shipper Archives

December 11, 2020 / By TJ China Freight / Shipping

Air freight is waiting for warehousing and freight rates are skyrocketing!

1. What is the current air cargo situation?

Air cargo has ushered in the traditional peak season again. Not only has the volume of cargo increased sharply, but also the phenomenon of warehouse explosions and queues. The air freight prices of some routes have also increased or even doubled.

Katie Griley, vice president of operations at Griley Air Freight, revealed that the peak season is coming. Even if the cargo arrives at the local airport, it will take 4 to 8 hours for truck drivers to pick up the cargo from Los Angeles International Airport.

Air freight is waiting for warehousing and freight rates are skyrocketing! How to explain to customers in English?

Query URL: https://www.newsbreak.com/news/2103446982404/peak-season-congestion-traps-truckers-for-hours-at-lax-cargo-terminals

In this regard, the International Air Cargo Association (IATA) stated that during the surge in e-commerce in recent months, the continuous shortage of capacity due to the lack of passenger aircraft services will cause a particularly serious blow to the air cargo industry.

So what is the current domestic situation?

An executive vice president of international freight in Shanghai said that it is now in the traditional peak season for air transportation, and the recent traffic jams and queues in the unloading area of the airport logistics storage area are very serious. The liquidation should start in mid-October, and not only the volume of cargo has increased significantly, but the freight prices of major routes have also increased a lot.

In fact, not only the domestic but also the international air cargo market has been in a high boom this year. The freight rate has also been at a high level for a long time. Some routes have also risen to the highest prices in history.

2. The reason for the explosion of air freight and the skyrocketing freight?

According to a report from CCTV Finance, Dexun Group East China Managing Director Fu Keqiang said that from the second quarter to the present, the four main products that have contributed to the growth of air freight are electronic products, e-commerce channel products, personal protective equipment and auto parts. , These four products accounted for the main growth factors.

Zhao Chao, a senior analyst in the transportation industry of Changjiang Securities, said that on the one hand, the shortage of transportation capacity is difficult to reverse in the short term. On the other hand, when consumption in Europe and the United States is the most prosperous, such as Christmas and other shopping seasons, the overall freight rate should still remain. The high position will continue to rise.

So how to explain to customers in English?

1. Peak season demand soars

Paul Molinaro, head of WHO's business support and logistics operations, told Reuters that a series of factors have driven prices up, including the higher-than-usual increase in e-commerce before Christmas.

According to the U.S. Department of Commerce, e-commerce sales in the United States in the third quarter increased by 37% compared with the same period in 2019. According to data collected by Buy Shares, online shopping spending during the Thanksgiving weekend (including Black Friday and Cyber Monday) increased by 20% to $29.6 billion.

Query URL: https://www.globaltimes.cn/content/1208780.shtml

According to data sent to the Global Times by cross-border e-commerce platform DHgate, shipments from China to the US accounted for approximately 68% of the platform's total sales in September. Peak season for Christmas decoration transportation. The best sellers are Santa sack, solar LED string lights, Christmas snowman, artificial flowers and Christmas masks.

We can tell our customers like this:

Airline body IATA’s chief economist Brian Pearce said that Christmas demand “exaggerates the problem” of a surge in demand for airfreight.

Airline International Air Transport Association (IATA) chief economist Brian Pearce (Brian Pearce) said that the demand for Christmas prompted the explosion of international air cargo.

The COVID-19 pandemic's impact on production in countries around the world and the nearing of Christmas, a peak season for export of Chinese products to Europe and the United States, were part of the reasons for the surge in demand for airfreight.

Due to the impact of the epidemic on the production of countries around the world and the approach of Christmas, which is the peak season for China’s exports to Europe and the United States, this is also part of the reason for the explosion of air cargo.

2. Insufficient capacity

Data from the global air cargo market showed that air cargo demand continued to grow in October, but the growth rate was lower than the previous month.

Website query: https://aircargoeye.com/air-cargo-facing-peak-season-capacity-crunch/

IATA Director-General and CEO Alexandre de Juniac (Alexandre de Juniac) pointed out that air cargo demand is picking up, and we believe this trend will continue into the fourth quarter.

We can tell our customers like this:

Alexandre de Juniac, IATA’s director general and chief executive, notes that the biggest problem for air cargo is the lack of capacity, as much of the passenger fleet remains grounded.That will likely be exaggerated with shoppers relying on e-commerce – 80 per cent of which is delivered by air.

IATA Director-General and CEO Alexander de Juniac said: The biggest problem with air cargo is insufficient capacity, because most passenger planes are still grounded. If shoppers continue to shop online, it is no exaggeration to say that 80% of them are delivered by air.

So, the capacity crunch from the grounded aircraft will hit particularly hard in the closing months of 2020 which were part of the reasons for the surge in demand for airfreight.

Therefore, in the months before 2020, the production capacity of grounded aircraft will be particularly severe, which is also part of the reason for the explosion of air cargo.

