Spanish drivers have been on strike for up to two weeks over rising fuel costs, severely disrupting the country’s supply chain and hitting production and manufacturing in Spain.
After more than 12 hours of negotiations on Thursday, March 24, the Spanish government has reached a tentative agreement with a major transport union to provide fuel subsidies for striking truck drivers.
However, as is common in Spanish trade union politics, there were several smaller and different union organisations organising the transport lockout, which rejected the proposal and continued the strike into its third week.
To this end, the Spanish government this week announced a financial package of 500 million euros in direct assistance to the road transport sector, which focuses on reducing taxes on "specialty diesel". The package will be approved by the Spanish Council of Ministers on March 29.
However, the financial package announced by the Spanish government failed to end the drivers' strike.
Three Spanish unions, which mainly represent small businesses, have joined the Platform for Defending the Trucking Industry, an informal association of truck drivers and owner-operators who were the main drivers of the two-week strike.
As the strike action nears its third week, a ripple effect is being felt on roads, supermarkets and restaurants across Spain. Madrid, Valencia region, Basque Country, Andalusia, Navarra, Galicia, Murcia and other parts of Spain have been reported as truckers block major roads, ports, industrial areas and intersections Traffic jams for several kilometers.
Supermarket shelves are empty, with shortages of fruit and vegetables, milk, cheese and other dairy products, especially meat and fish. The dairy industry has been severely affected, with thousands of litres of milk spoiling in factories without trucks moving across the country.
Bars and restaurants across Spain are also feeling the effects of the strike action. Many were forced to change or adjust their menus and even raise prices to make up for some of the losses.
As of Friday morning, the situation remained fluid and it was unclear whether the government would actually negotiate with the striking truck drivers, with demonstrators in Madrid calling for the resignation of Transport Minister Raquel Sanchez as a condition of ending the strike.
This week, food processing multinational Danone warned of "imminent supply disruptions" due to a strike by truckers, and that if a solution cannot be found quickly, it will have to make major decisions and temporarily suspend four of its subsidiaries Activities of a Spanish dairy and three mineral water plants.
Yesterday, it was reported that the company had halted production at one of its breweries, and Dutch brewer Heineken also warned that it may have to cut production due to a lack of some supplies.
The country's truckers have been on strike for two weeks, severely disrupted supply chains, and hit production and manufacturing.
German supermarket chain Lidl has closed two stores in Asturias due to supply difficulties, and other retailers including Aldi have also reported shortages of certain products, such as milk, flour and oil.
The prolonged strike has raised fears that supermarket shelves will be empty and threatens road exports of Spain's fruit and vegetables during a crucial time of the year for the market.
The strike also affected the auto industry, with assembly lines disrupted by strikes by truckers and roadblocks, local media reported. Production at Volkswagen's Pamplona plant has been hampered by a supply shortage and Ford has proposed temporary layoffs for the second quarter as it struggles to secure deliveries of critical components and microchips. Opel and Mercedes were also forced to scale back their operations.
The Spanish government is believed to have mobilized 24,000 police officers to help escort truck drivers who were not involved in the strike.
Due to the prevalence of port congestion and box shortages in Europe and the United States, freight volumes on the European and American routes will remain high.
Industry insiders predict that shipments from Asia to Europe will continue into the third quarter, and delays in US and European ports will continue to be the main bottleneck in the supply chain.
The National Retail Federation (hereinafter referred to as NRF, The National Retail Federation) predicts that this year's retail spending and consumer demand may further soar, the increase may be as high as 8.2%. According to NRF data, due to the substantial increase in demand, container throughput will increase by 23% in the first half of the year.
Consultant Jon Monroe pointed out, “Given that many importers are struggling with low inventories, replenishing inventory in order to meet their volume may be the key driving force for this year’s growth. Therefore, the question that everyone needs to face is how to deal with another possible occurrence. A turbulent year?"
Monroe said that most cargo owners (BCO) now intend to end contract negotiations and try to plan for expected market fluctuations, which may mean that contract requirements have not been met, soaring freight rates and shipping schedule reliability have been put on hold again.
