Although the new round of new crown pneumonia in Europe represented by the British mutant virus has generally eased, and the congestion of British ports is also showing signs of easing, it will take some time for the European transportation system to fully recover.
At the same time, the goods hoarded before the Chinese New Year have basically been shipped out, and the demand for transportation after the holiday is still recovering. The overall market volume is insufficient, and some voyages have surplus space. Liner companies cut prices to buy goods.
Under the combined influence of the above-mentioned market factors, the freight rates of Asia-Europe routes after the Spring Festival have been declining.
According to the Shanghai Export Container Freight Index (SCFI) released by the Shanghai Aviation Exchange, on March 12, the freight rate (sea and ocean surcharges) for exports from Shanghai to the European basic port market was 3,712 US dollars/TEU, which was higher than that on March 5. Compared with 3966 USD/TEU, it is down 6.4%. Compared with the USD 4,047/TEU on February 26, it was down by 8.3%. Compared with the 4281 USD/TEU on February 19, the drop reached 13.3%.
This is also the rate of the Asia-Europe route, which has declined for three consecutive weeks.
The situation of the Mediterranean route is slightly better than that of the European route. On March 12, the freight rate (sea freight and ocean freight surcharges) for exports from Shanghai to the Mediterranean basic port market was 4,020 USD/TEU, a decrease of 5.4% compared with 4,252 USD/TEU on February 19.
The Ningbo Export Container Freight Index (NCFI) released by the Ningbo Shipping Exchange also showed a similar trend.
From March 5th to 12th, the NCFI European route freight index was 2871.1 points, a decrease of 6.2% from the previous week. Compared with the 3192.2 points on February 20-26, a drop of 10%; compared with the 3323.4 points on February 13-19, a drop of 13.6%.
The trend of NCFI European route freight index
In the same period, the freight index of the NCFI East-West route was 2354.2 points, and the freight index of the NCFI West-South route was 3007.1 points, a decrease of 7.4% and 9.2% respectively from February 13-19.
Entering 2021, the freight rate of Asia-Europe route has experienced an astonishing price increase of 25.8% overnight, and then gradually dropped.
Previously, industry consulting agency Sea-Intelligence had predicted that in 2021, the uncertainty caused by the epidemic would still be very large, and the historically high freight rates would fall.
Lin Shulai, an analyst at Yihailan, analyzed that the market freight rate after the Spring Festival depends on two factors, the operating strategy of the shipping company and the development of the epidemic. It is expected that after the first quarter of 2021, the market is expected to return to normal.
German logistics giant Rhenus continues to start crazy "acquisitions"! Following the acquisition of the LOXX Group last month, Rhenus, the harvester in the international freight forwarding market, has taken another move, bringing BLG Logistics Group, a well-known local freight forwarding company in Germany, under its umbrella.
Rhenus Group is a leading logistics service provider in Germany, with operations all over the world, with an annual turnover of 5.5 billion euros. Rhenus has operations in 750 regions around the world and has 33,000 employees. The Rhenus Group provides solutions for different areas in the entire supply chain; including multimodal transportation, warehousing, customs clearance and innovative value-added services.
BLG hopes to focus on its contract, automobile and container businesses, and sell BLG International Forwarding's international freight business to Rhenus. Since 2018, Rhenus has acquired almost all regions of the world; Rhenus will provide its service network for the rest of BLG's business .
Rhenus will take over BLG’s 9 air and sea freight stations in April and integrate these stations with approximately 100 employees into its network of 12 branches in Germany. This new business will enable the company to handle more traffic through its LCL hub in Hilden and the air cargo hub in Frankfurt.
Rhenus said the company also plans to expand its food business, trade fairs and event logistics operations. "In the past few years, we have paved the way for the continuous expansion of air and ocean freight," said Stefan Schwind, general manager of air and ocean freight at Rhenus Germany.
"Due to the addition of business sites, employees and business activities, we are consolidating our network in the German aviation and maritime sectors. We also hope to develop new business areas, such as the use of refrigerated containers to transport food, and in trade fairs and event logistics. Activities."
BLG said it will retain its freight forwarding business in Bremen, focusing on land and sea transportation of heavy and project cargo. Board member Jens Wollesen said: "Even if we no longer have representatives throughout Germany in freight forwarding, we will continue to provide a wide range of international services in our contract, automotive and container sectors."
Last month, Rhenus stated that it would take over the LTL and FTL cross-border specialist LOXX Group and established five business sites in Germany and Poland to strengthen its business in Germany and Europe.
In the past two years, Rhenus has made frantic acquisitions. From Germany, Italy, the United Kingdom to Canada to South Africa and the United States, all freight forwarding companies that Rhenus favors have been acquired.