3. Soaring freight

It is reported that due to the impact of the epidemic, the United States announced restrictions on flights from Asia and Europe, which affected the capacity of transportation and hauling of goods. Global supply chain disruptions and restrictions have forced operators to rely on commercial aircraft, which has led to a sharp increase in the rates of all-cargo airlines.

Website query: https://www.supplychaindive.com/news/airfreight-cargo-rates-demand-climbs-near-peak-season/588619/

According to a report from the International Air Transport Association (IATA), the highly anticipated releases of electronic products such as the iPhone and Play Station 5 are traditionally shipped by air during Christmas and Black Friday.

Query URL: https://www.supplychaindive.com/news/ups-raises-surcharges-china-us/587260/

The increase in air freight demand before the holidays caused rates to soar again. From October 12th to November 9th, freight rates between China/Hong Kong and the United States increased by nearly 46%, reaching US$7.40 per kilogram, more than double the same period last year.

American Airlines President Robert Isom said last month: “From August to September alone, we doubled our cargo volume and operated 1,900 flights, serving 32 destinations in the third quarter. Provide services locally."

We can tell our customers like this:

A surge in demand for airfreight during the pandemic, coupled with peak season needs, has pushed UPS/Fedex/DHL to once again raise fees on goods flowing from China to the foreign countries.

The surge in demand for air transportation during the epidemic, coupled with peak season demand, prompted UPS/Fedex/DHL, etc. to once again increase the charges for goods from mainland China to other countries.

With holiday season upon us, shippers are yet again forced to shell out higher prices. Decreased capacity and higher rates have been a staple this year, causing fluctuating prices in air cargo especially, and in order to secure space, shippers have paid higher rates and additional surcharges.

With the advent of the holidays, shippers are again forced to pay higher prices. Declining capacity and rising tariffs are the main things this year, especially because of the fluctuations in air cargo prices. In order to ensure space, the shipper paid higher rates and surcharges.

The International Air Transport Association Brian Pearce said at a recent press conference that all signs indicate that air cargo volumes will continue to grow for the rest of the year. And manufacturers (the main driving force of air transport) are particularly bullish. In response to this situation, what are the current measures taken by all parties?

3. What are the measures taken by all parties?

domestic

Faced with the huge increase in demand for international air cargo, airlines have also increased the delivery of international cargo flights . According to statistics, China's international cargo flights increased substantially at the end of October, reaching about 2.3 times the same period last year. All airlines have invested more cargo capacity, and the frequency of both all-cargo aircraft and "passenger-to-cargo" aircraft has increased significantly.

Wang Jianmin, deputy general manager of Eastern Airlines Logistics Co., Ltd., said that the number of "passenger-to-cargo" flights increased significantly in October and November, and there were more than 100 more flights in October compared with September. In November, the number of "passenger-to-cargo" flights increased to 1,000. Around, a substantial increase from October. In November, the utilization rate of freighters reached a peak of 14 hours per day, and some exceeded 14 hours.

foreign

Lu Dongmei, China's chief representative of Lufthansa, said that in order to meet the growing demand for cargo capacity, Lufthansa has turned passenger planes into cargo planes and filled their abdominal cavity with cargo that can fly around the world. In addition to the all-cargo operations 20 cargo flights a week, but China also conducted five weekly flights on passenger aircraft turnaround.

Canadian officials said that due to the impact of the epidemic, its e-commerce market is growing, and there is a chronic shortage of cargo aircraft. Air Canada plans to convert the Boeing 767, which has recently withdrawn from passenger service, to be able to carry large containers and pallets on the main deck. The premise is that the carrier needs to reach an agreement with the pilot.

DHL Express said that due to the grounding of most passenger aircraft, the abdominal muscle capacity is insufficient, although there are plans to provide air charter services to serve certain major markets. But this year still adds six aircraft, which is to overcome the air cargo capacity restrictions caused during the epidemic.

Finally, remind foreign trade friends who are shipping by air in the near future to communicate with customers on capacity in a timely manner, and to be cautious in quoting (each airline may adjust prices frequently) to avoid unnecessary losses.

December 11, 2020 / 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.

December 9, 2020 / By TJ China Freight / Shipping

Space booking is suspended, freight rates continue to soar

Magic 2020, the shipping industry has breaking news every day, and it always affects the hearts of foreign trade forwarders.

Today, the Moments of Friends screened the video of the driver grabbing the box. Truck drivers flocked to "queue" to pick up the cabinet. You earn and I grab one box, and they are almost "fighting".

Truck drivers "grab the box" are popular! Space booking is suspended, freight rates continue to soar, analysis agency: the peak season of the Chinese New Year container shipment may end

This is a real response. Even if the shipping company normally releases the cabin, there is no guarantee that there will be boxes. It is difficult to find a box in China.

