/ By TJ China Freight / Logistic

HOW TO CHOOSE A GOOD FREIGHT FORWARDER?

When you engage the services of a freight forwarder for your global shipping and business needs, what you expect to enjoy is the relationships they already have with various carriers such as ocean liners, truck companies, airline carriers. You should also benefit from their intricate knowledge of how export and import work in different countries. Moreover, they will be able to smoothly handle customs clearances for your goods, and track the status of the shipment as it makes its way from the supplier/manufacturer to you.

What is a Freight Forwarder?

A freight forwarder is an agent or business within the international trade industry that handles the shipping and transport of goods from one part of the world to another either by land, sea, or air. They are involved in the process of getting goods from suppliers and manufacturers, storing them, and facilitating the transportation logistics to end-users and consumers or some other distribution point. For instance, if you wish to ship freight from China, your best bet will be to hire a China freight forwarder to help you handle the daunting and complicated process of moving your freight either through ocean shipping,air freight, road or rail transport, or some other means.

Tips on how to choose a good freight forwarder

Nowadays, there are so many agents offering freight forwarding services. So, it may be difficult to find the best freight forwarder for your business. To that end, here are tips on how to choose a good freight forwarder that’s perfect for you.

1. Do your homework and know what you need

The very first thing that will help you secure the services of the best freight forwarder that will move your goods across international supply chains and trade routes is to do your homework. This means knowing what exactly you need. Ask yourself what kind of freight you want to ship in terms of volume and size. You should not expect exactly the same procedure when shipping goods like automobiles when you’re shipping commodities like foodstuffs.

You would also have a preferred mode of transport you wish to use, so it’s good for you to figure that out before contacting a freight forwarder. Moreover, some goods are fragile and require special handling procedures while others don’t. So, for such special shipments like dangerous or hazardous goods, you would expect the shipping process to be slightly more complicated.

When you clearly identify all your internal requirements, then you will be prepared for the hunt for the right freight forwarder to make the process smooth.

2. Consider the freight forwarder’s experience and network

This is non-negotiable!

The years of experience that the freight forwarder you’re looking to hire has is very crucial to the success of your business relationship. If they’re experienced, that means that they would have dealt with different situations that come up during the shipping process.

Examples of common situations are cases of port shutdowns, strike action by dockworkers, customs issues, cargo rerouting, warehouse problems, etc.  Here is where TJ China Freight comes in with more than a decade of handling and promptly and effectively resolving international shipping and logistics situations for customers all over the world.

With experience also comes an expansive global reach and sustainable business relationships. This manifests through good connections with various suppliers, local handlers and experts, trucking companies, and agents at numerous destinations. That’s how you can be sure your DDP shipments, FBA shipments, or any other freight will be handled well when they arrive at the destination country.

3. Find out the services they offer

By now, you know your shipping needs. However, you don’t want just any freight forwarder with experience. Instead, you need the best freight forwarder that offers the services that will meet handle your shipping requirements. That’s why you have to confirm the services that the freight forwarder offers. These services can range from preparing import and export documents, booking shipping space from air and sea carriers, packing and storing shipments, customs clearance, freight consolidation, tracking shipments, insurance, and many more.

When you know the services that the freight forwarder provides, then you will know if they can make your international shipping process go smoothly.

4. Inquire about their permits, credentials, and certifications

Before shipments can be transported from one part of the world to another, the freight forwarder in charge of the logistics requires permits and documentation to show that they can handle the cargo. Your company may wish to ship sensitive products such as hazardous materials. To handle these shipments successfully, the freight forwarder will require special licenses. This is why you need to verify if the freight forwarder has these credentials. It will show that they have taken specialized and required training to do the job well.

Another important consideration is whether the freight forwarder is a member of reputable associations such as >WCA. To be a member of such bodies, freight forwarders are required to be financially stable, operationally efficient, have integrity, and pass many other strict vetting requirements. The best freight forwarder will always ensure they are part of such associations to stay in touch with the latest developments in the profession and remain relevant and valuable to customers.

5. What risk management procedures do they have in place?

It is not uncommon for problems to arise during the process of international shipping. There are lots of conditions that can destabilize the transportation of your cargo, whether at the origin, during transit, or at the destination country. So, it’s important for you to verify whether the freight forwarder has procedures in place to manage risks. Freight forwarders that are proactive are the best in handling any issues and proffering solutions to problems as they arise.

A common risk management procedure that you can ask about is cargo insurance. The insurance cover is valuable if anything happens to your shipment, whether it’s a case of loss, damage, or theft. Your mind will be more at ease during the entire shipping process if you know that you’re covered by insurance or any other valid risk management policy. Your freight forwarder should be your partner when there is a crisis.

6. What is their customer service like?

Good customer service is the backbone of any business! All the credentials, experience, network and connections in the world amounts to nothing if a freight forwarder does not treat their customers well.

Imagine going through the process of securing your shipments from the supplier or manufacturer only for you to be unable to reach the freight forwarder handling the logistics and transport. If you have inquiries about freight rate or any other issues related to international shipping and the freight forwarder takes forever to respond to your inquiries, would you be willing to do business with them? This is why it’s important to verify what the freight forwarder’s customer service looks like.  You can ask about who the contact person is, who to talk to when a problem arises, how you will be contacted, and also check the reviews from previous customers.

