, the unbalanced global economic recovery has resulted in an unbalanced shipping volume on routes, and the surge in freight demand has stimulated investment in new container equipment.
De Lori said: "Global container production shrank by 35% in the first quarter, while the container manufacturing industry has recovered by the end of the year. It is expected that container production will reach 2.7 million TEUs in 2020, a 5% drop from 2019."
Large operators are also increasing container equipment. Maersk stated in its third quarter report that it would invest in building more containers instead of ships; Hapag-Lloyd added about 250,000 TEU of equipment this year; CMA CGM increased 8.7% in the second half of the year. container. The increase in demand has pushed up container prices. In October, the price of a 20-foot TEU has reached US$2,650. It is expected that prices will rise further, and container leasing fees will continue to increase accordingly.
At present, many Asian ports are facing a serious shortage of containers. Most of the containers are stranded in destination ports in Europe and the United States, making it difficult to return as soon as possible. In the limited number of return containers, new problems have emerged.
South Korea’s Busan Port Authority (BPA) recently stated that empty containers returned to the port from overseas have not been cleaned and inspected as they should .
In response, local truck drivers complained that the shipping company neglected the inspection, cleaning and maintenance of the containers, and instead shifted the responsibility of maintaining the containers to them.
It is understood that from November 16 to 24 this year, BPA collected 30,792 samples of empty containers from 9 container terminals in Busan Port for inspection. The results showed that the condition of 52% of empty containers is not ideal .
BPA stated that many containers need to be cleaned again . In addition, insects such as cockroaches and spiders were also found in some containers .
More importantly, 59% of all return empty containers have defects . The defect rate of empty containers returned to the port by Korean domestic importers was 47.2%.
"This is because the shipping company did not conduct proper inspections before shipping containers to Busan Port." BPA said.
It is understood that since 2018, with the assistance of local fisheries departments, animal and plant quarantine agencies and customs, BPA has been paying close attention to the cleaning and damage of containers and conducting related investigations.
Investigations have shown that in many cases, the exterior or interior of the container is obviously damaged, and garbage is deposited. About 1.2% of containers had to be replaced because they could not be repaired.
At present, the shortage of containers in the Asian market is still severe, while more and more containers are stranded in American ports.
Major US ports, including the Port of Los Angeles and the Port of Long Beach, have generally experienced equipment shortages and extended loading and unloading times. Coupled with the serious container imbalance problem in Pacific trade, a large number of imported containers are backlogged in American ports, causing terminal congestion, container turnover, and cargo transportation.
This situation has intensified, making the local port "close to complete paralysis."
Although shipping companies are also trying various ways to seek various solutions to speed up the dispatch of empty containers, according to Maersk’s estimation, many countries around the world are experiencing national blockades due to the second outbreak of the epidemic, and the shortage of empty containers is expected to remain Will continue.
In 2020, global shipping logistics started as a nightmare due to the outbreak of the new crown epidemic, but at the end of the year it ushered in unprecedented popularity. The price of container transportation has been rising for several consecutive months, and the current freight rate can be described as "rising every day"...
The spot freight rate from Asia to Northern Europe is at a record high, and the annual contract price is expected to rise sharply. The impact of the new epidemic lockdown measures on sales, shippers have increased concerns about soaring freight and surcharges, which may lead to next year The wave of order cancellations.
Asia-Europe part of the freight rate exceeds 10,000 US dollars, and shippers face challenges in the Asia-Europe contract season
The freight forwarder stated that since Asia-Europe freight rates have increased by at least 5 times year-on-year, and the total freight rates of some goods have exceeded US$10,000/FEU, shippers are delaying or canceling shipments before the freight rates are adjusted.
The Shanghai Container Freight Index shows that in the week ending December 11, spot freight rates in Asia and Europe increased 24% from the previous week to US$2,948 per TEU. However, freight forwarders stated that the index reflects market conditions incompletely, and shippers’ quotations exceeded $10000/FEU.
A source said: "We are beginning to see customers canceling reservations because the prices are too high."
Shipping from China to the UK in January, the shipping company is now quoting 10,000 US dollars / 40'HC at sight, the source said: "I heard that the price is 13,500 US dollars."
In addition to the additional costs of shipping companies, including the increase in scheduled cancellation fees, freight forwarders worry that customers will refuse or fail to pay all the additional costs caused by the interruption of the supply chain.
European shippers are preparing for the upcoming contract season and have issued warnings to shipping companies that they will take further action if they try to maintain this year’s sharply increased rates.
The freight from Asia to Europe is as high as US$10,000/FEU, including various surcharges currently applicable to the industry. The Global Shippers Forum (GSF) said that due to “overpriced”, many shippers are currently not delivering goods at all. Small and medium-sized companies cannot pay additional fees.
GSF Secretary General James Hookham said: “The shipper cannot afford the various increased rates and therefore loses business.”
Freight rates in Europe and East Asia continue to rise
▍Maersk announced new fees in Europe and East Asia from December to next year
Maersk announced a new peak season surcharge (PSS), which applies to refrigerated goods from the Far East to Northern and Southern European countries. The surcharge will be $1,000 / 20' reefer container, $1,500 / 40' reefer container, effective from December 15th, and Taiwan will be effective from January 1, 2021.
In addition, since December 1, MSC has implemented PSS of US$500/20' and US$750/40' for all dry goods from the UK, Ireland, Northern Spain, Portugal and the Baltic Sea to the Far East.
In addition, MSC has adjusted the following rates starting from December 1, 2020 until further notice, but not exceeding December 31, 2020.