Another heavy news is that CMA CGM will directly stop accepting bookings from Asia to Europe in the next three weeks, and temporarily stop bookings on the Asia-Northern Europe route in the 49th, 50th and 51st weeks. The European route has basically ended this year. Booking.

In recent months, due to the uneven recovery of the global economy, the rebound of epidemics in many countries, and the arrival of traditional transportation seasons such as Christmas and New Year, congestion has occurred in many European and American ports, but many domestic ports are extremely short of containers.

Under such circumstances, many large shipping companies impose additional charges such as congestion surcharges, peak season surcharges, and shortage of containers.

Following the further surge in freight rates on the European and Mediterranean routes last week, data shows that this week, China’s export container shipping market performed stably, and transportation demand remained stable. The freight rates on most shipping routes rose, which led to a rise in the composite index.

The largest increase was the year-on-year growth rate in Northern Europe of 196.8%, the year-on-year growth rate in the Mediterranean Sea was 209.2%, and the year-on-year growth rates in the West and East of the United States were 161.6% and 78.2%, respectively. 390.5%.

As Christmas approaches, shippers and their freight forwarders in Europe and North America continue to generally face the problems of container shortages, port congestion, declining capacity and soaring freight rates. Many people in the industry are talking about the current "peak season" in the container industry. "When will it end?

According to the latest analysis conducted by Lar Jensen, CEO of shipping analysis agency SeaIntelligence, on behalf of the Baltic Exchange, the answer is likely to be around the Lunar New Year holiday in February, because the options available to supply chain stakeholders are very limited.

The root cause of the current problem is the unexpected demand for container cargo due to the global social blockade.

Jensen said that there are three key issues in meeting higher levels of demand: container, ship and port capacity constraints. He wrote: "If demand decreases, the problem will be resolved immediately."

"However, shipping companies may show their determination to reduce capacity again in order to cope with the downward trend in demand. This means that very high spot freight rates will drop, and new equipment available surcharges will disappear, but the interest rate will not It's too likely to crash." He added.

In these strange years, it is difficult for the industry to reach a consensus, but there are few signs that consumer demand will decline in the short term.

Jensen said that for many shippers and freight forwarders, the most pressing problem is the serious shortage of containers, but as China's container manufacturing plants are in full production, this problem may be alleviated before the Chinese New Year on February 12.

"This problem can be solved within a few months." He said: "The solution is that the empty containers are shipped back from Europe and North America faster, coupled with the full work of China's container factories... The current situation can be After the Spring Festival, it ended peacefully."

However, it will take longer to solve the problem of global ship and port capacity. When the capacity is insufficient, the traditional approach of shipping companies is to turn to the leasing market. However, due to the surge in demand, only a few boats are available for hire.

"As a result, the time scale for increasing capacity has changed from weeks to years now, because it will require the construction of new ships. Moreover, since the peak demand may be temporary, this solution will not help solve the problem." He wrote.

Another option for shipping companies is to increase their ship speed. Faster service can free up the structural capabilities of the shipping group, although this does increase costs.

"In general, considering the optimization of fuel, when modifying or building these ships, they cannot sail as fast as ten years ago, but there is still a certain degree of additional capacity that needs to be activated. However, this also comes at a cost. , Including the sharp increase in carbon emissions."

Finally, there is the issue of port inventory, which he admits is almost powerless in the short term.

"The surge in demand and the increase in ship arrivals have not only affected the number of containers that the port can handle, but also the number of ships that can be berthed and served."

"In addition, the surge in demand has caused larger ships to arrive with more cargo than originally planned, which means longer berth stays, a chain reaction, and subsequent ships will be delayed."

"The expansion of the port's capacity can only be measured in a few years at most. In some areas, large expansion projects can take up to 10 years."

December 9, 2020 / By TJ China Freight / Shipping

The off-season is not “light”, and container demand remains strong

The container throughput of global ports continued to increase in October, with a total volume of 15.2 million TEUs that month. So far in 2020, the container throughput has reached 137.7 million TEUs, which is only 2.7% lower than in 2019.

The off-season is not "light"

The latest data from Container Trades Statistics (CTS) shows that the traditional freight off-season in 2020 will not be "light", and the performance will exceed expectations, and the market demand will continue until the fourth quarter . In October, the trans-Pacific shipping volume dropped by 4% from September to 2 million TEUs, but it was still a quarter higher than the same period in 2019. The demand is so great that although operators have been increasing capacity, there is still a gap.

Demand on the Asia-Europe route has also recovered, although its performance is not as strong as the Pacific route. In October, the shipping volume of the Asia-Europe route was 1.4 million TEUs, an increase of 7% over 2019. However, from the perspective of the whole year, the 13.9 million TEUs so far in 2020 is still 7% lower than 2019.

