Businesses that engage in international transport most likely prefer freight forwarding, but it is also an applicable method of transport even for personal use. The freight forwarding companies facilitate the shipment of goods to the destinations by using various carriers such as road freight, air freight, railway freight, and ocean freight.
If you don’t have any idea about freight shipping, you’ll find freight forwarding intimidating. Thus, if you engage in a business that involves international transport, it makes sense to understand the facts about freight forwarding.
WHAT ARE FREIGHT FORWARDING FIRMS?
Transporting goods from its origin to another destination is one of the services of freight forwarding firms. The freight forwarder works as a middleman between the transportation services and the shipper. They are responsible for arranging the entire process including the storage and the shipment of the goods. Likewise, they also negotiate the cost of the transport and choose the most reliable, fastest, and economical route.
SERVICES OFFERED BY FREIGHT FORWARDERS
Hiring the services of freight forwarding companies is advantageous to your business. They can help you in transporting the goods to your customers. As they are knowledgeable and expert about shipping of goods, they ensure that the merchandise will be delivered on time and in good condition.
Some of the services that freight forwarders offer are the following:
Customs clearance
Insurance
Packing
International import and export documentation
Inventory management and
Storage
Through the services of freight forwarders, the entire process of importing and exporting of goods becomes less stressful. They can also assist you in the packing of goods, thus reducing the pressure from you.
CHOOSE A RELIABLE FREIGHT FORWARDING COMPANIES
If you’re thinking to hire a freight forwarder, make sure to choose well-established and reliable freight forwarding companies. This gives you the assurance that they have strong experience about the business and good network of contacts. Likewise, experienced freight forwarders can deal and solve any issues about the transport of your goods efficiently and quickly.
As you’ll entrust your goods or merchandise to a freight forwarder, it makes sense to work with them harmoniously. It’s not enough to seek the service of a company that you can rely on and trust, but also with outstanding customer service. This way, you’ll have peace of mind that your shipment will arrive on time and safely.
Before entrusting your goods to freight forwarding firms, make sure that all the documents for transporting the goods are completed.
Against the backdrop of the global raging COVID-19 pandemic, this year's global container shipping industry seems to be sitting on a magical "seesaw". On one side, there is a shortage of containers and high freight rates, and the other is port congestion . The two issues alternate across oceans and continents, torturing the fragile nerves of cargo owners.
However, although industry analysts sing the recovery of the operating industry, industry insiders are still cautious about the "boom" that occurred during the epidemic, especially after the middle of next year, the market supply and demand trend is still like a fog, and there are still larger ones. Uncertainty.
The problem of shortage of containers has attracted the attention of the Ministry of Commerce. On December 3, the spokesperson of the Ministry of Commerce pointed out that, on the basis of the preliminary work, the Ministry of Commerce will continue to promote the increase of transportation capacity, support the acceleration of container return, improve operation efficiency, support container manufacturers to expand production capacity, and increase The intensity of market supervision, efforts to stabilize market prices, provide strong logistics support for the steady development of foreign trade.
The epidemic caused port failure
The problem of container shortages is happening alternately across the Pacific and the Atlantic this year.
According to Bloomberg data, in the first quarter of this year, European and American ports such as Hamburg in Germany, Rotterdam in the Netherlands, Antwerp in Belgium, and Long Beach and Los Angeles in the United States have all fallen into a state of extreme shortage of containers. The port container holdings have reached a record low, while Chinese ports are stranded in a large number of containers. Waiting for quarantine. In the third quarter, the situation was reversed. The overseas epidemic was severe and the port was understaffed. According to statistics, the Port of Sydney, Australia had piled up at least 50,000 TEUs of containers to be processed. Many ports were charged with congestion charges. Hard to find" status.
Generally speaking, problems such as shortage of containers and port congestion are routine problems in the industry, which are easy to appear in peak seasons, and are also related to port processing efficiency. However, the failure of port operations caused by the epidemic has undoubtedly extended the loading and unloading time of containers.
According to a reporter from the Securities Times, due to the need for epidemic prevention, the Port of Los Angeles has temporarily reduced the number of dockers and port personnel by about one-third, and the loading and unloading of ships has been greatly affected. Due to the continuing effects of shortages of equipment and prolonged loading and unloading time in ports, a large number of imported containers have been backlogged in European and American ports, congested terminals and poor container turnover, which has hindered cargo transportation.