Because international shipping can be tricky, these details are important, which is why clear communication between you and your freight forwarder is very crucial to the success of the endeavor. Great customer service even extends beyond when your shipment arrives. TJ China Freight is a tested and trusted China freight forwarder that offers unbeatable service to all its customers.

What about pricing and rates?

You may be wondering by now why there was no mention of pricing and rates in the tips on how to choose the best freight forwarder for your international shipping needs. Yes. It was deliberately left out. Why? Because deciding which freight forwarder to hire based on price alone is misleading and often has dire consequences.

For example, going with a freight forwarder because they offer the lowest rates on a shipment may lead to you having to pay more on subsequent shipments. This is because the freight forwarder would want to make up for the low price that they offered initially. Another possibility is that such freight forwarder that’s offering a low rate may have hidden some charges in the terms and conditions. All in all, low prices are often linked to dishonest dealings. You don’t want to fall victim, do you?

What your main focus should be while you are in search of the best freight forwarder for your business is whether your professional shipping needs will be precisely and promptly met. This is not to say that price is not important. Rather, it should not be your deciding factor on who to choose.

How to ask for shipping rates from your freight forwarder

Now that you know what you need to do to hire the best freight forwarder to handle your shipments, you should know the details you require to get the accurate quote and shipping rates for your products. This will help you prepare adequately and also help the freight forwarder serve you well.

To request for a quote from TJ China Freight, the information required include:

1. Product name.

The name of the product is required. Also, is the product with or without battery? Is it magnetic? Is it liquid? Are they dangerous goods?

2. INCOTERMS or Terms of Sale.

Incoterms refer to your International Commercial Terms with the seller, supplier, manufacturer or factory. Are your incoterms EXW (Ex works), Free on Board (FOB), or Cost, Insurance and Freight (CIF)?

3. Weight and Volume information.

If you have the goods packing lists, that’s the most preferred. Alternatively, you can send the gross weight and volume information of the shipment.

4. Address of the supplier or factory.

If your contract price term is EXW, then we have to arrange the pick up from your supplier or facotry, so the address of the supplier or factory will be needed for us to check the pick fee.

5. The destination address or port of destination.

For Express shipping or any type of door to door delivery, we will need your exact destination address and post code to check the exact cost, and for Air freight or any type of shipping to Port only, then your port information will be required.

6. Your preferred shipping method (air freight, express freight, sea freight, or train delivery).

The shipping cost is very different for the air freight, express freight, sea freight or train delivery, so pls let us know which shipping method do you prefer.

7. Your preferred time of delivery – how quickly do you want the shipment to be delivered.

If you don’t know what shipping way is more suitalbe for you, pls let us know your preferred time of delivery, we will try to recommend the best shipping method that can meet your demands.

TJ China Freight, your best freight forwarder in China

As a leading China freight forwarder that specializes in shipping goods from China to other parts of the world, TJ China Freight offers a broad range of freight services like express shipping, warehousing, drop shipping, FBA shipping, and many more. We partner with many reputable organizations such as DHL, UPS, Emirates, etc. to make sure your shipments arrive on time and in good condition. Contact us today for a quote and open the door to an amazing business relationship.

/ By TJ China Freight / Shipping

Compared with the cost of shipping FCL and LCL, who is higher?

FCL and LCL

In the container transportation business, we call a container, an exporter, a consignee, and a destination port, and the goods that meet these "four ones" conditions are called FCL, and we call a container, exporter, and consignee. As long as one of the three items in the port of destination is two or more export goods, it is defined as LCL cargo.

The transportation cost of LCL and FCL is very different in terms of procedures, time and cost. The two are by no means "1+1=2, 1+2=3". Similar to the simple relationship between addend and sum, it is a series of strange "inequalities" such as "1+1>2, 1+2>3".

The customs clearance procedures for LCL cargo are more complicated than FCL cargo, and it takes longer

First, the whole container of goods exactly meets the minimum unit of customs inspection, sealing, and release of the exporting and importing countries. For a batch of goods, as long as the documents submitted by the exporter and importer are reasonable, legal and intact, the export customs and import customs will handle it. After the relevant procedures and relevant taxes and fees are collected, customs clearance will be released soon. The LCL cargo will not be so simple and fast. As long as the goods in the container have a single shipment document that is faulty, the export customs will not release the goods. This is because the export customs must seal the exported containers before allowing the loaded containers to leave the country. Therefore, in the same container, the failure of any one of the goods to clear customs will inevitably affect the timely export and transportation of other goods.

Second, LCL cargo is far less extensive and flexible than FCL cargo. It requires additional solicitation by the transportation company and a reasonable combination of some conditions such as the port of shipment, port of destination, delivery date, variety, volume, and weight of the cargo. They are all suitable for exporting goods in the same container. These requirements are very difficult to implement and require a long time. If the transport company consigned by the cargo owner is not strong enough, then the time for cargo transportation will be delayed even longer.