Equipment gap is nearly 1 million TEU

The Asia-Europe route is currently facing the same problem as the Pacific route, that is, the shortage of container equipment and capacity keeps the freight rate at a high level. Sea-Intelligence analysts said that the problem of container shortages is very difficult. The imbalance of east-west traffic on the Pacific route has made the shortage of equipment worse . The current North American imports account for most of the global increase in shipping containers, while North American exports have Weakening. Under normal circumstances, the imbalance of east-west shipping volume will usually cause a monthly deficit of about 2.5 million TEUs in Asia. This gap is filled by empty containers from other regions . But in October 2020, this number soared to 3.4 million TEUs, which means that the equipment gap has reached nearly 1 million TEUs.

Sea intelligence believes that the lack of empty containers is the primary problem faced by shippers. However, this problem is currently difficult to solve, and there is no way to quickly mobilize 1 million additional empty containers, especially when many ports are currently facing congestion. Analysts predict that this situation will continue until at least early February 2021.

December 8, 2020 / By TJ China Freight / Transport

HOW DO FREIGHT FORWARDING COMPANIES WORK?

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.

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.

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.

December 8, 2020 / By TJ China Freight / Shipping

The freight rate in Europe and the land will continue to rise after the soaring

After a further surge last week, the spot freight rate for containers from Asia to Northern Europe is now 130% higher than the beginning of the year, up 200% year-on-year. The Far East-Europe trade route is still under tremendous pressure, and the freight rate will continue to rise further.

In the current peak season, the influx of imported goods from Asia into the United States does not seem to have eased. Los Angeles and Long Beach are still in a state of collapse and paralysis. There are as many as 20 ships lining up near the west coast, waiting for the empty space in LA Long Beach Port to unload.

Australian ports remain congested, with more than 75,000 teu stranded in Sydney.

Freight rates in the Asian intra-route market remained stable, but from the same period last year, freight rates across Southeast Asia have increased by a staggering 390.5%.

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

Europe-to-land route : The North European spot freight rate of the Shanghai Container Freight Index (SCFI) just released by the Shanghai Shipping Exchange increased by 13.5% to US$2,374 per TEU, and the Mediterranean freight rate increased by US$165 to US$2384, spot The freight rate increased by 7.4%. It is worth noting that the year-on-year growth rate in Northern Europe was 196.8%, and the year-on-year growth rate in the Mediterranean was 209.2%. But in fact, the market freight rate is much higher than this.

A Shanghai-based non-vessel carrier said that several shipping companies are currently offering more than US$6,000/40-foot container to Rotterdam and more than US$8,000/40-foot container to the UK.

A freight forwarder in China stated that the carriers on this route are now purely focused on maximizing freight revenue, regardless of all other agreements. He said: "Shipping companies only give priority to higher-priced spaces-whoever pays more will get the space."

Christoph Baumeister, senior trade manager for Flexport Asia/ISC-Europe, said the situation for Asian shippers was “worse than week after week”. He added: "The Far East-Northern Europe/Southern Europe trade route is still under tremendous pressure, and freight rates will rise further this week."

Moreover, according to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe of three months or less is 200% higher than a year ago, at $4,831 per 40 feet.

Although Xeneta’s long-term contract freight data showed an increase of 28% to US$1,648 per 40 feet, it pointed out that despite the peak contract season, few deals have been concluded because shippers and carriers think it’s not the time.

In the trans-Pacific region , the spot freight rate remained basically unchanged last week and stabilized at a record level. According to SCFI data, the spot price on the west coast of the United States rose by US$68 to US$3947 per 40 feet, while the port price on the east coast fell by US$8. To $4,700 per 40 feet. The year-on-year growth rates of the West Coast and East Coast of the United States were 161.6% and 78.2%, respectively.

Since mid-September, due to the intervention of Chinese regulatory agencies, the spot market on this route has remained stable, and shipping companies hope to obtain guaranteed income from their premiums.

As the influx of merchandise imports from Asia into the United States during the peak season did not seem to ease, the Port of Los Angeles data confirmed that the port's imports in the 50th and 51st weeks increased by 37% and 54% year-on-year respectively.

The continued growth of imports has put tremendous pressure on the San Pedro Bay ports in Los Angeles and Long Beach. Freightos Chief Marketing Officer Eytan Buchman said: "There are reports that as many as 20 ships are lining up near the west coast, waiting for the unloading of empty spaces in the Port of Long Beach, LA. Retailers are eager to put these goods on the shelves before the holidays."

As for Australia and New Zealand routes , with the gradual improvement of the epidemic situation and the continuous growth of transportation demand during the traditional peak season, the market freight rate has increased. According to the SCFI index, the freight rate (sea freight and ocean freight surcharge) for exports from Shanghai to the basic port of Australia and New Zealand was US$2490/TEU, up 2.5% from the previous period. But the Australian shipping business is currently in a "state that has never been so bad."

The continued "chaos" in the Australian container supply chain will mean that some retailers' shelves will be empty during Christmas.