▍Hapag-Lloyd announced to increase the surcharge from Asia to many places in Europe
A few days ago, Hapag-Lloyd announced new prices from Asia to Europe and the Mediterranean, which will take effect on January 1, 2021.
Hapag-Lloyd also issued a new general tax rate increase (GRI) for all dry containers, reefer containers, non-operational reefer containers, storage tanks, flat racks and open-top containers from South Asia and Northeast Asia to Australia , since January 1. Effective.
Southeast Asia to Australia
US $ 150/20'
US $ 300/40'
Northeast Asia to Australia
US $ 300/20'
US $ 600/40'
From December 7th, Hapag-Lloyd will implement another GRI for all goods and all types of containers from East Asia to the East Coast of South America at USD 550 per container.
At the same time, Hapag-Lloyd announced that it will postpone the GRI implemented in eastbound trade from East Asia to all destinations in the United States and Canada on December 1, and the new effective date is January 1, 2021.
This general rate increase is applicable to all dry goods, refrigerated cabinets, non-operational refrigerated cabinets, storage tanks, pallets and open top containers. Details are as follows:
East Asia to North America (United States and Canada)
US$960/20'
US$1200/40'
East Asia includes countries/regions in Japan, South Korea, China, China/Taiwan, China/Hong Kong, China/Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, Philippines, and Russia’s Pacific Rim provinces.
In response to the current serious shortage of containers in the Asian market, Hapag-Lloyd CEO Habben Jansen recently stated that “the congestion of the port and the strong demand in the market have caused the increase in traffic to exacerbate this problem. This kind of tension will continue for another 6-8 weeks. It will be alleviated.” The pressure on the supply chain caused by the shortage of containers in Asia will continue for at least another 6-8 weeks, which means that shortages will still be faced in the next two months, which will also affect shipments before the Spring Festival.
Container freight rates continue to soar, reaching high levels far above the long-term sustainable level. The Shanghai Container Freight Index (SCFI) set a record of 2131.71 points, an increase of 162% over the same period last year. After experiencing a sharp increase in freight rates that initially lags behind the Pan-Pacific region, spot freight rates in northern Europe have soared up 230% compared to the same period last year. Moreover, the freight quotation in Asia and Northern Europe has reached US$10,000 per 40-foot high cabinet.
According to the shipping index released by the Shanghai Shipping Exchange in the latest issue, the overall export container shipping market in China remains high. The freight rates of most ocean routes operated steadily, and some increased significantly, and the composite index rose. On December 11, Shanghai's comprehensive export container freight index was 2311.71 points, an increase of 8.6% over the previous period.
Asia to Europe (Far East Europe Mediterranean route) : Near the end of the year, the volume of the European market remains high. The recurrence of the epidemic has also stimulated the growth of local import demand and strong transportation demand. The lack of containers in the market also affects European routes. Strong market demand and severe equipment shortages are expected to continue after the Spring Festival in 2021.
Last week, the average occupancy utilization rate of ships in Shanghai Port remained at the full level. Affected by this, most airlines increased their freight rates sharply in the middle of the month, and the spot market booking prices rose sharply. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the European basic port market was US$2,948/TEU, an increase of 24.2% from the previous period. In the Mediterranean route , the market situation is basically the same as that in Europe, and the spot market freight rate has risen sharply. On December 11, the freight rate (sea freight and ocean freight surcharges) for exports from Shanghai to the Mediterranean basic port market was 3073 US dollars/TEU, breaking the 3000 US dollars mark, an increase of 28.9% from the previous period.
However, there is news that the actual freight paid by the shipper is much higher in order to ensure the container and the final remaining European space . Lars Jensen of SeaIntelligence said that there is anecdotal evidence that the exact freight paid by shippers on the Asia-Northern Europe trade route may be as high as US$5,000 per TEU. Jensen explained: “In this case, it’s important to note that in some cases, SCFI underestimates the actual freight paid because there are additional costs related to equipment and space availability.”
A British freight forwarding company confirmed to The Loadstar that the freight quotation in Asia and Northern Europe has reached US$10,000 per 40-foot high container . "It's crazy," he said.
At the same time, all carriers will raise GRI again on December 15 . The current extreme shortage of 40-foot high cabinets suggests that alternative alternatives will continue to increase in freight rates this week; it is worth noting that due to port congestion and limited land capacity, cargo to the UK is subject to many restrictions, and delays and operational problems are expected. Some carriers stopped accepting bookings sent to the UK.
Due to the strong demand for containers and the backlog in recent weeks. CMA CMA CGM notified that it will temporarily stop accepting bookings from Asia to Europe, that is, temporarily suspend bookings for the 49th, 50th and 51st week Asia-Northern Europe routes. Another shipping company recently told Asia-Northern Europe customers that if the shipment is cancelled within two weeks after the shipment date, it hopes to charge a fee of US$1,000 per TEU.
Asia to North America (trans-Pacific eastbound route): The US epidemic is showing a trend of major outbreaks, with new cases hitting new highs in a single day. Severe epidemics have caused frequent port congestion and blocked transit. The problem of equipment imbalance in Asia continues, and supply and demand are severely unbalanced. Ningbo Port, ports in Southeast Asia and Busan Port are the loading ports with the most serious equipment shortages. The carrier's cargo backlog has become more serious, and it is increasingly difficult to book containers.
Last week, the average space utilization rate of ships on the Shanghai Port to West and East US routes remained close to the full load level. The freight rate is high and stable, and the spot market booking price is basically the same as the previous period. SCFI data shows that the spot freight rate from Shanghai to the east coast of the United States increased by 104 U.S. dollars to 4804 U.S. dollars per FEU, an increase of 91% over the same period last year, while the freight rate to the U.S. West Coast was basically the same at 3,984 U.S. dollars/FEU. Nevertheless, it has increased by 188% compared to the same period last year.