Recent "acquisition list":
In November 2018, it acquired German freight forwarding SBL;
Acquired the Italian logistics company Cesped in December 2018;
Acquired British freight forwarding Core Management logistics in January 2019;
Acquired Rodair, a Canadian freight forwarder, in early March 2019;
Acquired World Net Logistics, a well-known freight forwarder in South Africa at the end of March 2019;
Acquired LOXX Group in January 2021;
Acquired BLG Logistics Group's freight forwarding in January 2021.
Customs regulations are a necessary, but challenging part of international shipping. Clearing customs increases costs, paperwork, and time-delays. Customs-bonded warehouses help reduce this friction and are an integral part of the global supply chain.
What is a bonded warehouse?
A customs bonded warehouse is a secured building or area where merchandise can be imported and stored for a period of time, without any import taxes (duties) being charged. Duties are only paid when the goods are removed for domestic use.
No duties are charged If the merchandise is re-exported, destroyed by customs, or withdrawn for use on an international vehicle or aircraft. The United States permits eleven types of bonded warehouses, where imported goods can be kept for up to five years.
While in bonded storage, merchandise can be handled and manipulated as long as the processing doesn’t change its essential nature. All types of products can be kept in bonded storage, including animals and restricted materials.
Customs bonded storage is a smart option for long-term financial planning and resource control. Using bonded warehouses to defer taxes on imported items can improve cashflow management, reduce financial liabilities, lower expenditures, and protect against political risk.
Long Term Bonded Storage
Bonded warehouses can be used to manage the financial burden of import taxes. If imported dutiable merchandise will not be sold immediately, inventory can be kept in bonded storage to avoid a large upfront tax payment.
Importers can then retain control over those monies and have them available for other purposes. Since applicable duties are only paid when the goods are removed after being sold, cash-strapped importers can fund their duty payments from the sale of the goods.
Customs bonded warehouses can also be used to hold merchandise that has low or fluctuating demand. If demand increases the merchandise can then be withdrawn for domestic use. If it doesn’t, the products can be re-exported without duty charges.
Right now, the global supply chain is in disarray due to Covid-19. Shutdowns and demand disruptions created supply chain bottlenecks and inventory build-ups. Luxury items like perfume are experiencing much lower demand. Bonded storage is being used to store excess product and let enterprises avoid paying customs on those items.
Restricted Specialty Item Risk Management
Bonded storage can be a preferable choice for storing restricted goods. Since customs bonded warehouses can store imports for up to five years, shorter time regulations for the storage of restricted products do not apply to them.
Importers who need extended time for processing paperwork or legalities to clear customs can use bonded storage to bypass these regulations.
Political and Economic Risk Management
Bonded storage can be used to protect against political instability and policy fluctuations. If merchandise is imported during times of high tariffs, bonded storage gives the chance to wait for more favorable economic conditions. Customs bonded warehousing has proved a highly effective strategy in navigating the tariffs of the Trump administration.
Exporters, importers, and manufacturers sought approval to establish their own bonded warehouses and storage areas. While the nation experienced rapidly changing foreign policy, these facilities became stable domestic zones for production and trade. Manufacturers and retailers were able to continue engaging in commerce while mitigating potential fallout.
Handling and Prepping for Market
If merchandise needs to be immediately prepped for market, this can be done in special customs bonded warehouses. Taxes are then determined on the final product when it is withdrawn from storage. This can prevent extra duties from being charged on material that does not make it to market.
For example, if food is brought in which needs to be sorted or processed, importers can avoid paying tax on discarded product.
Logistical Streamlining
Goods are also imported into customs bonded warehouses, simply to help smooth out the logistical process of clearing customs. Having goods placed in secure, duty-free storage gives peace of mind and more time for paperwork to be done.
How does bonded storage work?
Customs bonded warehouses can be owned either directly by the government or by licensed private enterprises. Some privately run bonded warehouses are for the proprietor’s use only, while others are available for public use.
Merchandise kept in privately operated warehouses, is under the joint supervision and joint custody of Customs Border Patrol and the warehouse proprietor. Customs retains full authority over the goods in the warehouse, but generally maintains control through periodic audits.
Private operators will take out a warehouse bond under which they incur liability for stored merchandise. This liability is discharged when the goods are exported, destroyed by Customs, or withdrawn domestically after duties are paid.
Customs-bonded warehouses are generally located at or near ports. Shipments are received directly to them. Many privately owned, public use warehouses will offer complementing services such as freight forwarding, logistics, distribution, and deliveries.
Certain classes cater to niche needs, such as livestock management, food handling, or receiving regulated products.
Once goods are withdrawn, importers will need to pay merchandise-processing fees in addition to duties. These fees should be negotiated carefully by evaluating different freight-forwarding services to find the best deal.
Supply Chain Resilience
Customs bonded warehouses are a key asset for global economic stability and security. Businesses rely on customs bonded storage as a core resource for financial control and risk management. Beyond cash flow management, this also creates economic confidence for trade to continue in uncertain conditions.