Third, under normal circumstances, FCL cargo can be shipped directly at inland ports, while LCL cargo is only suitable for delivery at developed coastal ports due to relatively few inland sources and relatively more coastal sources. This will undoubtedly add a lot of extra trouble to the exporter. According to the relevant regulations of the Chinese government, exported goods must pass the inspection of the Commodity Inspection Bureau in the place of production and the place of export declaration. If the goods are declared for export within the scope of the province (autonomous region, municipality directly under the Central Government) where the goods are produced, only one commodity inspection is required for a batch of goods. Otherwise, if it is a customs declaration in another place, a batch of legally inspected export commodities must pass two inspections before the customs will release it.

LCL cargo is more expensive than FCL

Under normal circumstances, the freight and miscellaneous costs of FCL transportation in sea freight generally include three items: freight, transportation surcharges and port miscellaneous charges. The freight and transportation surcharges for LCL and FCL should be the same. The difference in cost is only in the assembling of the transported goods at the port of shipment and the unpacking at the port of destination.

It stands to reason that these two costs should not be very high. However, due to the huge differences in the level of labor costs between countries and regions in the world, exporters have little or no knowledge of the specific differences. The original LCL cargo ratio The freight cost of the whole container is very reasonable by adding a certain percentage of LCL, unpacking and storage fees on the basis of the overall consistency. However, in order to earn higher profits, carriers often use "fuzzy The method of "learning" does not specify what items will be charged in the quotation, but only generally according to the destination port to which the type of goods are shipped, and the amount of each freight ton is charged, and the port miscellaneous charges are reported temporarily. What's more, the carrier has no obligation to explain, and the shipper has no room for bargaining. The amount of charge depends on the specific circumstances.

In addition, it should be noted that in import and export commodity trade, the larger the quantity and total value of each transaction, the lower the transaction cost. Conversely, the smaller the quantity and total value, the higher the transaction cost.

Compared with FCL cargo, the quantity and total value of LCL cargo are generally smaller. Therefore, from this perspective, the transaction cost of LCL cargo must be higher than FCL cargo. This is because the cost and mailing fee of the finished sample, the communication fee such as fax and telephone, the notification fee of the letter of credit, the customs declaration fee of the import and export goods, the certificate of origin, etc. are all based on the number of copies rather than the business. The size of the amount to be charged. When these business expenses are finally allocated to transaction costs, the unit costs with a large transaction volume will have a small share, and the unit costs with a small transaction volume will have a large share. We should be aware of this.

/ 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.

 

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

 

 

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

 

 

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.

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

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.

/ By TJ China Freight / Shipping

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

When the overseas epidemic has not been effectively controlled, telecommuting and home isolation have become the norm. The suspension of offline transactions in the past has accelerated the shift of international trade to online. In this context, China's foreign trade exports have accelerated recovery, especially the rapid increase in cross-border e-commerce orders.

Recently, the "home economy" related products represented by furniture, home appliances, toys, and daily necessities have continued to explode. China’s small commodity export orders have surged, and many manufacturers’ orders have already been scheduled to 2021.

Correspondingly, due to the imbalance of China's import and export trade, container shipping export freight rates remain high, and containers are "difficult to find". These problems have become more prominent under the stimulation of huge transportation demand.

The explosive growth of export orders and thorny transportation problems have put Chinese exporters facing tremendous pressure and challenges.

Export orders soared, shipping costs soared

"This time of the year is the peak season. In previous years, the factory was very busy and the number of offline purchases was countless. This year, affected by the epidemic, almost all of them have adopted online ordering." Wan Rufang, general manager of Zhejiang Fengfan Stainless Steel Products Co., Ltd., told China A reporter from Aviation Weekly said.

Ju Jianshuang, general manager of Shanghai Jiesheng Furniture Co., Ltd. also introduced: "Compared with last year, this year our company's export orders have increased by about 10%."

But the headache for these exporters is that although the volume of export orders has exploded, their profits have not risen but fallen. The main reason is that the increase in shipping costs is even more alarming.

At the beginning of this year, the outbreak of the new crown pneumonia epidemic caused most Chinese companies to stop work and production, leading to the cancellation of many orders and a decline in freight volume. Shipping companies have also adopted measures such as reducing capacity and reducing voyage density in response to market changes. However, shortly afterwards, the epidemic in China was effectively controlled, and companies gradually resumed work and production, exports basically recovered, and freight volumes rebounded rapidly.

However, judging from the market reaction, the shipping company's capacity increase did not match the cargo volume, which caused the freight rate to rise all the way. The direct reason for the recent sharp increase in freight rates is that the overseas epidemic has affected the efficiency of port loading and unloading. At the same time, the logistics turnover is not smooth, the shortage of containers is very prominent, and the supply and demand are seriously mismatched. For this reason, shipping companies have begun to levy congestion surcharges, peak season surcharges, and lack of containers surcharges.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!
Latest SCFI data

According to the Shanghai Export Container Freight Index (SCFI) released by the Shanghai Shipping Exchange, on December 18, the market price of Shanghai’s exports to European basic ports (including maritime surcharges) was US$3,124/TEU, an increase of 6.0% from a week ago. Compared with the US$1,508/TEU a month ago, it has doubled.

The price of US$3,124/TEU on the Asia-Europe route is the highest ever since SCFI was released in 2009.

During the same period, the market prices (including shipping surcharges) for exports from Shanghai to basic ports in the West and East of the United States were 3,900 US dollars/FEU and 4874 US dollars/FEU, which were also at historical highs.