The impact of supply chain delays caused by the Maritime Union of Australia (MUA) strike in early October continues. The shipping company stated that the disruption of shipping schedules caused a backlog of "8 to 10 weeks" delays (8 weeks of delay means that retailers will not have inventory "until January of next year"), but the union denies that this is the reason. Rather, it points to the increase in demand during the peak season.

According to the Freight and Trade Alliance (F&TA), trade imbalances, resulting in a large surplus of empty containers and lack of storage areas for storing these containers, are still the main problems hindering the supply chain. F&TA Director Paul Zalai said: “Currently, it is estimated that the imbalance of containers is 75,000 teu, which is stranded in Sydney’s empty container yard and operator’s warehouse. The surplus of empty containers will cause Sydney’s logistics to fall from the current congestion state to an unsolvable situation. deadlock."

The peak season demand has increased the spot freight rate from China to Melbourne to US$2490, compared with US$1648 in mid-October. Paul Zalai believes that the country’s shipping industry has “never seen such a bad situation.” He explained: “Our ports are congested, services are limited, freight prices are at record highs, detention, congestion and terminal access surcharges continue to increase. "At the same time, similar shipping delays have also affected importers in the Tasman region. Due to the chain reaction caused by port congestion in Australia, the Port of Auckland in New Zealand experienced delays this year.

The market freight rates of intra-Asia routes also remained stable last week, but from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%.

Although these are eye-catching figures, it is important not to forget that 65% to 75% of all goods are transported on the basis of contract freight rates rather than spot market freight rates. However, due to the exhaustion of the number of contracts (many contracts are in unexpected periods when consumer demand is out of control) the rest tends to the spot freight market. When contract negotiations restart next year, the strong bull market will also benefit shipping companies.

Andy Lane of CTI Consulting in Singapore commented: “There is still one month before the new Asian-European contract. This is under the background of record-breaking spot freight rates. Prices may rise sharply, which will have a real impact on the market."

December 4, 2020 / By TJ China Freight / Shipping

Where did the empty containers go?

In the past few months, due to the severe shortage of available empty containers, the global supply chain has been hit, causing exporters to have a headache. However, new research shows that there is an obvious problem in the container supply chain-empty containers stay in warehouses for an average of 45 days, while in China, the average time for each idle container is more than two months.

The research project of German company FraunhoferCML and Container xChange shows that although China and the United States urgently need containers, the average residence time of empty containers in warehouses is 61-66 days, which is much higher than the global average of 45 days.

The east coast of the United States is usually the location of surplus container equipment (the 40DC container availability value was 0.7 last year), but the container availability rate dropped to 0.43, indicating that there are actually fewer containers than needed.

The researchers said that compared with the Middle East (21 days on average) and Europe (23 days on average), the high standard deviations of 85 days in North America and 129 days in Asia indicate that in many cases, containers stay in warehouses longer than average. Much more.

Container xChange is a platform that connects users and suppliers. The platform stated that the availability of containers across China is still at a record low, while the surge in shipping containers from Asia has overwhelmed US ports, and retailers are eager to put their products on the shelves.

Not only is there a serious shortage of 40-foot tall containers (hc) in the shipping market, but there is also a shortage of 40-foot standard containers, and even 20-foot containers are sometimes in short supply.

The container availability rate of 40HCs is only 0.05 CAx (container availability rate) points, compared with 0.63 in the same period last year.

Asia's container manufacturing industry is working overtime to produce, which accounts for 45% of the global container manufacturing market. China International Marine Containers, the world's largest container manufacturer, announced an increase in its orders.

The factory is stepping up container building, and container orders have been scheduled to the first quarter of next year. Even so, the demand for millions of containers has made it impossible for container manufacturing to quench its thirst. The world's three largest container leasing giants have issued a warning that the shortage of containers will continue for four months.

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

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

In order to alleviate the serious imbalance in equipment, shipping companies have adopted an active strategy for exports to Europe and the United States, suspending orders, and preferring to use as many empty containers as possible to fill return ships.

In fact, in order to prevent all but the most expensive goods, European exporters to Asia are required to pay more than $5,000 per 40-foot container to ensure shipment in December. A British freight forwarder said that many shipping companies now refuse to accept export orders before mid-January. "Our customers are willing to pay such a high freight, but due to port congestion, we are still working hard to get the boxes away. Some boxes have been on the dock for more than four weeks and still don't know when they will be shipped."

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

The current shortage of containers is a once-in-a-century problem in the history of the global supply chain, and it is basically unsolvable in the short term.

December 3, 2020 / By TJ China Freight / Shipping

The whole route has generally risen, and the freight rate continues to rise.

Affected by the epidemic, more and more countries have been "closed" for the second time, and the ports of many countries have become full of containers. Lack of containers, exploded cabins, dumped containers, jumping into ports, and frantically rising freight rates, foreign traders are under unprecedented pressure.