The recent China-USA tariff wars and Covid-19 supply chain chaos have proven their continued relevance as a stabilizing measure for international trade. Bonded storage is well integrated into freight shipping logistics. Enterprises looking to streamline and optimize the process of ocean freight shipping should take advantage of these secure, managed facilities.
Customs bonded warehouses are proven ways of mitigating the costs of heavy tariffs and regulations.
After the freight rate in the trans-Pacific market has remained stable for a period of time, it has recently started a rising mode.
According to the Freightos Baltic Daily Index (Freightos Baltic Daily Index), on December 28, 2020, the freight rate of the Asia-US West Coast route reached US$4,189/FEU, a record high, an increase of 8% from December 25, which is the year of 2019. 3 times over the same period.
At the same time, the freight rate of the Asia-US East Coast route also reached an astonishing US$5397/FEU, a 9% increase from December 25 and twice the rate of the same period in 2019.
According to data from the Shanghai Shipping Exchange, on December 25, 2020, the freight rates (sea freight and ocean freight surcharges) for exports from Shanghai to the basic port markets of the West and the East of the United States were 4,080 USD/FEU and 4,876 USD/FEU, respectively. The US West route rose 4.6% from the previous week.
Analysts of the Shanghai Shipping Exchange said that the average space utilization rate of ships on the Shanghai Port to the West and East U.S. routes maintained at a level close to full load. However, the U.S. epidemic has blocked the turnover of containers, and a large number of containers are stranded at the local terminal. The congestion of the port is increasing, and the shortage of containers has not been alleviated.
In addition, a number of shipping companies including CMA CGM, Hapag-Lloyd, Evergreen Shipping, HMM, ONE, Yangming Shipping, and Star Shipping have announced that they will start on the trans-Pacific route from January 1, 2021. , Charge a comprehensive rate increase surcharge (GRI) ranging from US$1,000 to US$1,200/FEU.
The market predicts that the upward trend of freight rates will continue until January 2021.
In contrast to the fast-growing transportation demand, after a fully loaded ship arrived at the US West Port, it faced the dilemma of nowhere to stop.
According to a report released by the Marine Exchange of Southern California on December 28, 2020, a total of 24 container ships are anchored in San Pedro Bay, and another 5 ships are about to arrive.
According to the report, the local conventional anchorages are full of ships, and some emergency anchorages have also been occupied.
Marine Traffic uses an automatic identification system to draw a map that shows the extent of the accumulation of container ships in San Pedro Bay, which has deteriorated in recent weeks.
According to statistics, 26 additional ships called at the Port of Los Angeles in November and 31 ships in December. A port manager said that it is expected that in January 2021, more additional ships will call.
The loading and unloading capacity of the Port of Los Angeles and Long Beach has already faced serious shortages. The Port of Los Angeles will import 116,500 TEU containers this week, and it is expected to increase significantly to 150,000 TEU per week by January 2021.
The continuous increase in freight rates and the severe congestion at the US West Port have caused shippers’ costs to hit unprecedented highs, and shippers have to reassess their transportation cost budgets for 2021.
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."
"Shanghai SIPG, Ningbo, and Shenzhen are all major ports in the world. In 2018 and 2019, the container throughput of Shanghai Port was ranked first. Recently, the container shipping market is very hot, and many boxes cannot be returned after they go out." People from listed companies commented on the reporter of "Securities Daily".
In this regard, Liu Wang, chairman of Shanghai Tianhui International Logistics Co., Ltd., told reporters: “The price of container transportation has been rising. Because shipping companies have fewer ships, they often suspend voyages, and the lack of boxes is common, even if the price increases. It cannot fundamentally solve the problem of missing boxes."
• One price a day, "boxes" are crazy
"The most exaggerated time in the past 10 years." Speaking of the current shipping industry, Ms. Xie, who is engaged in the foreign trade industry, told a reporter from the Securities Daily. Ms. Xie is mainly responsible for the freight of Guangzhou Nansha Port and Shenzhen Port. She told reporters that taking a 40-foot container as an example, the highest sea freight to the Middle East at this time last year was about US$3,000. It costs almost US$5,000 now. Last year, it was US$2,800 to US$3,200 to Europe, and now it is US$6,000 to US$7,000. This year, the freight is almost twice the same period last year.
By the end of the year, the lack of positions became a true portrayal of the operation industry.
“Nowadays, there is a shortage of containers and high freight rates. The supply exceeds demand. During the epidemic, there was a large backlog of foreign containers that could not be arranged for delivery, and no one carried the goods. Almost all customers were looting containers. Under current market conditions, there are few freight forwarders. When looking for new customers, they are basically priority old customers.” Ms. Xie told reporters that the new year is approaching, and major suppliers are fully shipping. It is expected that the shortage of containers will continue.
"First of all you have to have a position, then you have to line up the truck to get the container, and finally you have to wait for the port to open before you can enter the port. Every day, you have to go through five hurdles, and you have to face customer soul torture. It's late, can't you figure it out?" A shipping forwarder complained about the tightness of the current export containers.