Cai Jiaxiang, vice chairman of the China Association of Foreign Trade and Economic Cooperation Enterprises, said bluntly: "Sometimes, the sum of various surcharges even exceeds the freight."

Exporters' profit shrinking affects foreign trade stability in the long term

It is understood that about 80% to 90% of foreign trade export enterprises in China sign the FOB clause in the export contract, that is, the buyer pays for the freight.

Cai Jiaxiang analyzed: "In a short period of time, because Chinese exporters who sign FOB clauses will pay the freight by the buyer, it will not be greatly affected in the early stage of the price increase. But from a long-term perspective, if the freight continues to rise, the export The business is bound to be affected to a certain extent."

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

 

 

He took the US importer as an example. If the buyer needs to pay up to 5,000 US dollars in freight per box for a long time, the buyer's import cost will be greatly increased, and the Chinese exporters may be required to share the high freight.

Even if the Chinese exporters who sign the FOB clause do not need to bear the ocean freight, they still have to pay for the transportation costs of the goods from the factory to the dock. At present, affected by the lack of containers, exporters can only obtain empty containers by waiting for empty containers or raising the price. In order to ensure shipments, most exporters will choose to increase the price to pick up the box, which also increases the export cost of Chinese exporters.

More importantly, the continued high freight rates will also affect the purchasing power of overseas consumers. Due to the increase in costs and the substitutability of some commodities, importers may consider whether to use substitutes when choosing commodities.

Wan Rufang said: “Our company’s order volume from August to October was relatively large. Compared with March to June, it has doubled. But starting from November, some countries have adopted closed measures and freight Excessively high, to a large extent affect the customer's purchase volume."

On the other hand, the Chinese exporters who signed the CIF clauses, as they directly bear the export freight, have a deeper understanding of the pain points of high freight, and it has effectively affected their own profits.

Ju Jianshuang's company faced this situation. He reluctantly said: "Our company is mainly based on signing CIF contract terms. In most cases, the ocean freight of exported goods is borne by us. The recent rapid increase in freight has caused the company's costs to rise sharply, and the monthly profit is about reduced. 600,000 yuan."

Ju Jianshuang said that the high freight rates are too burdensome for companies that "small profits but quicker sales" and mainly out-of-stock volume. "We will consider negotiating with customers to postpone shipments or raise prices appropriately. But the main solution is to give up some profits by the company itself to maintain normal operations."

He believes that a balance should be maintained between production companies and transportation companies to ensure the living space of both parties.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

 

 

However, even in the current era of "hard to find a box" and frequent freight charges, seaborne export is still the first choice for Chinese exporters.

There are two main reasons for this. One is the export destinations of some exporters, such as the United States, Canada, Malaysia, Singapore and other countries. These destinations cannot deliver goods by means of transportation other than sea or air, and air transportation has certain transportation restrictions and the freight rate is too high. , Most exporters will not consider; second, although shipping costs have risen sharply, they are still lower than road, rail, air and other transportation methods. At the same time, shipping has greater advantages in capacity and can better meet the needs of Chinese exporters.

Cai Jiaxiang further explained: "In the early days, shipping goods to Europe via the China-Europe Express train cost about US$10,000 per TEU. At present, although the freight rate of the China-Europe Express train has been lowered to US$7,000-8,000 per TEU, the price is still higher than that of ocean freight. From the perspective of many Chinese exporters, price is more important than speed."

Chinese and U.S. regulators frequently call for exporters to restore capacity

In response to the current difficulties faced by Chinese exporters, the Ministry of Commerce of China has paid close attention and responded publicly.

Gao Feng, spokesperson of the Ministry of Commerce, said at a recent press conference that many countries around the world are facing similar problems in foreign trade logistics due to the impact of the new crown pneumonia epidemic. The mismatch between supply and demand of capacity is the direct cause of the increase in freight rates. Factors such as poor container turnover have indirectly pushed up shipping costs and reduced logistics efficiency.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!
Gao Feng, spokesperson of the Ministry of Commerce

He further emphasized: "The Ministry of Commerce will work with relevant departments to increase capacity allocation, support accelerated container return transportation, improve operational efficiency, and support container manufacturing enterprises to expand production capacity. At the same time, it will increase market supervision and strive to stabilize market prices. Provide strong logistics support for the stable development of foreign trade."

Prior to this, the regulatory authorities of China, the United States and other countries have also stated that they will pay close attention to issues such as rising freight rates in the shipping market.

In September of this year, the Ministry of Transport of the People’s Republic of China interviewed all shipping companies operating China-US liner routes, emphasizing that it will strengthen the supervision of China-US routes, requiring that the capacity, routes and schedules must be filed, and freight and all surcharges must be regulated. reasonable.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

 

 

Also in September, the US Federal Maritime Commission (FMC) also issued a warning to shipping companies that it would crack down on potential violations of competition laws. Soon after, FMC also announced the toughest measures to increase the supervision of the three major shipping alliances in response to issues such as freight and demurrage. It is required that shipping alliances must submit specific trade data to FMC every month, whereas previously it was only required to submit every quarter.