There does not appear to be any sign of slowing down in freight volumes to the West Coast of the United States. The Port of Los Angeles expects that containers will increase by 48% and 44% in the next two weeks. The Los Angeles and Long Beach terminals are under tremendous pressure due to the sharp increase in throughput. According to forecasts, the total volume of the Port of Los Angeles in the fourth quarter will increase by 40% year-on-year, exceeding 850,000 TEUs. Ships are waiting at the anchorage in San Pedro Bay for a long time. 6 days.
Jon Monroe of Jon Monroe Consulting, Washington State, said: "Consumer recovery is gaining momentum. Black Friday sales have grown strongly, up 21% from last year. If you have not ordered the goods shipped before the Lunar New Year, you may be too late. Up."
South American routes: The raging epidemic has affected the production capacity of South American countries, their dependence on foreign materials is high, and transportation demand has remained high. In this period, most of the average space utilization of ships in Shanghai Port is at the full load level. Near the middle of the month, most airlines increased their booking prices, and the spot market freight rates rose. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the South American basic port market was 5876 US dollars/TEU, an increase of 12.5% from the previous period.
In other routes, SCFI's spot freight rates have risen almost across the board. For example, the freight rates from Asia to South Africa rose 15% this period to US$2,289 per TEU, an increase of 130% over the same period last year.
The analysis of the US retail supply chain experts pointed out that after setting a new record in the fall of this fall, the US's ocean container imports continued to maintain strong growth thanks to retailers' replenishment of inventories and large orders from e-commerce platforms.
Jonathan Gold, vice president of supply chain and customs policy at the National Federation of Retailers (NRF), said that the new crown pneumonia epidemic has made 2020 one of the most difficult years in the history of the supply chain industry, but fortunately, the supply chain has experienced Lived the test of life and death. Jonathan said: "So far, holiday products are abundant, and the experience of the epidemic in 2020 has taught us many experiences and lessons."
Ben Hackett, the founder of the consulting firm Associates, emphasized that imports have experienced a roller coaster-like market. The retail inventory-to-sales ratio soared to 1.68 in April and dropped to 1.22 in June, and has maintained this level ever since.
According to the "Global Port Tracking Monthly Report", the US ocean container imports in October were 2.21 million TEU. This figure is an increase of 17.6% compared to the same period last year and an increase of 5.2% from the 2.1 million TEU in September. This is the highest monthly record since the Federation of American Retailers started tracking container imports in 2002.
U.S. sea container imports will increase by 2.4% year-on-year in January next year
The Federation of American Retailers predicts that in January 2021, the import volume of seaborne containers in the United States was 1.86 million TEU, an increase of 2.4% year-on-year; in February it was 1.55 million TEU, an increase of 2.6% year-on-year; in March it was 1.62 million TEU, an increase of 17.8 year-on-year %, it was 1.74 million TEU in April, a year-on-year increase of 8.3%.
As U.S. consumption continues to recover and retail sales have rebounded strongly, the federation predicts that November and December holiday sales will increase by 3.6%-5.2%, exceeding the total in 2019, with sales between 755.3 billion and 766.7 billion US dollars.
For the owners of oil tankers and dry bulk carriers, this is a painful period. But there are also some bright spots in the haze of the maritime industry-not only the container industry is booming, but the freight rate of liquefied petroleum gas (LPG) has just reached the highest point in 5 years.
Last Friday, the Baltic Exchange assessed the freight of a very large gas carrier (VLGC, an LPG carrier with a capacity of approximately 84,000 cubic meters) at US$104,000 per day. This figure has risen from a low of less than $20,000 per day in July.
Last Wednesday, Argus carried out a higher assessment of VLGC freight rates on the Middle East-Asia route: US$107,000 per day.
Chart: Kofyin; until December 10
The stocks of VLGC owners are rising. In the past six months, the two Norwegian companies Avance Gas (Oslo: AGAS) and BW LPG (Oslo: BWLPG) have grown by 110% and 88%, respectively. Dorian LPG (NYSE: LPG), which is listed in the United States, is lagging, although it has grown by 44% during this period.
Chart: Fernley Securities
In order to gain insight into the factors that led to the increase in VLGC freight rates and whether the freight rebound has an impact , FreightWaves interviewed Scott Gray, an LPG freight broker located in Texas.
Gray is known in the industry as one of the co-founders of Waterborne Reports, a well-respected natural gas transportation intelligence company that was subsequently acquired by IHS Markit (NYSE:INFO).
U.S. exports unexpectedly rise
LPG (propane and butane) is produced through oil and gas production and refining processes. When the impact of the epidemic cut consumption in the first half of the year and oil prices plummeted, people worried that LPG transportation would be a terrible situation.
Theoretically, the lower U.S. production combined with the sharp decline in refinery output will reduce U.S. LPG exports. There are two main factors affecting VLGC freight: US-Asia and Middle East-Asia traffic. As the U.S.-Asia voyage is longer, the rate is more important. Therefore, U.S. LPG exports restricted by the epidemic will limit the spot price of VLGC.
But the facts have proved that concerns about US exports are unfounded.
Gray explained: "I want to say that the U.S. water LPG exports have not been affected by various sporadic events in the first and second quarters. If you look at the export graph, the graph will fluctuate, but it has a downward trend. Not big. In fact, I can even say that the average in the fourth quarter is better than the previous three quarters. We see 80, 82, 84 VLGC loading every month. I think this is a powerful system."