Liu Wang revealed to the "Securities Daily" reporter: "Many forwarders who have no boxes sometimes look for scalpers. Now forwarders are looting positions. The positions have to be booked in advance. Many people robbed and reselled them. In the past, they did not lose their shipping fees. Now that the shipping companies are recovering their losses, the shipping companies are about to usher in a wave of market conditions this year. After the merger and reorganization last year, it is estimated that all the money lost in the past will be made back this year."
Liu Wang said: “In the past Christmas and the Spring Festival, there will be a wave of liquidation market, this year is particularly fierce because of the epidemic. South American container boxes were the lowest in history at 50 US dollars a small container, and now basically it costs more than 5,000 US dollars, and a large box 10,000. U.S. dollars, if $5,000 this week is too expensive for you, you may not be able to order $6,000 next week, basically one price a week."
In fact, the current container price has been upgraded to a daily basis. A person in charge of an international logistics company said: “In Qingdao Port, the price of a second-hand 40-foot container in previous years was about US$2,000. On November 27 this year, the price rose to US$2,850; by November 30, the price of a second-hand container rose to US$3,200. ; On December 3, it rose to 3,400 US dollars again, almost one day."
According to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe for three months or less is 200% higher than a year ago, at $4,831 per 40 feet. But from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%.
The relevant person in charge of COSCO SHIPPING Holdings told reporters: “As the volume of goods continues to rise, the demand for export containers has greatly increased, and the domestic guarantee for container use has become tighter. However, the turnover of overseas empty containers has generally slowed due to the continuous impact of the epidemic situation in various places. Transfer back to China to meet demand."
"The whole industry is looking for boxes everywhere, and some merchants are beginning to hoard boxes to speculate on prices." In the eyes of industry insiders, the current situation of foreign trade companies being difficult to find a box is not only because of the slow operation of containers, but also because of the reduction of some routes. .
"There are few ship lines, and most of the cabinets shipped abroad can't return. This is the root cause of the skyrocketing price of the domestic container transportation market." Liu Wang explained to the reporter: "It's not that foreign cabinets are not coming back. It is the epidemic situation abroad. The impact is that the workers do not go to work and the speed of transportation is relatively slow. Now everyone is sharing the warehouse."
According to Liu Wang, the container ships now and the alliance has been formed since last year. Originally, it used its own ships to transport the goods. Now four or five shipowners or five or six companies form an alliance, and use the same ship. warehouse. "It turns out that there may be several shipping companies arranging several shifts to go to sea in a week. Once we formed an alliance, the shifts decreased in a week. This started last year. Now shipping companies often stop once a week, which objectively leads to a shortage of ships. ."
A person in charge of the Shanghai Maritime Logistics Company introduced to a reporter from the Securities Daily: "At present, the proportion of import and export trade by sea is imbalanced. There are few boxes coming in and many boxes going out . In addition, China has quickly prevented and controlled the epidemic, and overseas orders have continued to surge. , Increasing the pressure on shipping. Overseas, affected by the epidemic, the operation cycle of containers shipped out due to business environment problems has been lengthened, the arrival process has increased, and the operation efficiency has slowed and lengthened the circulation cycle. Due to the early outbreak of the epidemic, major shipping The company has reduced many routes, resulting in uneven distribution of global container volumes."
The industry believes that with the increase in market demand, the current effective capacity is obviously insufficient.
The relevant person in charge of COSCO Shipping Holdings revealed to the reporter: "As the global epidemic prevention and control has become normalized, global trade has been rapidly repaired since the third quarter of this year, and the demand in the container shipping market has recovered beyond expectations. In order to meet the growth of transportation demand, market capacity has gradually returned to normal. , The idle capacity has dropped rapidly from the record high of more than 2.7 million TEU (international standard unit units) in May this year. At present , there is no airworthy effective capacity to rent in the market. "
In the context of uneven global container deployment, container prices on different routes have also risen at different rates.
"Since November, the price of the U.S. line has increased by about four times compared with the beginning of the year, and the European line has risen to the highest price last year. From the perspective of the distribution of China’s export routes, the U.S. container accounts for 25%, Europe accounts for 25%, and Southeast Asia , Northeast Asia adds up to 50%, the US route is now hard to find a box is the norm, followed by the European route, freight is also very tight. The price of Malaysia route in Southeast Asia has also doubled recently." The person in charge of the aforementioned logistics company added.
Facing the increase in demand for containers, the above-mentioned relevant person in charge of COSCO SHIPPING Holdings stated: “The company will strengthen scientific forecasts for container use, actively coordinate dual-brand superior resources, and make every effort to guarantee the use of containers during peak seasons. On the one hand, internally tap the potential and accelerate overseas heavy container Demolition speed, increase empty container callback domestic and Far East efforts to promote container turnover; on the other hand, close communication with container manufacturers and container leasing companies to seek more container sources. Through two-pronged and multiple measures, to guarantee domestic container use Provide effective assistance and try our best to meet the shipping needs of customers."