In this regard, Cai Jiaxiang said that the European and American regulatory policies are relatively timely. The EU has the most stringent anti-monopoly issues, and the United States is not inferior. These areas have achieved certain results in freight control, and prices are relatively stable.

Regarding the domestic export trade market, Cai Jiaxiang believes that “restoring the original normal capacity and flight density is the top priority to solve the problem.”

He further stated that the voice of the Ministry of Commerce can improve the current market conditions to a certain extent, but it still needs to increase efforts. "Call on the Ministry of Transport to interview shipping companies to restore normal capacity and flight density, and the State Administration for Market Supervision and Administration will use anti-monopoly laws reasonably and adopt legal weapons to cut the root cause of shipping problems." Cai Jiaxiang said.

/ By TJ China Freight / Shipping

Indian exporters: The market is completely crazy!

Due to the unbalanced import and export situation, the shortage of containers in India is causing the cost of shipping companies and importers and exporters to rise sharply.

 

"The cargo volume of all routes has jumped in the range of 20% to 100%."

Mark S. Fernandes, director of the IMC Chamber of Commerce and Industry, told the Business Standard: “Because customers are not ready to absorb price increases, exporters sometimes face losses.”

Indian exporters: The market is completely crazy!

"Our situation is very helpless. The customer is not ready to pick up the goods, and the shipping company has increased the freight. So we have to bear the cost because the materials have been produced and need to be delivered."

An Indian exporter, who asked not to be named, said: “The market is completely crazy, and shipping companies have formed a business alliance to make up for the losses it suffered during the global blockade earlier this year.”

 

Although the freight rate of the container part has risen, if booking in advance, the availability of the container will be eased to a certain extent.

Now, exporters are planning to cooperate with shipping companies 1-2 months in advance to ensure that the goods are shipped on time. If the plan is better, there will be no major delays in obtaining containers.

Indian exporters: The market is completely crazy!

Balmer Lawrie, Hyundai and Nathani are some of the container manufacturers in India. They started to produce these equipment in China at a very competitive price of US$1,000 per container, while the price of containers manufactured in India was US$1,800 to US$2,000.

 

Shipping companies can order more containers, but once the trade situation returns to normal, those newly ordered containers will become inventory.

Therefore, shipping companies are not keen to invest in new containers.

"It is not easy for shipping companies to survive. Operating costs have risen and trade has been hit as a whole. As a result, there are fewer flights and even have to empty ships, and fuel costs have risen sharply.

Indian exporters: The market is completely crazy!

Due to the epidemic, if certain preventive measures are not taken, the crew cannot breathe a sigh of relief. The measures taken will take time and additional costs. The entire industry chain has cost burdens, not just exporters. "

 

At the same time, ports such as JNPT and Chennai are striving to maintain operational efficiency in order to control the cost of shipping and importers and exporters from the port side.

 

"The port's cargo growth, we are in a recovery mode. We will ensure that there will be no congestion in the port, so that no stakeholders will incur additional cost burdens," said a senior transportation official of JNPT.

/ By TJ China Freight / Shipping

The export of these products is “extraordinarily hot”, and the foreign trade rebounds in 2020

Which industries are the lucky ones this year? Today, I will give you an inventory. Which industries will the export pick up in 2020?

1. Furniture

In the second half of this year, export orders for the furniture industry increased significantly. According to data from Alibaba International Station, as of the end of October, the furniture industry's transaction volume increased by 191% year-on-year, and the number of payment orders increased by 112% year-on-year. Furniture products such as sofas, beds, office desks and chairs, dining tables and chairs, and children's beds are most popular in overseas markets.

2. Small appliances

According to statistics from iiMedia.com, in the first half of this year, China's exports of electric frying pans, bread machines, and juicers increased by 62.9%, 34.7%, and 12.1% respectively. According to data from Alibaba International Station, the demand for air purifiers, air fryer, facial care appliances, and refrigerators all increased by more than 200% year-on-year.

3.LED

According to the "Report on China's Lighting Industry Exports in the First Three Quarters of 2020" issued by the China Lighting Association, in September 2020, China's lighting industry exports were US$5.113 billion, a year-on-year increase of 44.18%, which was the largest in a single month this year. The growth rate has achieved double-digit growth for four consecutive months since June. Among them, the export value of LED lighting products was US$3.4 billion, a year-on-year increase of 40.5%, and the cumulative export value of LED lighting products from January to September this year was US$23.46 billion, a year-on-year increase of 5.45%.

Industry insiders told reporters that the reason for the increase in orders for the industry’s recovery is that the domestic control of the epidemic is relatively fast, and many overseas orders are flowing domestically. In addition, the backlog of domestic orders has entered the late stage of implementation, and LED exports have seen a substantial increase.

4. Computer

In the first half of the year, the consumption increase of the "home economy" drove the export of notebook computers and mobile phones to increase by 9.1% and 0.2% respectively. The hot sales of computers really continued. By the third quarter of 2020, global PC shipments increased by 12.7%, a 10-year high.

When introducing the import and export situation in the first three quarters of this year, the General Administration of Customs pointed out that my country's consumer electronics product industry chain and supply chain have obvious advantages. The total export of notebook computers, tablet computers, home appliances and other "home economy" commodities is 880.8 billion yuan, an increase of 17.8%. .