Gray said that unlike LPG in the Middle East (more from the refining process), LPG in the United States is produced through natural gas production. After the new crown epidemic, natural gas production has performed better than oil production and refining.
In BW LPG's latest quarterly conference call, CEO Anders Onarheim said: "Despite the decline in oil production, the U.S. LPG production has increased." Executive Vice President of Business, BW LPG Niels Rigault added: “The production of LPG in the US has proven to be more resilient in a low-price environment.”
Far East demand is very strong
VLGC's listed companies have highlighted the strong demand for Asia from China, Japan and South Korea in recent months. In Asia, propane is used for heating and cooking and plastic production.
On the industrial side, LPG is consumed by propane dehydrogenation (PDH) plants. Some PDH plants only use propane as a raw material; others choose to use propane or naphtha based on price. In layman's terms, the propylene produced by the PDH plant is the precursor of polypropylene, and propylene is the precursor of plastic.
Considering the plastic packaging of all commodities used after the epidemic, the price of propylene is soaring. What followed was the pricing of propane in China. The value of propylene is at or close to a record level.
The greater the spread between US propane and Chinese propane, the higher the transportation cost, while still providing shippers with acceptable sales margins.
"This (Asian) demand keeps prices high. Gray said that when the price difference (priced with the United States) increases, the shipping industry will step in and get a share of the pie, which is why freight rates are now rising sharply.
Middle East exports and India imports
The transportation needs of LPG must be considered in conjunction with the export situation of the Middle East and the United States.
Due to the impact of the epidemic that has led to OPEC production cuts and refineries, the impact of COVID on Middle East exports is greater than US exports.
Gray confirmed: “Due to reduced refinery operations, production in the Middle East has decreased. Iran’s transaction volume has also declined. In January, Iran’s production was approximately 575,000 tons. In November it was 250,000 tons.”
A key development in global shipping demand is the increase in India's imports of American LPG, rather than imports from the Middle East.
Rigault said: “India started importing from the United States last year. The duration of the voyage is more than four times the duration of the Middle East voyage. India mainly buys LPG from the Middle East. But they also see the US price, so they can also buy American products.”
Gray is skeptical of the US-India trade that started in early 2019. "This is considered a new thing. A new route. But the Middle East market seems to have taken back part of it. They said'Don't be in my backyard' because it is next door. It is difficult for the United States to compete with long-distance freight in the Middle East on the basis of However, the Middle East can ship it to the United States. In addition, Indians also have contracts in the Middle East. For us, this is more opportunity."
Canal and dry dock supply restrictions
The two main constraints on ship supply: the congestion of the Panama Canal and the maintenance and modification of dry docks for LPG ships are also increasing freight rates.
As previously reported by FreightWaves, in the past two months, the speed of ships without transit reservations through the Panama Canal has slowed. Gray said: "We have seen that due to delays, the volume of shipments from the United States to Asia via the Cape of Good Hope has increased, which has led to an increase in freight rates."
The most important ship supply issue involves dry docks.
He pointed out: “There are currently 25-30 LPG ships in dry docks in Asia in need of repairs. I think about five years ago: all the newbuildings came in. Now, after five years, it’s like you bought one. The car must be brought in, and the boat must be maintained. All these people will go to the yard at the same time, thus tightening the market."
Outlook for the first quarter of 2021
How long can VLGC freight rate maintain the current high point?
In terms of dry dock, the freight tailwind will continue. Gray said: "In the first quarter, there were almost as many ships in dry dock as in the fourth quarter." According to Rigault, "23% of the global VLGC fleet will enter the dock next year."
In terms of freight, the volume in the Middle East may increase. OPEC plans to cut production in January. Gray certainly said: "It will have an impact at some point."
At the same time, Biden will assume the presidency on January 20. It is expected that Biden's attitude towards Iran will not be as tough as Trump. This may eventually increase Iran’s LPG exports.
The biggest unknown is the arbitrage spread between China and the US LPG, which will determine the volume of transactions on this long-distance route.
In terms of weather, if the weather in the United States is cold, the domestic demand for LPG heating will increase, but the warm weather in North Asia will reduce the demand, the price difference will be reduced, and the goods will be reduced. vice versa.
As my country's foreign trade exports gradually stabilized and improved, the lack of domestic export capacity has appeared in many places, and for a period of time, it has also been accompanied by a shortage of containers.
Recently, a 1℃ reporter from China Business News found that the main reason for the “difficult to find one container” situation was that due to the epidemic, the efficiency of container turnover was reduced, and the port congestion caused a large number of delays in shipping schedules, which further aggravated the return of containers. smooth. With the efforts of domestic container manufacturers in recent months, the shortage of domestic containers has improved, and the shortage of some ports has eased.
However, new container manufacturers dare not continue to expand production capacity. Because of the epidemic, market uncertainty continues.
According to the 1℃ reporter's further on-site investigation, the shortage of containers has stimulated the kinetic energy of new container construction in China, and the prices of raw materials and labor have risen. The ex-factory price of new containers will rise accordingly. For the high freight rates, it is the foreign trade companies that ultimately suffer the loss of profits.
Inefficient port congestion
On the afternoon of December 2, when the 1℃ reporter arrived at Shenzhen Yantian International Container Terminal, the containers were piled up like a mountain, and heavy semi-trailer trucks entered and exited in file at the gate: the first class trucks were fully loaded with the containers that were about to be exported and went through automatic inspection. The passage enters the terminal, and the other type is an empty truck, which enters the gate and exits after the airspace cabinet. Many large trucks are still lining up to pick up the containers.