The global container shortage difference can be seen from the Container Availability Index (Container Availability Index) released by the container source traceability platform xChang: In July, the supply of 40-foot containers at the Port of Los Angeles was insufficient; by the end of September, the port’s container availability index had increased by 4 times. Oversupply; since September, Qingdao Port (6.110, -0.02, -0.33%) usable containers have begun to decline, and by October the usable index of 40-foot containers has fallen by half, and 20-foot containers have also been in short supply.
Strong Asian exports become an important driving force for recovery
Looking at the whole year, the geographical imbalance of the shortage of containers is more significant, which is directly related to the timing of the outbreak.
According to data provided by the United Nations Conference on Trade and Development (UNCTAD), in mid-March, the number of global container ship arrivals began to fall below the level of 2019 and did not start to recover until the third week of June. This timetable basically coincides with the World Health Organization’s listing of the new crown pneumonia as a pandemic and the deteriorating epidemic in Europe and the United States. On the other hand, the number of container ship arrivals at Chinese ports has gradually recovered since June, which is also in line with China’s The lock release time corresponds to that.
In terms of absolute volume comparison, most regions started to recover from the third quarter, but globally, the port container ship berthing volume in early August was still 3% lower than the same period last year, and North America and Europe were 16.3% lower than the same period last year. And 13.2%. In contrast, the number of port calls in China (including Hong Kong) has exceeded the level of last year, an increase of 4.1%.
China's shipping import and export took the lead in the recovery. The fundamental factor is that the domestic epidemic prevention and control has achieved major results, and the production side has taken the lead in recovery, effectively making up for the global supply gap caused by the impact of the epidemic, and also supporting the continuous growth of exports.
China Customs statistics show that in the first and second quarters of this year, China’s import and export growth rates were -6.5% and -0.2%, respectively. They were reversed in the third quarter, with a year-on-year growth of 7.5%. The total value of imports and exports reached 8.88 trillion yuan. Stable, the cumulative growth rate turned negative to positive. It is worth noting that due to the changes in lifestyles caused by the epidemic, the export of notebook computers and home appliances has increased; the export of epidemic prevention materials has also risen rapidly. The export of textiles including masks reached 828.78 billion yuan, an increase of 37.5%; medical materials and medicines, The export of medical instruments and equipment increased by 21.8% and 48.2% respectively.
According to information provided by UNCTAD to a reporter from the Securities Times, although China was the first country to be affected by the epidemic, in the first quarter, China’s overseas trade, transportation and exports were not interrupted, so the transportation at Chinese ports remained unobstructed; on the contrary; It was in the second quarter that due to the escalating blockades of various countries, economic activities were restricted, and the transportation of logistics personnel was blocked, leading to a sharp drop in imports from various countries. At this time, the impact on port operations increased significantly. Subsequently, the epidemic situation in Europe and the United States became more and more serious, and the key figures of the centralized transportation industry also bottomed out in the middle of the year. At the end of May, the World Ports Association pointed out that the number of container ships calling at about 45% worldwide dropped by 5% to 25%, and most of the cancelled ships came from the Far East route.
According to data from Alphaliner, an international shipping consulting and analysis agency, the new crown pneumonia epidemic in the first half of the year has reduced the chartering revenue of large container ships by half. Starting in the third quarter, global shipping capacity has recovered, a year-on-year increase of 2.8%, reaching 123 million TEUs, strong exports from Asia Become an important driving force for recovery.
In terms of the capital market, the share prices of listed companies in the A-share centralized transportation industry have also started in June and have risen significantly in the third quarter. CIMC (14.830, 0.20, 1.37%) and COSCO SHIPPING Holdings (9.680, 0.06, 0.62%) The performance of related listed companies also increased substantially in the third quarter.
Strong demand for containers is expected to continue into the first quarter of next year
Returning to the shipping industry itself, many shipping companies around the world took the initiative to suspend shipping under the influence of the epidemic in the first half of this year.
As the world’s top five airlines, Rolf Habben Jansen, CEO of Hapag-Lloyd, pointed out at the third-quarter performance briefing that in April this year, demand suddenly dropped by 20% and lost 200 million U.S. dollars per month, so it must be suspended to reduce 60% of the cost. He pointed out: "The market at this stage is driven by demand, not by inventory replenishment. The entire market is trying to get empty containers back to where they are needed."