5.3D printer

According to data from the National Bureau of Statistics, boosted by overseas hot sales, China's 3D printing equipment output increased by 87.7% year-on-year in the first quarter, and this growth rate further rose to 344.7% in April.

Domestic 3D printer manufacturers are mainly located in Shenzhen, Dongguan and the Yangtze River Delta in the Pearl River Delta. They have a solid foreign trade foundation and generally show a trend of rising against the trend in the epidemic.

6. Bicycle

Bicycles have also accelerated their "riding" abroad. Statistics from the General Administration of Customs show that as of September this year, the number and value of bicycle exports have achieved positive year-on-year growth for five consecutive months. According to relevant data from Alibaba International Station, the number of orders in the bicycle industry in October increased by 220% year-on-year.

7. Toys

As the world's largest toy exporter, China's toy exports also welcomed good news in the second half of the year. The sales volume of Yiwu AliExpress toy factory started to pick up in July. Since July, the four-month sales volume has more than doubled from the first half of the year. It is expected that the sales volume in the fourth quarter of this year may reach three times that of the first half. According to data from the China Toys and Baby Products Association, traditional toys exported US$3.54 billion in July, an increase of 21.2% year-on-year; in August they achieved exports of US$3.94 billion, an increase of 2.6% year-on-year; in September they achieved exports of US$4.11 billion, an increase of 7.9% year-on-year .

8. Textile and clothing

The latest data released by the Consumer Goods Industry Department of the Ministry of Industry and Information Technology shows that from January to November this year, my country’s textile and apparel exports reached US$265.2 billion, a year-on-year increase of 9.9%.

9. Electronics, medical

Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce, said that since this year, my country's exports in the fields of electronics, textiles, and medical care have maintained rapid growth. Bai Ming believes that in the context of the impact of the epidemic on the industrial chains of other countries, many foreign trade orders have been transferred to China, which has also won development opportunities for Chinese foreign trade companies.

An electronics factory in Dongguan is a manufacturer of electronic components. 70% of the company's orders are exported to European and American markets. According to the deputy general manager of the factory, since the beginning of this year, due to the impact of the epidemic, there has been a strong demand for 3C electronic products, and orders from electronics companies have generally increased.

A hardware manufacturer is a metal parts processing company that specializes in springs. According to the person in charge of the company's brand business department, since this year, the company has seen a downward trend in orders for traditional products in the fields of household appliances, and accessories for the medical and personal hygiene fields. Products, export orders have increased significantly. "This year, the order growth of our emerging business is expected to be around 30%. The order growth of the emerging business has made up for the loss of the decline in orders for traditional products."

10. Spicy strips

CCTV news on December 2 that Chinese cuisine has always been praised by the world. In recent years, with the continuous development of industries such as culture and logistics, Chinese snacks have also become a new favorite of overseas consumers.

Take spicy strips as an example, exports have continued to grow in recent years. According to relevant platform data, the export value of spicy noodles in the second half of 2020 increased by more than 120% year-on-year, and they were exported to 160 countries. The countries that bought the most spicy noodles overseas were Japan, Singapore, South Korea, and the United States. 

Related tips:

Accompanied by the "explosive orders" of exports is the "difficulties in recruiting workers." The demand for labor in factories has increased, but the number and speed of return of personnel have continued to be low. Many foreign trade processing companies in coastal areas such as Guangdong and Zhejiang are unable to complete the skyrocketing overseas orders. Please pay attention to the relevant impact.

/ By TJ China Freight / Shipping

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

In recent months, the container market has experienced extreme conditions. High freight rates and container shortages have plagued the market and will continue for some time. In addition to the short plug of the reefer, the import and export of the reefer will also be a new challenge.

Large companies and logistics companies that need to ship refrigerated goods must be prepared, and shipping companies have announced that they will stop receiving freezers.

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

It is reported that the shipping company Hapag-Lloyd announced that it will suspend all 40' freezer bookings in Germany, Austria, Switzerland, Hungary and the Czech Republic until the end of December 2020.

"Our goal is to support all confirmed export orders, but reservations may be cancelled for individual cases. We will try our best to provide all customers with the best service, but we expect that the situation will remain very tense in the coming weeks." Herb Roth wrote in a statement.

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

"This once again shows that the market is facing severe container equipment challenges. This is a prominent problem that affects the supply chain in many places, not just the supply chain in Asia." Shipping analyst and chief executive of Sea-Intelligence Consulting Officer Lars Jensen said.

In addition to Europe, Hapag-Lloyd announced on December 3 that the port was congested due to stricter customs inspection and disinfection of imported food entering Huangpu. From now on, we will temporarily stop accepting reservations for refrigerated containers entering Huangpu Port in China until further notice.

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

In view of the above situation, customers are kindly requested to provide written confirmation as soon as possible. You can have the following options:

(1) If circumstances permit, accept delivery at the current port of discharge;

(2) Transfer your refrigerated container to another port/destination;

(3) Transport your refrigerated container back to the port of departure;

(4) If there is no instruction from the customer, Hapag-Lloyd reserves the right to make all necessary arrangements.

Please note that for any of the above options, all additional costs, risks and liabilities related to storage or transportation of the goods after unloading will be borne by the owner of the goods.