Monroe made some suggestions for companies facing supply chain disruptions this year, including finding alternative delivery ports for imported goods other than Los Angeles and Long Beach, while optimizing warehouse efficiency while free time is reduced.
According to the table below, it is currently estimated that the "new normal" delivery time for goods arriving on the West Coast of the United States is currently expected plus 4 to 5 weeks.
The estimated delivery time (cargo is delivered via DC) is an additional 4 weeks for LA-LB port (an additional week this year)
The current situation of European cargo owners is similar to that of the United States. Port congestion is still the main problem, and the shortage of containers has exacerbated these difficulties. Especially in the United Kingdom, due to the problem of the space for storing empty containers, there has been a significant increase in delays in container delivery. Brexit has also had a certain impact.
According to data from Container xChange, “the trade interruption and continued congestion after Brexit are causing serious container accumulation in British ports.” said Dr. Johannes Schlingmeier, CEO of xChange, when the CAx index exceeds 0.5, it indicates that more containers are imported than exported. The index "increased significantly last year, with 40-foot containers rising from 0.71 to 0.86, and 20-foot containers rising from an average of 0.72 to 0.85."
Schlingmeier said, “The British ports are full of empty containers. If this problem becomes too serious, you may see additional charges for new (arriving) containers next.”
Container xChange stated that the link between Brexit and CAx is that as the United Kingdom leaves the European Union, British ports (mainly the Port of Felixstowe, but also the ports of Liverpool and Southampton) are facing severe congestion. British companies have become a problem, and some shipping companies have increased surcharges.
"To make matters worse, some shipping companies are currently unloading at EU ports such as Hamburg, Rotterdam and Antwerp to avoid congestion at British ports. As a result, the CAx values of these ports have increased in the past few weeks," Schlingmeier explained. And added a reminder that CAx will further monitor the number of containers entering and leaving the port. Four or five months ago, shipping companies waited for return goods at European ports for two months, and now they are "carrying back to Asia with empty containers full."
Clarkson predicts that the volume of seaborne trade this year will exceed the level of 2019
Clarkson Research Services acknowledged that major uncertainties still exist, but it is expected that the global seaborne trade for the whole year of 2021 is not only expected to return to the level of 2019, but also expected to be this level.
Clarkson predicts that this year's seaborne trade volume will increase by 4.2% to 12 billion tons, which is 0.5% higher than the level in 2019. Clarkson estimated in a recent weekly report that in 2020, global seaborne trade will fall -3.6% for the whole year to 11.5 billion tons. In the first few weeks of 2021, most non-tank shipping industries will show high utilization rates and high rates.
The International Monetary Fund (IMF) predicts that the global economy will grow by 5.5% this year. Following a 3.5% drop last year, the economy in 2021 will grow by 1.8% over 2019. Looking at emerging economies and developed economies separately, only emerging economies will return to the level of 2019 this year. The IMF expects that emerging economies will grow by 6.3% and will fall by 2.4% in 2020. On the other hand, advanced economies are expected to grow by 4.3%, which is lower than the 4.9% decline in 2020.
A report from the Baltic International Chamber of Shipping (BIMCO) at the end of last month pointed out that the recovery in 2021 will not bring good news to everyone. The exact speed of the recovery will depend on the development of the epidemic and changes in travel restrictions and other containment measures.
For most of 2020, the Port of Los Angeles has been struggling to deal with the problem of container surplus. Now that there has been a dramatic turning point, the Port of Los Angeles has also experienced a shortage of containers.
According to the latest statistics from Container xChange, a professional organization in the container monitoring field, the Container Availability Index for 40-foot containers in the Port of Los Angeles has dropped to 0.29.
Container xChange’s marketing director explained: “In the 49th week of 2020, the port’s availability index value for 20-foot containers and 40-foot containers plummeted to 0.27. Compared with the average index from week 1 to week 8 of 2020, these two Both containers dropped by 57%."
It is understood that when the container availability index is 0.5, it represents market balance. If it is less than 0.5, it represents a shortage of containers.
This means that the Port of Los Angeles has a serious shortage of containers.
In the previous Port of Los Angeles, due to the large increase in import volume and the epidemic factor, the port was congested on a large scale, and the efficiency of container turnover was very slow. At the peak, 10,000-15,000 containers were stranded at the terminal, and normal operations were severely affected.