In terms of container freight rates, the Shanghai Export Container Freight Index (SCFI) and China Export Container Freight Index (CCFI) released by the Shanghai Shipping Exchange have set new highs. On November 27, CCFI quoted 1198.72 points, an increase of 4.6% over the previous week; SCFI quoted 2048.27 points, an increase of 109.95 points over the previous week. Under the strong demand, the price of offshore export containers also rose sharply. On November 27, the export container price of Southeast Asia routes was quoted at 995.67 points, an increase of nearly 20% over the previous week.
According to the analysis of China Securities Regulatory Commission, the supply side has not launched large-scale capacity at this stage, while the demand side has continued to grow rapidly, which will become the fundamental reason for the increase in freight rates in the transportation industry. Although the epidemic has led to pessimistic global economic expectations, in fact, the European and American manufacturing PMI index is still in the expansion range driven by policy, which provides economic fundamental support for the increase in freight rates.
However, someone from a shipping company pointed out to a reporter from the Securities Times that in the last 10 to 12 years, the shipping industry has not made any money or even recovered the cost of capital; long-term low-price competition is difficult to promote the healthy development of the industry.
So, can the epidemic promote the long-term recovery of the industry? Most people in the industry are cautious about this.
Rolf Habben Jansen pointed out that the current market is very, very strong, "but it is illogical to think that this situation will continue in the next few years." He expects that the situation will change in the next three or four quarters, and the company needs to be prepared to act quickly.
Container shipping companies and leasing companies also told reporters that the outlook is difficult to predict. Although the strong demand for containers is expected to continue into the first quarter of next year, after the middle of next year, there is still greater uncertainty in the market supply and demand trends. If European and American countries are still under lockdown or vaccine research and development and promotion fall short of expectations, and the macro economy falls into a sustained recession, the good growth momentum of the container transportation industry may not be able to maintain.
At present, the number of confirmed cases of new crown in the world has exceeded 60 million, and many countries have implemented stricter epidemic prevention measures. Experts reminded to be highly vigilant against the rebound of the winter epidemic. On the domestic front, economic and trade continued to recover steadily, and the vitality of the manufacturing market increased. In November, the manufacturing purchasing managers index continued to rebound from the previous month. In late November, the China Ports Association monitored that the cargo throughput of major coastal hub ports dropped slightly by 0.4% year-on-year, of which the foreign trade cargo throughput dropped by 3.4% year-on-year; the Yangtze River port production accelerated, and the hub port throughput increased by 24.7% year-on-year. Details are as follows:
1. The container business of the eight major hub ports rebounded steadily
On the one hand, the current domestic epidemic prevention and control has achieved practical results, and the manufacturing industry has effectively recovered under various policy incentives; on the other hand, the recovery of external demand has driven a significant increase in foreign trade export orders. Data from the National Bureau of Statistics show that the manufacturing new orders index and the import and export prosperity index both rebounded steadily in October. In late November, the China Ports Association monitored that the container throughput of the eight major hub ports increased by 3.7% year-on-year, and the growth rate was 5 percentage points lower than the previous period; of which, the container throughput of foreign trade increased by 3.8% year-on-year, and the domestic trade increased by 3.6% year-on-year. In terms of ports, the container throughput of Tianjin, Qingdao, Shanghai and Shenzhen ports increased by more than 10%. It is worth noting that the freight rate of the US route has continued to be high recently, and the market freight rate of the European ground route has also risen sharply year-on-year due to the significant increase in cargo sources. The shortage of space and cargo containers on ocean routes is more prominent.
2. Key monitoring port coal business continues to maintain a rebound trend
In late November, the temperature fell across the country, and the rapid recovery of power plant loads along the river and coastal areas led to a significant increase in daily coal consumption. The decline in available days of inventory boosted market procurement enthusiasm. The number of anchor ships in northern ports increased significantly, and the amount of coal launched continued to increase. In the current period, the coal throughput of Qinhuangdao Port and Shenhua Huanghua Port increased by 5.9% year-on-year, and increased by 2.9% from mid-year. Port inventory continued to decline. On November 30, the coal inventory of the two ports decreased by 18.5% year-on-year, which was a decrease of 1.4% from November 20.