In order to meet the development needs of the container market, SIPG has launched a number of effective measures to promote container volume growth in response to the market. At the beginning of this year, the Group launched seven special measures for container growth, through the implementation of preferential international transit loading and unloading fees, extension of the international transit container storage exemption period, and sea-rail intermodal customs clearance container preferential projects. In the first half of the year, the Group established three major container areas: Yangshan, Outer Harbor, and Domestic Trade, striving to achieve overall planning and agglomeration effects.
According to SIPG’s official announcement, in October, each terminal of Shanghai Port set a new record. The monthly throughput of Shengdong Company exceeded 820,000 TEUs for the first time. Among them, 33068 TEUs and 12899.75 TEUs were updated on October 25. Class record; Guandong Company broke through 720,000 TEU, setting a new record again.
• How long can the "shortage of containers" last? What is the future prospect of the shipping industry?
"The first half of the year was affected by the new crown epidemic. Ports and shipping fields did suffer a relatively large negative impact, so the first half of the year was basically a negative growth state. In the second half of the year, especially after the third quarter, normal operations resumed to a certain extent, plus China The epidemic has been controlled to a certain extent, and most of the economic activities have been resumed first. Therefore, compared with the first half of the year, there is indeed a big sign of a bottoming out." said Liu Dian, a research assistant at the Chongyang Institute of Finance of Renmin University of China.
In the first two months of this year, my country's foreign trade imports and exports dropped significantly. According to China Customs data, from January to February 2020, my country's total import and export value of goods trade was 4.12 trillion yuan, a year-on-year decrease of 9.6%. Among them, exports were 2.04 trillion yuan, down 15.9%; imports were 2.08 trillion yuan, down 2.4%.
Although the current domestic epidemic situation is under control, the global epidemic is breaking out, and exports are still under certain impact.
It can be said that in the first half of this year, people in the shipping industry were mainly pessimistic about my country's export prospects. In the second half of the year, the industry was generally optimistic about the future development of the shipping industry.
Insiders analyzed to the "Securities Daily" reporter that this round of container freight price increases began in the middle of this year. At that time, after the domestic epidemic was brought under control, foreign countries were greatly affected by the epidemic, and many overseas orders were transferred to the domestic market. When shipping from China, the shipping price began to rise. According to Liu Wang's prediction, this round of price increases will continue until the first quarter of next year.
An unnamed person in charge of maritime logistics said: "As the epidemic stabilizes, this hot market will continue into the first half of next year, or even longer."
"This wave of increase in container shipping prices has driven the adjustment of the entire foreign trade sector, breaking the laws of the past decades in the industry. Not only ocean freight, air freight and land transportation have different levels of influence and changes. The epidemic has accelerated the entire large trade sector. The consolidation and adjustment of the shipping sector will gradually move towards intensive development. Shipping companies have become monopolistic after years of integration and mergers. The aviation sector and the land transport sector are also rapidly integrated, and a new chapter will emerge in the future foreign trade field." People say so.
According to Huang Tianhua, chairman of the China Container Industry Association and vice president of CIMC, predicted that the shortage of containers may continue for about six months . He said: "We have monitored that if there are 500,000 new containers in China normally, they are in a completely healthy state if they are ready for use in the docks or ports, but the current tighter inventory is about 300,000 new containers. I expect it to be possible. In the next three months to six months, this slightly tense balance will continue. This is probably a trend in the current industry."
Although the industry is generally optimistic about the shipping industry, Liu Dian believes that the total global trade volume in 2020 will still drop a certain percentage from the previous year, but from the perspective of the shipping industry, it will definitely be from the third quarter to the fourth quarter. There will be a better market.
Liu Dian said: “Affected by the epidemic in the first half of the year, the uncertainties slowed down in the second half of the year, and the overall trend showed a relatively large rebound. Therefore, from a macro perspective, global international trade has rebounded to a certain extent. China is the first to resume the rebound led by the next."
" At present, the shipping industry is mainly affected by three factors :
Di Yi factor is that the global economy is expected to have a recovery, so after the third quarter, international trade has been warmer, led the field of shipping industry as a whole for the better, whether it is from container or just have some trade from the sea to pick up case .
The second factor is that with the signing of the RCEP agreement, a series of regional economic integration cooperation relations in East Asia and Southeast Asia will improve, which will benefit the import and export trade of China and related countries.
The third factor is that although the epidemic has not been eliminated on a global scale, all countries are in short supply, such as medical supplies, production supplies, and living supplies. China is now the world's largest trade surplus country. Under such circumstances, China's export trade, including part of its import trade, will also get a relatively large rebound in demand, and at the same time promote the rise of a series of shipping-related industry indexes in related fields, including the container shipping index. "Liu Dian said.