The latest data shows that European freight rates have increased by 170% year-on-year, and Mediterranean freight rates have increased by 203% year-on-year. In addition, as the U.S. epidemic becomes more severe and air transportation routes are blocked, shipping prices will continue to rise.

With strong shipping demand and a large shortage of containers, shippers are facing soaring container freight and surcharges, but this is just the beginning. The market may become more chaotic in the next month.

Freight rates continue to soar, 170% in Europe and 203% in the Mediterranean

China's export container shipping market continues to be high. The freight rates of many ocean routes increased to varying degrees, and the composite index continued to rise.

On November 27, the Shanghai Export Container Freight Index released by the Shanghai Shipping Exchange was 2048.27 points, an increase of 5.7% over the previous period. With the increase in freight rates and surcharges, Asia-Europe shippers will face more pain.

The whole route has generally risen, and the freight rate continues to rise. The shipping company announces the price increase notice in January next year!

Last week, the spot freight rate of containers from Asia to Northern Europe rose by 27%, breaking through US$2,000/TEU. The carrier plans to further increase FAK prices in December. The Northern European part of the Shanghai Container Freight Index (SCFI) rose by US$447 to US$2091 per TEU, up 170% year-on-year.

The price of SCFI at Mediterranean ports also surged 23% to US$2,219 per TEU, a 203% increase from 12 months ago.

For shippers in Asia and Europe, this pain of high freight rates shows no sign of ending. In addition to the large surcharges and premium product fees currently charged to ensure on-board equipment and space, freight rates will be further increased next month. .

On the return route, the situation of European exporters can be said to be worse; it is reported that they cannot secure bookings to Asia at any price before January.

Continuation of the high market, the overall freight rate continues to rise

The continued shortage of containers has further exacerbated the lack of capacity in the market, and the freight rates of most routes have increased, which has pushed up the comprehensive index.

On the European route, the capacity continues to be insufficient, and most of the flight booking rates have risen again.

For North American routes, the market supply-demand relationship remained at a relatively good level, and the spot market freight rates were high and stabilized.

On the Persian Gulf, Australia and New Zealand routes, and South America routes, the demand for transportation is strong, and the market freight rates continue to rise, rising by 8.4%, 0.6% and 2.5% respectively in this period.

European routes have strong transport demand. The repeated epidemics in Europe have stimulated local import demand, and the market volume has remained high. The tightness of airline capacity is still increasing, and the contradiction between supply and demand has not been alleviated. Last week, the average space utilization rate of ships in Shanghai Port basically remained at the full level. Affected by this, most airlines will raise their freight rates at the beginning of next month, and the spot market freight rates will rise sharply.

On North American routes , the new crown epidemic in the United States is still severe. The cumulative number of confirmed cases and the number of new cases in a single day are still top of the list. The severe epidemic hinders the unpacking and transshipment of materials. The market capacity is relatively stable, but the market capacity is limited by the ever-increasing shortage of containers, the upside is limited, and the supply and demand conditions remain unchanged. Last week, the average space utilization rate of ships on the US West and East US routes at Shanghai Port was still close to full capacity. The route freight rate remained stable, and the spot market booking price was basically the same as the previous period.

For the Persian Gulf route , the market performance is generally stable, demand remains stable, market capacity is controlled within a relatively reasonable range, and the relationship between supply and demand remains balanced. Last week, the utilization rate of the shipping space of Shanghai Port remained above 95%, and individual flights were fully loaded. Most commercial airlines maintained their freight rates unchanged, and a few adjusted slightly, and the spot market freight rates rose slightly.

For Australia and New Zealand routes , the destination market is in the peak transportation season, transportation demand is rising steadily, and the relationship between supply and demand remains good. Last week, the average space utilization rate of ships in Shanghai Port remained above 95%, and most flights were fully loaded. Most airlines have maintained their booking prices at the previous period, but some have slightly increased, and the spot market freight rates have increased.

For South American routes , South American countries have insufficient capacity due to the epidemic, relying on imports for a large number of materials, and transportation demand continues to run at a high level. In this period, the average space utilization rate of ships in Shanghai Port was close to the full-load level. Under these fundamentals, most airlines increased their booking prices towards the beginning of the month, and the spot market freight rates increased.

Major shipping companies will issue another notice of price increases in 2021!

▍Maersk charges a peak season surcharge from the Far East to Europe

Maersk announced that it has imposed a new peak season surcharge (PSS) in Europe and East Asia from December to next year.

Suitable for refrigerated goods from the Far East to Northern and Southern European countries. The surcharge will be $1000/20' reefer container, $1500/40' reefer container, and will take effect on December 15, Taiwan PSS will take effect on January 1, 2021.

Far East to Northern Europe

Far East to North and South Europe

The Maersk 2M Alliance partner Mediterranean Shipping Company (MSC) will use the following various (FAK) rates from Europe to Canada and Mexico.