According to a research report jointly issued by Container xChange and FraunhoferCML, a maritime logistics research organization, in the third quarter of 2020, there will be approximately 1.5 million containers in the United States with a turnover time of more than 115 days, while the normal average time should be less than 80 days.
Previously, due to the large backlog of containers in the Port of Los Angeles affecting the supply chain, liner companies conducted large-scale empty container deployment to ensure the normal operation of trans-Pacific routes.
As empty containers continue to be shipped back to the Asian market, the situation at the Port of Los Angeles has undergone a dramatic turn.
The industry also analyzes that the current shortage of containers in the Port of Los Angeles is related to the serious port congestion, the imbalance of market supply and demand, and the labor shortage caused by the outbreak of the Los Angeles Port.
Container xChange CEO Johannes Schlingmeier previously stated that since the summer of 2020, the U.S. container transportation supply chain has been under pressure, and the Port of Los Angeles is facing labor shortages caused by the outbreak of the new crown pneumonia epidemic.
Lars Jensen, CEO of Sea Intelligence, an industry consulting firm, believes: "The main reason for the lack of containers is port congestion."
Regarding when the container shortage will be resolved, Container xChange predicts: "In the next few weeks, as every link in the trans-Pacific route supply chain will face tremendous pressure, container supply will fluctuate further."
Nerijus Poskus, vice president of shipping at Flexport in the United States, believes that the shortage of containers may improve in the second half of 2021.
Lars Jensen said that the lack of containers in the Port of Los Angeles should be resolved before the summer of 2021.
He further explained: "After the international financial crisis in 2008, we also experienced a shortage of containers. The shortage of containers in 2010 took about 3 months from the appearance to the resolution. If we put it now Under the same background, it means that the current lack of containers in the Port of Los Angeles may also be resolved soon."
Container xChange said that the shortage of container equipment that has lasted for several months is expected to end because the container availability index (CAx) is undergoing positive changes.
According to Container xChange analysis, the Chinese New Year may become a turning point , with the 20-foot and 40-foot dry cargo index increasing to 0.34 and 0.37 respectively, indicating that the availability of empty containers is much higher than last month. CAx data comes from millions of containers tracked by Container xChange. Container xChange CEO Johannes Schlingmeier said: “An index of 0.5 indicates market balance, and a value below 0.5 indicates a shortage of containers.” Container xChange pointed out that although the latest data in January was well below 0.5, indicating that there is still a shortage of container equipment, but 20 feet and The 40-foot container data has begun to approach the normal container shortage level in China's main export markets.
David Amezquita, the company's director of data, said:
Compared with December 2020, the availability of 20-foot containers in January 2021 has increased by 37.5%, and the availability of 40-foot containers has increased by 200%, which is a positive trend.
Data from xChange shows that in the past few months, there has been an extreme shortage of containers across China. In Shanghai, which has always been in short supply, the index reached a record low in December 2020, of which the 40-foot container availability index was only 0.13. The company said that as China's container manufacturing plants are running at full capacity to expand production capacity, coupled with the shipping company's efforts to transport empty containers back to China, the Chinese New Year may become an important turning point.
With the substantial increase in container supply, Shanghai Port's container availability index is returning to normal levels. Other ports in China are also undergoing positive changes. Taking Qingdao Port as an example, the availability index of a 20-foot container even reached 0.5. The container availability index of other major Asian hub ports such as Singapore Port, Navassiwa Port and Port Klang also showed the same trend. Compared with December 2020, the availability index of standard containers at the Port of Singapore in January 2021 has increased by 58%, Port Nawahiwa has increased by 35%, and Port Klang has increased by 54%.
There are signs that the container availability index will remain stable in the coming weeks. Until mid-February, the availability of 20-foot boxes will stabilize at around 0.35, and the availability of 40-foot boxes will stabilize at around 0.38.
In the past two months, the cost of transporting goods from China to Europe has more than quadrupled, hitting a record high, due to the pandemic disrupting global trade and the shortage of empty containers.