Ocean freight has been very developed in the 21st century. How to choose the container used in freight transportation ? The following editor will analyze it.
The emergence of containers is for the safety of the container and the ship, but before packing, it is necessary to know the volume, nature, type, and shape of the goods to choose a suitable container. Of course, some goods cannot be transported, and also The cargo will be damaged due to the wrong container.
As for how to choose the right container for the goods, let's talk about them one by one below.
How to choose the container used in sea freight ?
You can choose sundries containers for valuables and cleaning items; ventilated containers for perishables and dirty goods; refrigerated containers for refrigerated and dangerous goods; livestock (animal) containers for animals and plants; platform containers for bulky items, and bulk The cargo can choose bulk containers.
When we are shipping, it is very important to know how to choose the shipping container, and it is also to ensure the safe arrival of the goods to the destination.
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.
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."
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.
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.
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.
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.
A China-Europe Express platform company said that since the beginning of this year, the shipment volume of China-Europe Express Express has continued to increase, but the limited port operation capacity, coupled with the impact of border epidemic prevention and control and other factors, has caused a large amount of cargo to be backlogged at the port. "From the second half of this year, At the beginning, some ports experienced serious congestion. With the increase in freight demand at the end of the year, congestion has become more serious recently."
Against the background of "extreme" demand and lack of equipment, the price of freight transport by China-Europe railway has jumped fivefold . In addition, the backlog of containers on the border between China and Kazakhstan (Alashankou and Khorgos) prompted the temporary suspension of some westbound services.
GEODIS, a leading French logistics company, told its customers: “The space on the westbound is very tight. According to the availability of venues and equipment, delivery is accepted according to the company’s reservations. “Since the westbound service has a very large demand for space, we require Check all possible bookings one by one. "
With air and sea transportation restricted, railway traffic is approaching full capacity, and the delays on the China-Kazakhstan border have exacerbated traffic congestion. According to Rob Foster, business development manager for Norman Global Logistics Central and North China, the main problem is traffic congestion, not service suspension. He said that "the border has a large backlog of goods, and the railway transportation company cannot handle the volume of trucks." "In the first week of December, the westbound price per 40-foot high container ranged from US$6,000 to US$10,000, four or five times that of the same period last year. Shipping companies would not even guarantee to provide space at such a price. " "Serious shortage of equipment . " It is also a key issue , especially outside of China.
"By manipulating the ocean freight market, shipping companies have caused this problem to a large extent, affecting all services. For several months, airlines have been operating small ships, coupled with suspension of services, slowly forming pressure. Rail transport companies There are some containers, but there are still many containers that are leased."
He pointed out that in recent years, there has been an "explosive growth" in train services, which has increased from a few times a week to a few hundred times a month, putting considerable pressure on the railway network. In fact, taking Alashankou as an example, the latest data shows that this year's railway transmission volume has increased by 42% to 4,500 times, and the entire China-Europe railway network has sent more than 10,000 times.
In response to the current serious backlog of ports, the National Railway Group issued dispatch orders this month:
Dispatch order:
• Issued on November 22: From 22 to 25, shipments of outbound goods via Alashankou and Horgos except for the China-Europe Express will be suspended.
• Issued on December 8th: From 8th to 13th, all kinds of goods exported to Erlian and Alashankou will be suspended. If there are key materials, they must be reported to the National Railway Group.
• Issued on December 13th: From 13th to 16th, cargoes exported to Manzhouli, Erlian and Alashankou will be suspended (except for the scheduled train).
• Re-delivery on December 16th: From 18:00 on the 16th to 18:00 on the 19th, all kinds of goods exported to Manzhouli and Alashankou except for the scheduled China-Europe Express train will stop loading.
On December 12, the National Railway Group responded to the recent congestion of the China-Europe Express, saying that the port handover capacity has indeed declined recently, and some corridors have moved slowly. The National Railway Group said this is due to the approach of Christmas in the West. The demand is strong, and the epidemic prevention and control measures at port stations have been strengthened, as a result of factors such as bad weather overseas. The railway department has taken measures to carry out source regulation and deconstruction, and adopt phased capacity regulation measures; at the same time, implement capacity expansion and transformation at Khorgos, Erlianhot and other ports to improve handover capabilities; strengthen international coordination and cooperation. China National Railway Group stated that the above measures have effectively relieved port congestion. China National Railway Group requires that China-Europe Express trains will not be suspended or installed during this period.
The above-mentioned China-Europe Express platform company said that a train from China to Europe needs to be changed twice in the middle. The first time was when China exited the CIS countries or Mongolia, the standard gauge (1435) Cm) car plate, replaced by a wide gauge (1520 cm) car plate, the second change is to go from Russia westbound to Europe, and then change from the wide gauge car plate to the standard gauge car plate, the smooth operation of the train needs Close cooperation with countries along the way.
"Because the trains on the outbound journey are blocked at the port, and there are no trains on the return journey to pick up the containers, once congestion occurs, it will be two-way." The above-mentioned person said.