• Carrier Security Check Fee (CSF): US$11 per container

• Emergency Fuel Surcharge (EBS) (when applicable): US$500 per refrigerator, US$100/TEU per dry container

In addition, MSC has made the following rate adjustments from December 1, 2020 until further notice, but not more than December 31, 2020.

▍ CMA CGM

CMA CGM, the world's third largest container shipping company, has started the new year and will introduce the latest FAK rates from Northern Europe to Canada, the east coast of Mexico, the east and west coasts of the United States and the Gulf of Mexico.

• Cargo: dry containers, reefer containers, tank containers and special equipment

• Cargo: all types

• USEC, US Gulf and USWC include New York, Norfolk, Savannah, Charleston, Houston, Miami, New Orleans and Oakland.

From January 1, CMA CGM will also implement the following FAK rates for dry containers, reefer containers, open containers, pallets and shipper-owned containers (SOC).

▍Hapao features GRI rates from East Asia to the United States and Canada

Effective date: January 1, 2021.

This increase applies to all dry containers, reefer containers, non-working reefer containers, tank containers, frame containers and open top containers.

East Asia to North America (United States and Canada):

USD 960 for all 20' container types

USD 1,200 for all 40' container types

East Asia includes countries/regions in Japan, South Korea, China/Taiwan/Hong Kong/Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, the Philippines and Russia’s Pacific Rim provinces.

In addition, Hapag-Lloyd also released new (GRI) rates for all dry containers, reefer containers, non-operating reefer containers, storage tanks, frame containers and open top containers from South Asia and Northeast Asia to Australia , Effective from January 1st.

Southeast Asia to Australia

• US $ 150/20'

• US $ 300/40'

Northeast Asia to Australia

• US $ 300/20'

• US $ 600/40'

Southeast Asia includes Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, while Northeast Asia includes South Korea, China, Hong Kong, Macau, and Taiwan.

According to current market conditions, Hapag-Lloyd will increase the GRI rate for all cargo and all container types from East Asia to the East Coast of South America from December 7, 2020, to USD 550 per container.

Hapag-Lloyd announced the rates for all 20' and 40' (high container) goods in the westbound trade from East Asia (including Japan) to Northern Europe and the Mediterranean. The collection will start on December 15, 2020, and will be collected until further notice. Various cargoes (FAK) subject to marine fuel recovery (MFR):

December 3, 2020 / By TJ China Freight / Shipping

Where are the empty boxes that can’t be grabbed?

The port is not the boss, the ship is not the boss, and the cargo is the boss. This is a "golden sentence" circulating in the port and shipping industry. However, the freight forwarder who has been busy in the front line of cargo booking may tell you that at this moment of chaos in this industry, the port is not the boss, the ship is not the boss, and the cargo is not the boss. You can't get the empty space if you grab the head. The box is the boss .

In recent weeks, due to a severe shortage of empty containers, some container ships sailing from Asia to Europe cannot even be fully utilized. A shipping source said, “Recently, we have to vacate some spaces because China does not have enough containers to meet freight demand.” Almost all transport companies have reported that they have a serious shortage of 40-foot high containers (hc) and 40 There is also a shortage of standard containers, and even 20-foot containers are sometimes in short supply.

The latest container availability index report from Container xChange shows that the availability of containers in various ports in China is at a record low. From the perspective of the container availability index, the index higher than 0.5 indicates a surplus of empty container inventory, and lower than 0.5 indicates a shortage of empty containers. The current availability of 40-foot containers in China is only 0.05 CAx points, compared with 0.63 points in the same period last year .

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

While the Asian port and shipping industry is desperately desperate for empty containers, warehouses across Europe, especially in the UK, are filled with "immobile" boxes in troubled ports and overcrowded docks.

Affected by the epidemic, shipping companies have used methods such as suspension of voyages and port jumps to control capacity and adjust freight rates, but to a certain extent they also broke the balance of empty and heavy containers between routes. With the gradual recovery of the economy, the trade demand of various countries has rebounded, and the exports of Europe and the United States have grown strongly. However, under the continuous epidemic situation, the various quarantine and epidemic prevention measures added by the port customs will inevitably slow down the circulation of containers. Coupled with the gathering of festivals such as "Black Friday" and "Christmas", the port operation capacity will not be able to keep up with the number of boxes. , The result is that a large number of containers are blocked in the port, empty containers can not go out, heavy containers can not enter. In some British ports, the volume of container transportation in recent months has even been 30% higher than normal, resulting in too many empty containers throughout the UK, and even the alarming phenomenon of containers being piled "at your doorstep".

A British freight forwarder said, "Even if customers are prepared to pay close to crazy freight rates to ensure that the goods are shipped, we are still busy trying to transport the empty containers because the port is already full. Some empty containers on the dock are already After being placed for more than four weeks, we still don’t know when they will be loaded."