Data from shippers and importers show that the freight for transporting a 40-foot container from Asia to Northern Europe has risen from approximately US$2,000 in November last year to more than US$9,000.
Lars Jensen, CEO of maritime consulting company SeaIntelligence, said that the reason for the increase in freight rates is the market's competition for limited resources-containers.
In the first half of 2020, due to a sudden slowdown in global trade due to the epidemic blockade, shipping companies have suspended large-scale shipping and thousands of empty containers are stranded in Europe and the United States. In the second half of the year, when Western countries' demand for Asian-made goods rebounded, competition among shippers for available containers pushed up freight rates.
John Butler, Chairman of the World Shipping Council, said, "The freight volume has dropped from a sharp decline to soaring to the highest level in history, and the effective handling capacity of the terminal has exceeded the upper limit."
He added that the congestion in the port has caused freight rates to rise, and shipping companies charge additional fees to compensate for the longer waiting time.
British freight forwarding company Edge Worldwide CEO Philip Edge said that some shipping companies charge US$12,000 per container, much higher than the US$2,000 in October last year.
The British Household Electrical Appliance Manufacturers Association stated in a statement, “According to member companies’ disclosures, shipping costs have increased by more than 300% since 2020. Especially for some commodities, the increase in shipping costs has exceeded the net increase Profit. Therefore, these costs will have to be passed on to the end user."
The owner of a leisure goods importer in Manchester said that the shortage of containers is having a “huge impact” on his business, and some orders placed in November are still waiting to be shipped. "The question is, is it to pay $12,000 now and pass the cost on to the customer, or to wait at the risk of exhausting inventory?"
Economists say that such interruptions and delays are beginning to affect global supply chains. Neil Shearing, chief economist at Capital Economics, said that "transportation pressure is accumulating and may increase further."
A recent survey by IHS Markit found that in December last year, the delivery time of manufacturing suppliers in the Eurozone reached the worst level since the peak of the pandemic lockdown in April. Shipping delays and general commodity shortages were "widely mentioned" by suppliers. .
The companies surveyed stated that they are consuming inventory of raw materials and semi-finished products, resulting in a decline in inventory.
Bert Colijn, senior economist at ING, said that "supply shortages and rising freight rates may slightly curb trade growth."
On the occasion of the Chinese New Year in February, the Asian manufacturing industry slowed down. Shipping companies hope to use this time to solve the problem of increasing backlog orders, which will temporarily cool freight rates.
However, BIMCO chief shipping analyst Peter Sand said that the shortage of containers may continue for a long time in 2021. Although the shipping company has ordered new containers, in his opinion, such a move is "too small and too late."
Lars Jensen also believes that although freight rates may drop slightly, "there are still a lot of goods waiting to be transported."
John Butler pointed out that only when epidemic-related restrictions are reduced and people have more diverse service choices, the pressure on the maritime supply chain can be alleviated, but no one can say when it can be improved.
The air cargo market has ushered in a new year, but there is no sign of cooling. International transportation activities usually weaken after the holiday season, but due to the unusual air transportation mode and the severe shortage of air transportation caused by the new coronavirus pandemic, demand and freight rates remain high.
The logistics company expects that the air cargo volume will not decline before the Spring Festival, because the manufacturer plans to continue operations during the traditional holidays.
The latest comprehensive statistics of World ACD and CLIVE Data Services in December show that compared with 2019, air cargo volume has fallen by only 3.7% to 5% respectively. These data show that the air cargo industry has recovered a lot since it bottomed out in May last year, when demand dropped by nearly 40%.
The demand for air transportation is largely driven by continuous inventory replenishment, the inventory-to-sales ratio of consumer goods is close to the lowest level in history, and a saturated marine container market. Analysts and logistics providers said that the congestion of ports and railways and the shortage of empty containers continue to push up shipping prices and cause serious delays, especially for main routes from Asia, which promotes a further increase in aviation demand.
The goods sought for air transportation include automotive equipment, consumer goods purchased online, and medical supplies related to COVID-19. Airplanes are also used to transport the new crown vaccine, because a large number of vaccines are transported by land, and sometimes only a few containers are needed for each flight, so it is not clear how many ordinary goods they replace. Nevertheless, when the capacity is tight, the vaccine will be given priority to board the plane.