Chinese exports with a major source of container in two aspects, one is emptying the old container port after unloading , the second is Chinese-made box business of new office box . According to statistics from China Container Industry Association, usually the storage size of empty containers at ports is about 4 million TEU (Twenty-feet Equivalent Unit, the international standard unit, a container with a length of 20 feet is the international unit of measurement), and the port unloads old containers. It is the main source of supply for export boxes in my country.
We have not yet seen data on how many empty containers are available in the yards of domestic ports such as Yantian Port, but statistics from the China Container Industry Association show that since this year, China’s major foreign trade container ports have unloaded old container stocks with export growth and overseas adjustments. Due to restrictions on the return of empty containers and other factors, the unloaded old container stock of the seven major foreign trade container ports continued to decrease from about 3.05 million TEU at the end of February 2020 to about 1.85 million TEU at the end of October, compared with the same period in the past five years A reduction of 26%.
Photo: Yantian International Container Terminal is located in Dapeng Bay, east of Shenzhen. Photo/Wu Mianqiang
At present, domestic export containers are still very tight. In addition to the fact that container transportation has broken the original arrival and delivery balance level, the decline in container circulation speed and port congestion are also one of the main reasons.
As the "barometer" of global trade, containers have a complete set of operating procedures. According to people in the shipping industry, taking shipping as an example, the port terminal is a transfer station for containers. Export companies book space and containers from the freight forwarder. After passing through the export customs broker, the trailer fleet consisting of semi-trailers goes to the terminal and other yards to pick up containers After the container is filled with cargo, it is sent to the port terminal for export. After the liner arrives at the destination port with the container, the local cargo owner arranges customs clearance, picking up the container, unloading, and returning the container to the terminal yard. After waiting for the local export company to book, pick up the container and load the cargo, the container will be transferred back to China by liner.
However, the lingering epidemic has affected the efficiency of the above-mentioned container operations. Overseas epidemics have repeated, and the efficiency of local cargo owners in customs clearance, container picking and unloading is low. The relevant person in charge of the Guangdong small appliance export company previously interviewed by the 1℃ reporter said that their company's goods are in the ports of European and American countries .
Affected by the epidemic, many countries have experienced labor shortages, especially port operators, trailer truck drivers and related logistics personnel.
Master Sun, a truck driver picking up cargo at the Shenzhen container yard, told the 1℃ reporter that the company’s overseas business divisions had a "labor shortage". The United States had just finished Thanksgiving and will enter the Christmas season, which will further increase labor. tension.
The China Container Industry Association recently issued an "Action Initiative for Enterprises in the Container Industry Chain to Work Together to Stabilize Foreign Trade and Promote Growth", which stated that "Due to the increase in the number of infected people and the requirements of epidemic prevention measures, shippers (from across the ocean) cannot normally get from ports. The goods are shipped out of the cargo yard, and some goods are even rejected after arriving at the port. This has caused more and more containers to be piled up in disorder at the port. This disordered storage has caused the shipping company’s ships to be unable to dock and offshore on schedule. Affected the turnover efficiency of containers."
"From a global perspective, the supply chain of container transportation has slowed down. This is also one of the important factors that have caused global container tension." said Zhao, who has been in the shipping industry for more than ten years. Therefore, ports are definitely better than Congestion in the past was inevitable.
The prevention and control of the epidemic has also reduced the efficiency of domestic container operations. Lao Zhao recently told reporters at 1℃ that after the liner arrived at the domestic port, compared with the non-epidemic period, the quarantine process and procedures have increased. For example, the container needs to be disinfected, which leads to a longer time for customs clearance and unloading. "The crew cannot go ashore. It needs to be isolated and rotated first."
Port congestion will lead to adjustments in shipping schedules and affect the efficiency of container transportation. Since the third quarter of this year, the Ocean Network Express (ONE) of the TA Alliance has continued to update the schedule adjustment notice on its official website. The reporter at 1℃ found that most of the reasons were caused by port congestion.
From December 1st to 4th, ONE continuously issued more than 20 notices regarding the Shanghai Port shipping schedule changes or late opening notices, mostly due to "the effect of port congestion causing delays in shipping schedules." In the past November, there were more cases of ship delays due to port congestion. ONE is a Japanese container shipping company headquartered in Tokyo and Singapore. It was established as a joint venture by a Japanese shipping company in 2016, with a fleet of over one million TEUs.
"Once there is congestion in the port, the operation efficiency of containers will be low, which will further aggravate the tension of container use." Lao Zhao said.
As the international container ocean trunk transportation hub port in South China, Yantian Port is one of the world's largest single-handle container terminals. It mainly serves routes exported to Europe and the United States. Nearly 100 liner routes reach Europe, the United States and other regions every week. The 1℃ reporter found on the scene that the port was busy, and the gates were still slightly crowded. Many large trucks stopped at the door and waited for the relevant procedures to be completed, while the large trucks that had already lifted their cabinets slowly pulled out of the cracks.
Cost rises, logistics prices soar
The shortage of domestic export containers has caused the single-container market price to soar. As the order volume of container manufacturers increases, the cost of raw materials and labor has increased. In addition, the shortage of shipping space has further increased the cost of export containers for enterprises, increasing the logistics cost of the foreign trade industry and eroding the profits of export enterprises.
In fact, more than 90% of global containers are currently supplied by Chinese companies. According to the research report of Dongxing Securities, on the container production side, CIMC (CIMC, market share of 44%), Shanghai Universe (DFIC, market share of about 24%), and Xinhuachang (CXIC, market share About 13%), Singamas (about 3% market share) occupy most of the market share.