3. Crude oil throughput of key monitoring ports dropped year-on-year
Recently, fuel prices have risen for four consecutive weeks under the stimulus of positive progress in the research and development of the new crown vaccine, a weak U.S. dollar, and tensions in the Middle East. Nevertheless, OPEC and allies still tend to postpone oil production increases plans to support the market during the second wave of the global epidemic. In this period, the China Ports Association focused on monitoring the crude oil throughput of coastal ports, which decreased by 3.5% year-on-year, but increased by 3.1% from the middle. Port stocks are sufficient. Crude oil stocks at the ports monitored on November 30 increased by 26.8% compared with the same period last year and increased by 3.2% from November 20.
4. Key monitoring port metal ore throughput growth has accelerated
Recently, the steel market demand has been generally stable, and steel stocks have continued to decline month-on-month. Weather factors in the northern region have a certain impact on the demand for building materials, and the boom in the manufacturing industry drives the demand for industrial steel. Steel mills are generally profitable and have high production enthusiasm. The price of iron ore repeatedly broke new historical highs. On the 30th, the contract price of iron ore 2101 reached 911.5 yuan/ton, an increase of 2.7% from the 20th. On November 24, the Ministry of Ecology and Environment and other four ministries jointly issued a document stating that my country will completely ban the import of scrap steel from 2021, which will also boost iron ore prices to a certain extent. In late November, the China Ports Association's key monitoring port metal ore throughput increased by 16.1% year-on-year, and the growth rate increased significantly. Among them, the growth rate of Tianjin Port and Rizhao Port both exceeded 15%, and the growth rate of Ningbo Zhoushan Port exceeded 30%. Downstream steel mills have strong demand, and port inventory has shown a downward trend. Statistics show that on November 30, the key monitoring port inventory decreased by 4.9% year-on-year.
5. Throughput growth of the Yangtze River hub port has accelerated overall
In late November, production at the ports of the Yangtze River accelerated in an all-round way, reflecting the positive economic recovery in the hinterland. Statistics show that the cargo throughput of the three ports of Nanjing, Wuhan, and Chongqing increased by 24.7% year-on-year, 12% faster than the previous period, and the throughput of foreign trade cargo also maintained a rapid growth. Among them, the growth rate of Nanjing Port was nearly 30%, and that of Wuhan Port and Chongqing Port was about 20%. The container business further accelerated, with a year-on-year growth of 26.9%, an acceleration of about 10 percentage points over the previous period; the growth rate of Wuhan Port exceeded 90%.
6. Overview of key monitoring port production in November
In November, the cargo throughput of coastal ports monitored by the China Ports Association increased by 4% year-on-year, with a cumulative increase of 1.1% from January to November.
The container business continued to maintain a good recovery trend. In November, the container throughput of the eight major hub ports increased by 8.7% year-on-year, and the growth rate was 2.4 percentage points lower than that in October. Among them, foreign trade increased by 8.4%, a drop of 3.5 percentage points from October, and domestic trade increased by 9.4% year-on-year, slightly faster than October. In terms of ports, the growth rate of container throughput in Tianjin, Qingdao, Shanghai, Ningbo Zhoushan and Shenzhen ports all exceeded 10%. The cumulative container throughput of the eight major hub ports from January to November returned to the level of the same period last year.
The coal market has entered a peak demand season, and throughput growth has accelerated. The coal throughput of Qinhuangdao Port and Shenhua Huanghua Port in November increased by 7.2% year-on-year, and the growth rate was about 1 percentage point higher than that in October. The cumulative decline from January to November was 4.4% year-on-year, and the rate of decline narrowed.
Crude oil imports slowed further. The throughput of key monitoring ports in November fell by 4.2% year-on-year, which was the first year-on-year decline since April. The cumulative increase from January to November was 8.9% year-on-year.
The growth rate of ore throughput dropped. The ore throughput of key monitoring ports in November increased by 1.6% year-on-year, a decrease of 2 percentage points from October. The cumulative increase from January to November was 7.6% year-on-year.
Production at the Yangtze River Port has been accelerated. In November, the cargo throughput and container throughput of the Yangtze River hub port increased by 18.7% and 18.8% year-on-year respectively, setting the highest growth rate for the year. From January to November, cargo throughput and container throughput dropped by 3.4% and 4.9% year-on-year, and the rate of decline narrowed.