At the same time, Hapag-Lloyd also announced that it will temporarily stop receiving orders for imported reefer containers from Busan, South Korea to Tianjin, China , with immediate effect.

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

 

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

In addition, my country has recently increased its inspection of imported refrigerated goods, making the inspection of refrigerated goods more stringent and time-consuming. Ports are facing problems such as slow pickup of containers and port congestion.

Ocean Network ONE stated in the announcement that it will suspend the delivery of refrigerated containers to Huangpu Port from November 26. In addition to the latest announcement of ONE, Xiamen, Fuzhou and Fuqing have also suspended receiving imported refrigerated containers.

ONE stated that due to the stricter inspection and disinfection requirements imposed by customs on refrigerated containers imported into Xiamen/Fuzhou/Fuqing, the delivery of freezer containers has been slow and is facing congestion.

In view of this situation, from the date of shipment on December 8, 2020, ONE will stop accepting all orders for refrigerated goods destined for Fuzhou and Fuqing, China , until further notice.

Starting from the loading date on December 9, 2020, ONE will stop accepting all reservations for refrigerated cargo to Xiamen, China or for transshipment via Xiamen , until further notice.

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

 

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

 

 

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries
▲ONE announcement

For containers in transit, ONE strongly recommends that customers consider changing the destination to another port, especially for time-sensitive goods, such as fresh and refrigerated goods.

For refrigerated containers that have been transshipped to Xiamen, or refrigerated containers that have been detained at the transshipment port for further transportation to Xiamen, please note that all related expenses will be borne by the consignee and paid upon delivery.

For containers that have been transshipped to Fuzhou/Fuqing or detained at a transit port, once the Fuzhou/Fuqing feeder space is available, a specific surcharge will be charged at the time of loading.

/ By TJ China Freight / Shipping

Drewry analyst: The profitability of container ports this year is not as good as that of container ship owners

Drewry's report shows that the revenue of container port operators dropped by nearly US$1.9 billion in the first half of 2020. In addition to the well-known global epidemic, the decline in freight volume and port congestion are also reasons.

Drewry Port Analyst Eleanor Hadland said in the webinar: "The profitability of container ports this year is not as good as that of container ships... Our cooperative operator's transaction volume in the first half of this year dropped by 4%, while Drewry estimates global port handling volume. A decline of 5.6%... In the first half of the year, 80% of companies reported a decline in revenue. In terms of profitability, 70% of the companies’ profit before interest, taxes, depreciation and amortization in 2020 Lower."

Prior to the outbreak, Drewry predicted that sales in the first half of 2020 will increase by 4.8%. This is equivalent to a global revenue growth of more than 7%.

"However, due to a nearly 6% drop in sales volume, the revised estimate is now 5% lower than in 2019 and 11% lower than the pre-epidemic forecast. For the entire industry, we forecast the interest, tax, depreciation and amortization in the first half of the year. Pre-sales profit will drop by about 16% from 2019 and 21% lower than the forecast before the epidemic."

Most operators have taken cost-cutting measures. During the epidemic, due to the adoption of new working methods, and due to illness or quarantine requirements for workers, the terminal must pay for absenteeism, so the actual labor cost has increased.

Turkey-based operator Yildirim announced today that it will add a surcharge to cover the additional expenses during the new crown epidemic . The company said: “Since the beginning of the epidemic, Yilport Holding has taken additional measures to ensure the continuity of all business partners. However, the increased cost of additional health protection and protective equipment has made it difficult for us to balance our expenses. Since January 1, 2021 Starting today, we will charge an emergency surcharge for each import and export container ."

Martin Dixon, a shipping analyst, said: " The most important factor in the surge in ship operating costs is labor costs. Due to the inconvenience of crew changes, labor costs have soared . According to forecasts in 2019, labor costs can only increase by 1.3%, but in fact, in 2020 Labor costs rose by 6.2%."

/ By TJ China Freight / Shipping

Dry cargo: how dangerous it is to conceal the transportation of dangerous goods

Regarding the concealment of import and export goods, let’s look at a case first:

On August 4, a violent explosion occurred in the port area of ​​Beirut, the capital of Lebanon, on the evening of the 4th. Preliminary statistics showed that at least 100 people were killed and more than 4,000 were injured in the explosion. The Prime Minister of Lebanon confirmed that up to 2,750 tons of explosive chemical ammonium nitrate stored in a port warehouse had exploded.

These ammonium nitrates were piled up in Beirut's port area for six years "without the necessary safety measures"!

It is understood that ammonium nitrate may explode when it is shaken or close to the fire source. The conditions of the explosion are not difficult to achieve. Nitric acid will decompose at about 180°C.

Prior to this, ammonium nitrate has caused too many major explosion accidents. Developed countries such as the United States, Britain, and France have all experienced the horror of the ammonium nitrate explosion. Bloody events are disasters for every country encountered, even for humans.

Everyone must have learned about this explosion from the overwhelming reports. However, this major accident called Lebanon’s national disaster is only one of many port and cargo ship accidents. It is not difficult to find that there have been several foreign explosions in the past. It happened in ports or in cargo ships or trains.

This is bound to be reminiscent of the safety of imported and exported goods, and under-reporting is a thing most hated by various cross-border companies.

Customs declaration: This batch of goods are toothbrushes.