According to data released by the China Container Industry Association, there are three main types of container buyers. One is shipping companies, the other is container leasing companies, and the third is domestic railway and logistics companies . The third category accounts for a very low proportion, not exceeding all. 8% of annual container production and sales. The total production and sales of China's container manufacturers are between 2 million and 3 million TEU each year, and the storage of new containers accounts for 10%-20%.
1℃ reporters interviewed shipping companies and container manufacturing companies in many ways and learned that in the first five months of this year, China’s container manufacturers had almost no new orders. The pessimistic judgment of China has reduced liner shipping capacity and container procurement plans.
However, after June this year, my country's foreign trade quickly recovered. After the empty containers at the port were digested, the information of the lack of containers in the market was transmitted to the container manufacturers in mid-July, and orders continued to increase. "In September, our order volume has been scheduled to March next year." A person from CIMC Group who did not want to be named told 1℃ reporter.
"As a container equipment provider, we mainly produce according to shipping company orders. The shipping industry is currently booming and freight prices are rising. Therefore, shipowners and container leasing companies are also willing to purchase large quantities of containers." Liu Meng, a senior employee of a major domestic container manufacturer (Pseudonym) said.
Continued hot container production orders have caused the price of raw materials in the container supply chain to rise, including raw materials required for container production such as steel, wooden floors, and paint.
Insiders of Singamas Containers told 1℃ reporters that according to their understanding, steel, wood floors, and paint have all increased in varying degrees since the beginning of this year. "Compared with the off-season in the first half of this year, the price of steel has increased by about 10%, and the current average is more than 4,000 yuan per ton, and the wood floor has increased by 50% year-on-year." A relevant person in charge of a container manufacturer told 1℃ reporter.
The number of container floor sales is consistent with the trend of China's container export volume. In the raw material sector, the shortage of wood flooring is the most obvious, so prices have also increased significantly.
Kangxin New Material (600076.SH) is the only listed company in China that is mainly engaged in container floor panels. The company’s securities department confirmed that its finished product prices this year have exceeded the same period last year, "because of the increase in raw material and labor costs."
The main raw material of the container floor is logs. A domestic container bottom plate supplier told the 1℃ reporter that the current price of wood has increased significantly, and the purchase price of better poplar wood ranges from 800 to 1,000 yuan, which is more than 50% higher than when the market was normal. In the case of shortage, if the price is not increased, the timber merchant will not deliver the goods to the transaction."
The increase in supply chain costs has also driven up the selling prices of container products . A few days ago, a reporter from 1℃ asked CIMC insiders about the order status in the name of the leasing company. The salesperson of the other party said, “Orders are very slow now, and they need to wait until March next year to deliver them, mainly now (production orders). Don't go in."
The above-mentioned sales staff stated that the current order volume of the company is mainly unified at the head office level. “The selling price of 20-foot container (standard box) is now US$2,600, 40-foot container (high container) is US$4420, and 40-foot container (flat container) is 4210. Around the dollar."
Compared with last year, the price of new boxes between US$1600 and US$1700 has increased significantly. According to the research report of Dongxing Securities, in August this year, the price of a new container was only US$2,100.
"The epidemic is a double-edged sword, both an opportunity and a challenge." Recently, Lao Zhao said. Most of the foreign trade companies that have survived now have received many foreign orders, but at the same time they have encountered high freight costs caused by the shortage of containers and the shortage of space.
"Many of our company's customers, currently doing foreign trade orders, are not making enough money to pay for sea freight. Examples of this are everywhere. Even if they lose money, they still do it because they have a long-term vision and want to maintain good customers first. In the future, the freight rate will be lowered and then the profits will be made back." A business executive who has been a freight forwarder in East China for 10 years told 1℃ reporter.
I dare not rush to expand production after receiving orders in the first quarter of next year
On the evening of December 2, a 1℃ reporter came to the container production workshop of Dongguan South CIMC Logistics Equipment Manufacturing Co., Ltd. (hereinafter referred to as "South CIMC"), a subsidiary of CIMC Group, Fenggang Town, Dongguan City. A scene in full swing.
This is one of the largest container production bases in the country, and it is said that 1 out of every 10 containers in the world goes to sea here.
Worker Master Wang (pseudonym) had just left work and was riding a battery car to go home. He told the 1℃ reporter that the factory orders are currently full and he worked 11 hours that day. "Our factory is now operating in two shifts and is producing at full capacity," a person close to Southern CIMC told 1℃ reporter.
Since the third quarter of this year, as CIMC's order volume continues to increase, Master Wang has many colleagues who come to help temporarily. The 1℃ reporter learned during an interview with Southern CIMC that the plant has added many new temporary workers this year. “Most of them are labor dispatch employees, and the average daily salary of each person is 300 yuan, which is tens of thousands of yuan a month.” A labor dispatch company who recruited welders in a container factory of CIMC Group introduced.
"The main reason is that the container manufacturing industry is deeply affected by the shipping industry. When the market is good, the number of orders will increase, and if the production is at full capacity, there will be a shortage of manpower; when the market is not good, the number of orders will decrease, and manpower will be sufficient or even surplus. "The above-mentioned CIMC insider told the 1℃ reporter that many CIMC people (employees) still have fresh memories of the experience that factories were shut down during the financial crisis in 2008 and that they were looking forward to working at home.