In order to ensure the smooth operation of global logistics, liner companies have adopted some unconventional container deployment strategies, such as shortening the free container usage period to stimulate and speed up the circulation of containers on key routes; key routes and long-distance base ports give priority to container use and priority Vacant containers are deployed to countries and regions such as China, Southeast Asia, etc.; the monitoring of container return is slow. For example, some areas in Africa cannot receive goods normally, resulting in whether the container is returned or not. The liner company will comprehensively evaluate and reasonably release the container; some shipping companies even suspend it Made export reservations to Europe and the United States in order to fill as many empty containers as possible back to Asia. However, due to the empty container regulation of shipping companies, the freight rates on the Asia-Europe routes have also been increasing, and the market seems to be in a vicious circle of chaos.

At the same time, a survey conducted by xChange and FraunhoferCML, a German maritime research consultant, showed that despite the large-scale progress in global port handling technology, the time that containers remain empty in ports is still surprisingly long. This report unexpectedly shows that the global container vacancy phenomenon is very serious. The vacant time of each container in the port is 45 days on average, while the vacant time of containers in empty container shortage areas such as China and the United States is longer, 61 days and 61 days respectively. 66 days.

Obviously, the circulation of empty containers is a problem that the entire industry needs to face squarely, but it has been ignored by the industry for a long time. In the sudden crisis of the epidemic, the "old problems" have further deteriorated and gradually developed into today's thorny problems.

It is understood that CIMC, which accounts for 45% of the global container manufacturing market, said that the company is currently stepping up container building and container orders have been scheduled to the first quarter of next year. However, waiting for the new containers to leave the factory, after all, "far water can't save the immediate emergency", and the situation of "a box is hard to find" is expected to continue for some time. In addition to working overtime and deploying empty containers, what else can shipping companies and ports do? The structural empty container circulation problem may be difficult to obtain an optimal solution in a short period of time, but "it is not too late to make up for it". It is time to put more resources and efforts on solving the empty container problem.

December 2, 2020 / By TJ China Freight / Shipping

In addition to suspension and additional surcharges, another 5 container ships jumped to the British port

As shipping companies continue to detain containers in Nordic ports and charge exporters more than US$5,000 per container to ship a container to Asia, there is increasing pressure for regulatory intervention.

British importers are currently facing major challenges. The shipping division of the Ocean Alliance has decided to transfer the other five ships that arrived in Felixstowe in December to Zeebrugge, Belgium.

According to a consultation conducted by the shipping company to its British customers last Friday , the five ships Cosco Shipping Azalea, Ever Goods, Ever Globe, CSCL Jupiter and CSCL Uranus will no longer call Felixstowe, and will unload the British ships at Belgian ports. Imported products.

In addition, the partners of 2M and THE Alliance are also transferring ships from the congested British port, where the former is loading and unloading British cargo in Bremerhaven.

It is understood that due to the lack of open feeder ships and terminal capacity issues, it is almost impossible for British goods to be transferred before January next year. Some shipping companies are discussing not calling Felixstowe throughout January because they worry that the port will be saturated in a few weeks after Christmas.

However, as the terminals in Antwerp and Rotterdam have also become very congested, the choice of liner companies is becoming increasingly limited. However, a source from a shipping company said: "Our first priority is to reduce imports before shipping our container equipment back to Asia."

British export orders have been suspended by a number of shipping companies, and more and more orders can only be booked at other Nordic ports paying additional fees.

MSC said on Friday that it will significantly increase the FAK fee for a 40-foot container from Antwerp to Shanghai in December by 300% to US$5,000. MSC explained that it is facing very serious operational problems that have seriously affected the reliability and regular supply of inventory.

A source at a rival shipping company said the strategy is to block bookings so that MSC can return its empty containers to Asia more quickly.

He added: "If they can indeed get some reservations at this price, it will be a win-win."

At the same time, the European Shippers Council (ESC) and the European freight forwarders association CLECAT have joined forces to lobby the European Commission to intervene in this crisis.

Denis Choumert, president of ESC, said: "Shipping companies have been taking advantage of the tight capacity to increase revenue far beyond cost, which makes customers unhappy."

"The continuous unreliability of service, coupled with the record profits of the shipping company during the crisis, clearly illustrates a severely disturbed market, and shows that the carrier has substantially increased the spot freight and levied higher than the fixed-term contract price The huge surcharge."

A joint communiqué stated that ocean shipping companies serving Europe benefited from “privileges” that were provided to them by the Union’s Prevention of Immunity Regulations (CBER), which was updated in April.

"Such privileges are now too much because they allow shipping companies to use tools to manipulate the market," adding that the European Commission has not responded to the crisis so far, which is "confusing".

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The freight rate in Europe and the land will continue to rise after the soaring

Where did the empty containers go?

The whole route has generally risen, and the freight rate continues to rise.

Where are the empty boxes that can’t be grabbed?

In addition to suspension and additional surcharges, another 5 container ships jumped to the British port