Glass: Who is your name?

Customs declaration: This box of goods is paper towels.

Bath towel: You insult people!

...

 

These are all concealment of ordinary goods, and may only involve smuggling and other issues, but a concealment of dangerous goods is like sending an untimely bomb to freight forwarders, shipping companies, and port workers. Once an accident occurs, the consequences are disastrous.

Consequences of concealment of general cargo:

In order to evade tax, deliberately concealing part of the taxable goods constitutes smuggling. The specific legal consequences should be determined in conjunction with the amount of tax evasion.

Consequences of under-reporting of dangerous goods:

Serious accidents caused by improper storage and stowage locations; damage to the safety of the crew and the vessel; use of water guns to extinguish water damage to other containers and cargo in the cabin; delays to the entire route; huge operating costs, investigation costs, etc. Etc.; fines required by local maritime customs; customs detaining boxes for several years; may be classified as criminal smuggling and other crimes; pollution to the environment...

Measures to prevent false reports

1. Strengthen professional and safety knowledge education

As a cross-border industry practitioner, we must strengthen the training and education of hazardous materials and safety knowledge, and improve our professional service capabilities.

2. Strengthen the credit review of shippers

Strengthen the credit review of the shipper, and find out the actual source of the goods for the goods whose factory address and name are relatively acceptable. In many foreign ports, concealment of goods is a criminal responsibility, so practitioners must take it seriously.

3. Ensure clear declaration of product name

Make sure that the shipper’s declaration of the cargo brand is clear. If the declaration of the cargo name is vague and general, you must ask clearly. Some chemicals are suspected of being dangerous goods, and the shipper must be required to provide chemical safety instructions and corresponding test reports.

4. New customer information is true

In addition, you need to pay attention to whether the information of new customers is true, especially those new customers who do not need to provide customs declaration, warehousing, and towing services.

5. The product name is inconsistent with the bill of lading

If the product name is inconsistent with the bill of lading, the freight forwarder Yaao will take the initiative to check the customs declaration product name to ensure that the three orders of this batch of goods are consistent.

/ By TJ China Freight / Shipping

Interpretation | What should I do if there is a problem with the quality of imported and exported goods?

In international trade, the quality of imported or exported goods may also need to be exchanged. Recently, we have also received inquiries from multiple companies regarding exchange and customs clearance. Let’s take a look at the specific operations.

Supervision method

In view of the situation that the import and export goods of enterprises in international trade need to be exchanged due to quality problems, etc., the customs has set up a special supervision method "Compensation of Goods at No Cost" (code 3100).

Compensation of goods at no cost means that after customs clearance of imported and exported goods, due to damage, shortage, poor quality or inconsistency in specifications, the consignor, carrier or insurance company of the import and export goods will freely compensate or replace the same or replacement goods with the original goods. Goods conforming to the contract.

The original import and export goods related to the free compensation goods are returned to and from the country, and the supervision method is "other" (code 9900).

 

Interpretation | What should I do if there is a problem with the quality of imported and exported goods?

Reporting time limit

The taxpayer shall declare to the customs for the import and export formalities of the goods for no-cost compensation within the claim period stipulated in the original import and export contract and within 3 years from the date of import and export of the original goods.

Before making a formal declaration to the customs, the following preparations must be made:

For import and export goods without cost, the original import and export goods should be returned out and in the country first, and the supervision method should be filled in other (9900), and the original import and export goods declaration number should be noted in the remarks column of the declaration form. When declaring import and export goods without cost, the supervision method should be filled as free goods (3100), and the original import and export goods declaration number and the original import and export goods return and entry declaration number should be noted in the remarks column of the customs declaration form.

1 , imported free replacement of goods, shall submit the following documents when applying:

1. Customs declaration form for original imported goods;

2. The export declaration form for the return of the original imported goods out of the country (the remarks column of the declaration form should indicate the number of the original import goods declaration form) or the certificate of abandonment of the original imported goods for customs processing (the original imported goods are short and the imported goods are not Need to submit);

3. Original imported goods tax payment certificate or "Tax Levy and Exemption Certificate";

4. Claim agreement signed by buyer and seller;

5. When the customs considers it necessary, it shall also submit an inspection certificate or other relevant certification documents issued by a qualified commodity inspection agency that the original imported goods are damaged, short, poor in quality or inconsistent with specifications.

2. The following documents shall be submitted when declaring goods for export without cost compensation :

1. The original export goods declaration form;

2. The import declaration form for the return of the original export goods into the country (the remarks column of the declaration form should indicate the number of the original export goods declaration form, because the original export goods are short and the export free compensation goods do not need to be submitted);

3. Original export goods tax payment form;

4. Claim agreement signed by buyer and seller;

5. When the customs considers it necessary, it shall also submit an inspection certificate or other relevant certification documents issued by a qualified commodity inspection agency that the original exported goods are damaged, short, poor in quality or inconsistent with specifications.

Tax collection

Imports of goods that are compensated at no cost will not be levied import duties and customs levies on behalf of the customs; for goods that will be compensated at no cost, no export duties will be levied.

No export duties will be levied on the replaced original imported goods when they are returned out of China. When the replaced original export goods are returned into the country, import duties and import duties are not levied on behalf of the customs.