San Francisco-based freight forwarding company Flexport said in a customer advisory update report that the remaining demand for game consoles and smartphone product releases in the fourth quarter will increase capacity constraints by mid-February.
Bruce Chan, vice president of global logistics at investment bank Stifel, said in a monthly comment that shippers are also more inclined to use air operations as an inventory buffer because their forecasting models have been completely overturned by the epidemic. He wrote: “Predicting consumption patterns and when they will stabilize is a huge fear, and the path forward is hardly linear, especially when the new coronavirus reignites and the government further implements blockades and border closures.”
In addition, many Chinese manufacturers announced that they will continue production during the Lunar New Year period from February 12 to 26. Factories are usually closed for 10 days or longer so that workers can celebrate with their families, but because the Chinese government encourages workers to celebrate the New Year on the spot, many factories will continue to operate this year. Flexport said this could create a backlog, as many freighter flights were cancelled a few weeks ago due to the expected full transport. Any backlog will depend on whether the factory continues to produce or take vacations at home.
The demand for air freight is so strong that experts predict that by the end of March the market will return to the level before the epidemic. This trend is in sharp contrast to the passenger traffic of the aviation industry, which is expected to remain sluggish until vaccination becomes more common in the second half of the year. Even then, the recovery of international travel may be slower, which means fewer aircraft for long-distance trade. Aviation industry officials said they don’t expect a full recovery until 2024.
Globally, freight rates are more than twice what they were a year ago, and freight rates from China to Europe and the United States are 2.5 times what they were a year ago. According to data from digital sales platforms, market information services and freight forwarders, the aircraft on these routes are full.
According to World ACD data, the average freight rate soared by 80% in December last year, from US$1.80 per kilogram to US$3.27 per kilogram, the highest year-on-year increase since May last year, but it fell by 10% since January this year.
Freight rates are under tremendous pressure, because although more all-cargo operators have added freighters and flights, global capacity is still about 20% lower than 2019 levels. The main culprit is the insufficient supply of wide-body passenger aircraft on international routes, most of which are still grounded due to the poor travel market. In fact, with the strict implementation of travel restrictions, airlines will reduce flights in the first quarter. For example, Air Canada and WestJet suspended 25% and 30% of their system capacity in the first quarter.
According to data from the International Civil Aviation Organization, the global all-cargo fleet increased by 22.4% to 673 aircraft in 2020. Airlines continue to increase capacity, including improved aircraft from passenger airlines, but this is not enough, because the space shortage is three to four times the decline in demand, and the gap may be even greater in the short term.
In the past month, Qatar Airways has added three Boeing 777 freighters to its fleet, and China Airlines and AirBridgeCargo have each added a factory-built aircraft. Swiss International Air Lines has added Seoul, South Korea and Lima, Peru to its cargo network. The flight from Zurich will be operated by a 777-300 extended-range passenger aircraft dedicated to cargo. The flight from Zurich will be operated by a 777-300 extended-range passenger aircraft dedicated to cargo.
In the past year, many freight forwarders have greatly increased the use of dedicated charter flights to ensure that they can provide transport capacity to their customers. German logistics giant DB Schenker significantly expanded its private aviation network last week. Now it has two routes, connecting Europe, Asia and North America for the first time. The cargo management company controls a total of 43 Boeing 747 or 777 freighter flights every week-equivalent to the space of a 135 wide-body airliner. Munich Airport is the hub for DB Schenker's intercontinental cargo between the United States and Asia.
In the second half of last year, the rapid recovery of the shipping market caused the “hard to find one container” situation to continue after the beginning of this year-empty containers are still in demand, and some people can't order containers with 10,000 US dollars. On January 8th, at the Hudong Wharf of Waigaoqiao, Shanghai Port, the terminal production has been operating at full capacity recently. In the yard, there are a large number of containers stacked, and the number of heavy containers for storing goods is much larger than the number of empty containers. The industry believes that the shortage of empty containers and the hard-to-find situation of one container will continue for some time.
Where are the empty boxes that you can't get?
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.