On December 3, regarding the current shortage of containers and soaring freight rates in the field of foreign trade and logistics, the spokesperson of the Ministry of Commerce Gao Feng said that on the basis of the preliminary work, the Ministry of Commerce will continue to promote the increase of capacity and support the acceleration Container return transportation, improve operation efficiency, support container manufacturing enterprises to expand production capacity, and at the same time increase the intensity of market supervision, strive to stabilize market prices, and provide strong logistics support for the stable development of foreign trade.
Recently, the China Container Industry Association has also issued an initiative to "advocate container industry chain enterprises to actively invest in stabilizing foreign trade", and strive to improve the efficiency of international container turnover. Production-related enterprises should continue to improve production efficiency, continue to tap potential production capacity, and improve process equipment. Increase the number of workers, improve their labor skills, and make every effort to ensure that new box orders are delivered as soon as possible.
Affected by the current shipping situation, many large domestic container manufacturing companies are making every effort to ensure the delivery of new container orders as soon as possible to escort foreign trade exports, while also considering the future balance of supply and demand in the global container market.
In fact, the container manufacturing and sales industry and the development of the shipping industry share each other. Nowadays, aspects of container production enterprises are operating at full capacity ensure market supply; on the other hand below the epidemic, we still dare to expand production capacity.
People in the shipping industry predict 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 next year.
"The main reason is that I dare not judge the future market prospects." Liu Meng told the 1℃ reporter that the current epidemic situation continues and container manufacturers are also worried that after receiving external orders, they cannot judge the future market development. If the order is received first next year Quarterly, the supply can be guaranteed, and the market will not be turbulent at the same time, so everyone hopes to have such a steady move.
"Now that the market is in short supply, we can completely 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." Liu Meng said that the demand for containers in global trade is only There are several million TEUs, once container overcapacity occurs, it will be a serious problem.
The current life span of containers is 10-15 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." Liu Meng told the 1℃ reporter.
Near the end of the year, the peak freight season continued to be hot, and the market freight rates continued to rise.
Especially in the European market, the demand for cargo volume remains high. At the same time, the recurrence of the new crown pneumonia epidemic has also stimulated the growth of local import demand.
At present, the average space utilization rate of ships exported from Shanghai Port to Europe has basically remained at the full space level, driving the market booking price to rise sharply.
The latest Shanghai comprehensive export container freight index
According to the Shanghai Composite Container Freight Index (SCFI), on December 11, the freight rate (sea freight and ocean freight surcharges) from Shanghai to the European basic port market was US$2,948/TEU, a 24.2% increase from a week ago. Compared with the US$1,508/TEU a month ago, it has nearly doubled.
The freight rate of US$2948/TEU on the Asia-Europe route is the highest level in history since SCFI was released in 2009.
2018-2020 SCFI Asia-Europe route freight trends
The rate of the Mediterranean route has increased even more. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the Mediterranean basic port market was 3073 US dollars/TEU, a 28.9% increase from a week ago.
Some industry analysts believe that the actual freight rate of some goods on the Asia-Europe route is higher.
Lars Jensen, CEO of SeaIntelligence Consulting, an industry authoritative consulting firm, believes that SCFI may seriously underestimate the actual freight rate in some cases because it does not consider the additional costs associated with containers and spaces.
He said that anecdotal evidence has shown that in Asia-Europe routes, the actual freight rate of some goods has reached as high as US$10,000/FEU.
The continuous period of high cargo volume, soaring freight rates, port congestion and shortage of containers have increased the risk of supply chain rupture, and more and more liner companies are controlling bookings.
Hapag-Lloyd has announced that due to severe container shortages, until the end of December this year, it will no longer accept 40-foot reefer containers from terminals in Germany, Austria, Switzerland, Hungary and the Czech Republic. In addition, the empty container of 40-foot ordinary container in Hamburg, Germany is not accepted.
This means that bookings in these countries will be affected.
In addition, Maersk and ONE also indicated to the media that before the New Year, they will have to reduce their bookings in Asia.
Faced with criticism that liner companies’ reduced bookings will affect shippers’ shipments, the World Shipping Council, headquartered in the United States, stated: “No one can predict the surge in demand for container shipping this year. see."
The organization believes that the solution to current problems lies in continuous communication between the carrier and the shipper. To restore the entire transportation system to a balanced state, all parties must work together to spend this critical period together.
"Yantian Port (6.320, -0.11, -1.71%) processes a TEU in an average of 2.4 seconds, and a ship departs to the United States every 4 hours. This year, the port throughput will set a record for the port in the past 20 years."
Lin Qingwen, managing director of Yantian International Container Terminal Co., Ltd., introduced that one out of every four containers imported by the United States from China comes from Yantian Port in Shenzhen, which has set a global single terminal throughput record for two consecutive months this year.
As the world's largest container port, Shanghai Port also set a monthly historical record of container throughput in July and October this year. According to data released by the China Ports Association, in October, the container throughput of China's eight major hub ports increased by 11.1% year-on-year, and the growth rate hit a new high this year.
At the same time, an unprecedented "container shortage" is sweeping across the country and has become an "immediate emergency" for foreign traders. Behind this, has China's foreign trade fully recovered?
From the macro data, the answer seems to be yes.
According to data released by the General Administration of Customs on December 7, China's foreign trade imports and exports in November were US$460.72 billion, an increase of 13.6%. Among them, exports were US$268.07 billion, an increase of 21.1%; imports were US$192.65 billion, an increase of 4.5%. Both the total value of imports and exports and the value of exports in November set a monthly record since the statistics were available in 1979. Excluding seasonal factors, the growth rate of exports in November also set a new high in the past nine years. The scale of China's imports and exports in the first 11 months also hit a record high over the same period in history.