A freight forwarder engaged in the China-Europe freight train business in Central Asia also told a reporter from China Business News that the limited number of railway infrastructure and loading and unloading equipment in some Central Asian countries and the low level of dispatching are one of the important reasons for congestion. For example, the number of wide-gauge car plates in Kazakhstan is much lower than that of Chinese ports. After the car plates are dispatched to Europe, Kazakhstan's own ports face the problem of insufficient car plates.
Regarding the reasons for the increasing demand for China-Europe Express, an international logistics company said that under the impact of the epidemic, air freight prices have skyrocketed, and shipping companies have reduced the number of ocean freighters and the number of ports of call. The convenience and effectiveness are greatly reduced. Rail freight has become the choice of more and more customers. "Air transport capacity is limited, and freight is high. Maritime transport involves crew quarantine, cargo handling and other links, frequent personnel contacts, which were greatly affected during the epidemic. Many goods originally transported by air and sea were transferred to rail transportation, which led to the beginning of February this year. , The volume of China-Europe express trains continues to grow."
The data released by China Railway Group also showed that as of November 5, the number of China-Europe freight trains in 2020 has reached 10,180, which has exceeded the number of trains in the whole year of last year, transporting 927,000 TEUs of goods, an increase of 54% year-on-year. In November this year, the China-Europe freight train continued to operate at a high level, with 1,238 trains operating 115,000 TEUs, an increase of 64% and 73% year-on-year respectively, and the comprehensive heavy container rate reached 98.8%.
In response to the current serious shortage of containers in the Asian market, Hapag-Lloyd CEO Habben Jansen recently stated that “the congestion of the port and the strong demand in the market have caused the increase in traffic to exacerbate this problem. This kind of tension will continue for another 6-8 weeks. It will be alleviated.” The pressure on the supply chain caused by the shortage of containers in Asia will continue for at least another 6-8 weeks, which means that shortages will still be faced in the next two months, which will also affect shipments before the Spring Festival.
Container freight rates continue to soar, reaching high levels far above the long-term sustainable level. The Shanghai Container Freight Index (SCFI) set a record of 2131.71 points, an increase of 162% over the same period last year. After experiencing a sharp increase in freight rates that initially lags behind the Pan-Pacific region, spot freight rates in northern Europe have soared up 230% compared to the same period last year. Moreover, the freight quotation in Asia and Northern Europe has reached US$10,000 per 40-foot high cabinet.
According to the shipping index released by the Shanghai Shipping Exchange in the latest issue, the overall export container shipping market in China remains high. The freight rates of most ocean routes operated steadily, and some increased significantly, and the composite index rose. On December 11, Shanghai's comprehensive export container freight index was 2311.71 points, an increase of 8.6% over the previous period.
Asia to Europe (Far East Europe Mediterranean route) : Near the end of the year, the volume of the European market remains high. The recurrence of the epidemic has also stimulated the growth of local import demand and strong transportation demand. The lack of containers in the market also affects European routes. Strong market demand and severe equipment shortages are expected to continue after the Spring Festival in 2021.
Last week, the average occupancy utilization rate of ships in Shanghai Port remained at the full level. Affected by this, most airlines increased their freight rates sharply in the middle of the month, and the spot market booking prices rose sharply. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the European basic port market was US$2,948/TEU, an increase of 24.2% from the previous period. In the Mediterranean route , the market situation is basically the same as that in Europe, and the spot market freight rate has risen sharply. On December 11, the freight rate (sea freight and ocean freight surcharges) for exports from Shanghai to the Mediterranean basic port market was 3073 US dollars/TEU, breaking the 3000 US dollars mark, an increase of 28.9% from the previous period.
However, there is news that the actual freight paid by the shipper is much higher in order to ensure the container and the final remaining European space . Lars Jensen of SeaIntelligence said that there is anecdotal evidence that the exact freight paid by shippers on the Asia-Northern Europe trade route may be as high as US$5,000 per TEU. Jensen explained: “In this case, it’s important to note that in some cases, SCFI underestimates the actual freight paid because there are additional costs related to equipment and space availability.”
A British freight forwarding company confirmed to The Loadstar that the freight quotation in Asia and Northern Europe has reached US$10,000 per 40-foot high container . "It's crazy," he said.
At the same time, all carriers will raise GRI again on December 15 . The current extreme shortage of 40-foot high cabinets suggests that alternative alternatives will continue to increase in freight rates this week; it is worth noting that due to port congestion and limited land capacity, cargo to the UK is subject to many restrictions, and delays and operational problems are expected. Some carriers stopped accepting bookings sent to the UK.
Due to the strong demand for containers and the backlog in recent weeks. CMA CMA CGM notified that it will temporarily stop accepting bookings from Asia to Europe, that is, temporarily suspend bookings for the 49th, 50th and 51st week Asia-Northern Europe routes. Another shipping company recently told Asia-Northern Europe customers that if the shipment is cancelled within two weeks after the shipment date, it hopes to charge a fee of US$1,000 per TEU.