This greatly exceeded expectations at the beginning of the year. At that time, due to the impact of the epidemic, a large number of orders were cancelled, and the foreign trade market was full of grief. However, after entering the second half of the year, the plot quickly reversed: a large number of foreign trade factory orders surged, and news of exploding orders, exploding cabins, lack of cabinets, overtime, and enrollment expansion was endless.
This is because the economic recovery of various countries in the epidemic is not synchronized : China has quickly resumed work and production after the epidemic was controlled, while the epidemic in many other countries has continued to repeat, and there have been signs of accelerated rebound in recent days, and factories in some countries have been forced to stop production. , The production chain is broken, the market supply of these countries can only be solved through imports, and the dependence of the international market on Chinese trade has increased.
In this process, the global manufacturing industry has a tendency to return to China . For example, some foreign trade orders from countries such as India, Bangladesh, and Vietnam are being transferred to China.
On the other hand, the measures taken by countries to stimulate the economy are not the same: Europe and the United States focus more on stimulating the consumer side, while China pays more attention to the resumption of work and production on the supply side and the integrity of the industrial chain.
Therefore, the income level of consumers in European and American countries has not dropped significantly. Affected by the epidemic, although overseas consumers have drastically reduced their consumption of services such as tourism, they have increased their physical consumption in renovating houses, replacing furniture, and home appliances.
Correspondingly, China's exports of building materials, furniture and home appliances have grown rapidly recently . As the first country to survive the epidemic and resume normal production, with a complete domestic supply chain and a huge manufacturing scale, China quickly responded to overseas consumer demand and brought about a surge in exports.
In addition, foreign trade exports, which set historical records recently, also have traditional seasonal factors. Near Christmas and New Year, foreign centralized purchases need to be stocked in advance. This is the peak season for Chinese exports, and this year is no exception.
It is worth noting that the epidemic is profoundly reconstructing the product structure and trade mode structure of China's foreign trade.
As Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce, said, the recovery of China's foreign trade after the epidemic is not the overall recovery of the entire industry, but there is obvious industry differentiation.
Among them, the export of anti-epidemic materials such as masks and ventilators, household products such as furniture, home appliances, fitness equipment, and electronic products related to online transformation performed the most strongly.
According to statistics from the General Administration of Customs, in the first three quarters of this year, China exported 880.8 billion yuan of "home economy" commodities such as notebook computers, tablet computers, and home appliances, an increase of 17.8%, driving a 1.1% increase in exports. China’s exports of textiles, medical equipment, and medicines, including masks, totaled 1.04 trillion yuan, an increase of 36.5%, driving an export increase of 2.2%.
According to Helen Feng, the business director of Dongguan Jiamu Packaging Materials Co., Ltd., due to the closure of a large number of restaurants, the company that mainly exports packaging boxes suffered a serious setback before April. However, the company quickly adjusted its production line and changed its production protection. Face masks, the latter accounted for 40% of its total exports.
"This year, our foreign trade should be able to reach RMB 80 to 90 million, achieving positive growth, but if we do not export anti-epidemic materials, our traditional business may experience a sharp decline."
Helen Feng pointed out that after the outbreak, the division of foreign trade industries was very obvious. "In Dongguan, factories that used to make clothing, shoes, handbags and other industries are basically closed now; however, factory orders for epidemic prevention materials, furniture, bicycles, and 3D printers have skyrocketed. They Schedule is very busy."
Xie Hua, the person in charge of Zhangjiagang Keen Machinery Co., Ltd., felt the same way. She said that the export orders of many furniture, home appliances and daily necessities in the Yangtze River Delta have grown rapidly, but the company that she works for is mainly engaged in plastic extruders this year. The foreign trade orders are less than half of previous years.
She believes that this is because the epidemic has interrupted the traditional trade process. For example, in the machinery industry, overseas customers need to go to the site to see the equipment before placing orders. This year, customers can't make it through, and orders have naturally declined. "Products such as daily necessities do not require on-site inspections. Many only need a sample, and even transactions can be completed online."
The epidemic has also accelerated the migration of China's foreign trade online . Under the epidemic situation, China's two consecutive Canton Fairs have been held online, and whether it is B2B or B2C, multiple cross-border e-commerce platforms have doubled.
Liu Hua, a sales manager of a daily necessities company in Zhangzhou, believes that an important reason for the intensified "container shortage" is the surge in e-commerce exports.
She said that traditional export logistics demand is basically stable, and the biggest variable is e-commerce exports. “This year a large number of factories have switched to online, which has brought a large market increase. In previous years, factories that could receive 100,000 orders were transferred to It is very likely that 200,000 orders have been received online. Now our company's e-commerce orders account for nearly 80% of the total foreign trade orders. Online orders are much more than expected, but the cabinets on the market have not prepared so many."
The "container shortage" will eventually pass, and the question facing China's foreign trade is how long can such a boom last?
In the short term, the current overseas consumer goods inventories are still low, and the contradiction of insufficient foreign production capacity is still prominent. Due to the base problem, China's fast-growing foreign trade is expected to continue to advance by leaps and bounds, and may set a higher growth rate in the first quarter of next year.
In the medium and long term, China's foreign trade will eventually return to a normal range. The future foreign trade prosperity depends on the strength of external demand on the one hand, foreign currency tightening, employment income and other factors are crucial; on the other hand, it depends on the recovery of the global industrial chain, which is still spreading no matter what. The epidemic is the biggest uncertainty.
For China, the reversal and expansion of foreign trade this year is neither anticipated earlier nor the result of active pursuit. China has not set a specific growth target for foreign trade for many years, and has replaced it with the requirement of "improving quality and efficiency", which is still a long-term goal.