Asia to North America (trans-Pacific eastbound route): The US epidemic is showing a trend of major outbreaks, with new cases hitting new highs in a single day. Severe epidemics have caused frequent port congestion and blocked transit. The problem of equipment imbalance in Asia continues, and supply and demand are severely unbalanced. Ningbo Port, ports in Southeast Asia and Busan Port are the loading ports with the most serious equipment shortages. The carrier's cargo backlog has become more serious, and it is increasingly difficult to book containers.
Last week, the average space utilization rate of ships on the Shanghai Port to West and East US routes remained close to the full load level. The freight rate is high and stable, and the spot market booking price is basically the same as the previous period. SCFI data shows that the spot freight rate from Shanghai to the east coast of the United States increased by 104 U.S. dollars to 4804 U.S. dollars per FEU, an increase of 91% over the same period last year, while the freight rate to the U.S. West Coast was basically the same at 3,984 U.S. dollars/FEU. Nevertheless, it has increased by 188% compared to the same period last year.
There does not appear to be any sign of slowing down in freight volumes to the West Coast of the United States. The Port of Los Angeles expects that containers will increase by 48% and 44% in the next two weeks. The Los Angeles and Long Beach terminals are under tremendous pressure due to the sharp increase in throughput. According to forecasts, the total volume of the Port of Los Angeles in the fourth quarter will increase by 40% year-on-year, exceeding 850,000 TEUs. Ships are waiting at the anchorage in San Pedro Bay for a long time. 6 days.
Jon Monroe of Jon Monroe Consulting, Washington State, said: "Consumer recovery is gaining momentum. Black Friday sales have grown strongly, up 21% from last year. If you have not ordered the goods shipped before the Lunar New Year, you may be too late. Up."
South American routes: The raging epidemic has affected the production capacity of South American countries, their dependence on foreign materials is high, and transportation demand has remained high. In this period, most of the average space utilization of ships in Shanghai Port is at the full load level. Near the middle of the month, most airlines increased their booking prices, and the spot market freight rates rose. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the South American basic port market was 5876 US dollars/TEU, an increase of 12.5% from the previous period.
In other routes, SCFI's spot freight rates have risen almost across the board. For example, the freight rates from Asia to South Africa rose 15% this period to US$2,289 per TEU, an increase of 130% over the same period last year.
Near the end of the year, the peak freight season continued to be hot, and the market freight rates continued to rise.
Especially in the European market, the demand for cargo volume remains high. At the same time, the recurrence of the new crown pneumonia epidemic has also stimulated the growth of local import demand.
At present, the average space utilization rate of ships exported from Shanghai Port to Europe has basically remained at the full space level, driving the market booking price to rise sharply.
The latest Shanghai comprehensive export container freight index
According to the Shanghai Composite Container Freight Index (SCFI), on December 11, the freight rate (sea freight and ocean freight surcharges) from Shanghai to the European basic port market was US$2,948/TEU, a 24.2% increase from a week ago. Compared with the US$1,508/TEU a month ago, it has nearly doubled.
The freight rate of US$2948/TEU on the Asia-Europe route is the highest level in history since SCFI was released in 2009.
2018-2020 SCFI Asia-Europe route freight trends
The rate of the Mediterranean route has increased even more. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the Mediterranean basic port market was 3073 US dollars/TEU, a 28.9% increase from a week ago.
Some industry analysts believe that the actual freight rate of some goods on the Asia-Europe route is higher.
Lars Jensen, CEO of SeaIntelligence Consulting, an industry authoritative consulting firm, believes that SCFI may seriously underestimate the actual freight rate in some cases because it does not consider the additional costs associated with containers and spaces.
He said that anecdotal evidence has shown that in Asia-Europe routes, the actual freight rate of some goods has reached as high as US$10,000/FEU.
The continuous period of high cargo volume, soaring freight rates, port congestion and shortage of containers have increased the risk of supply chain rupture, and more and more liner companies are controlling bookings.
Hapag-Lloyd has announced that due to severe container shortages, until the end of December this year, it will no longer accept 40-foot reefer containers from terminals in Germany, Austria, Switzerland, Hungary and the Czech Republic. In addition, the empty container of 40-foot ordinary container in Hamburg, Germany is not accepted.
This means that bookings in these countries will be affected.
In addition, Maersk and ONE also indicated to the media that before the New Year, they will have to reduce their bookings in Asia.
Faced with criticism that liner companies’ reduced bookings will affect shippers’ shipments, the World Shipping Council, headquartered in the United States, stated: “No one can predict the surge in demand for container shipping this year. see."
The organization believes that the solution to current problems lies in continuous communication between the carrier and the shipper. To restore the entire transportation system to a balanced state, all parties must work together to spend this critical period together.