A British freight forwarder said, "Our customers are willing to pay such a high freight, but due to port congestion, we are still working hard to move the boxes. Some boxes have been on the dock for more than four weeks and still don’t know what Time to ship."
At the same time, 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-hundred-year problem in the history of global supply chains, and there is basically no solution in the short term. In recent weeks, some container ships sailed from Asia to Europe, but did not return in time, resulting in a serious shortage of empty containers.
A carrier source said: “Due to the insufficient number of containers in the warehouses in China, we have had to reduce the number of recent voyages.” All carriers report that their warehouses are severely lacking the most popular 40-foot tall containers and 40 Foot standard containers, most of the time, even 20 foot containers are in short supply.
The latest container availability index report from Container xChange shows that the availability of the entire China is "still at the lowest level in history." The report added: “Due to the rapid growth in demand after a few months of blank sailing, the current availability rate of 40-foot high cabinets in China is only 0.05 points, compared with 0.63 in the same period last year.” Data above 0.5 indicates surplus, and below 0.5 indicates deficit.
A British freight forwarder revealed that many ocean carriers (shipping companies) now refuse to accept their export bookings until mid-January. "Our customers are ready to pay for these crazy prices, but the ports are blocked. We are still trying to pull the boxes away. He said: “We have some boxes on the dock for more than four weeks, but we still don’t know when they can be unloaded. "
At the same time, urgently needed containers in Asia are scattered in warehouses across Europe, especially in the UK. In the UK, congested ports began to order to restrict containers from being shipped back to already overcrowded terminals.
“The epidemic situation in Europe and the United States still exists, and the labor force in the ports is definitely relatively short, and the speed of customs clearance will slow down. This will prevent the timely unloading of incoming goods and allow the containers that could be turned around to stay abroad for a long time." Yang Li, a retired freight forwarder, analyzed. In addition, since the third quarter, China's export business has increased in volume, which has also intensified the pressure on container demand.
Global container ship freight rates soared by 80%
The lack of containers in the market has led to soaring shipping rates, and the price increase of popular routes is even more exaggerated. Guo Shaohai, head of the International Freight Forwarding Company, said that the freight rate on the same route has doubled in the past six months. For foreign trade companies, production cannot be stopped. It is difficult to ship a large amount of goods with orders, and there is great financial pressure. The industry expects that the shortage of containers and space will continue.
Guo Shaohai said that on May 18, 2020, the sea freight from Shanghai to Long Beach on the West Coast of the United States was US$1,550 for a 40-foot container at that time. It was US$4,500 on January 7 this year.
Yan Xianjie, the sales manager of an international cargo company in Shanghai, said that the price of small cabinets will rise to more than US$4,000 per cabinet in the US West, and the US East small cabinets may have to rise to US$6,000 or 7,000, and there may be no space before the new year. . Prices in Europe continue to increase, and large cabinets may rise to US$9,800, and many customers do not have a cabinet for US$10,000.
The comprehensive index of China's export container freight rate is a "barometer" of price changes in the container transportation market. The latest data from the Shanghai Shipping Exchange show that on January 8, the comprehensive index of China's export container freight rate reported 1,753.85 points, a record high again. The average in May 2020 is only 837.74 points.
"Lianhe Zaobao" reported on January 8 that the COVID-19 pandemic has caused global port congestion and “unavailable containers”, which in turn pushed up ship freight rates soaring by about 80% within two months. The current increase has not faded.
According to the global container freight rate of Drewry, a shipping consulting company, the freight rate per TEU at the end of last year was US$4,359 (approximately S$5752), which is an increase of 75% from the level of approximately US$2500 in October last year. %.
Prior to this, a container shipping company pointed out that the current European route and Mediterranean route freight rates have reached a record high. Although the European route rises later than the US route, the rise is much faster than the US route. On December 11, the freight rate of the western US route was flat at 3948 US dollars/FEU, and the US eastern route was 4804 US dollars/FEU, which increased slightly by 2.2%, which was also approaching a historical high.
Since the fourth quarter of last year, the freight rate of the Far East to Europe route has soared rapidly. In the past two and a half months, it has risen by 152.39%, which is almost three times the difference from the low of US$725 in late April this year. Since September, the freight rate of the Far East to Europe route has exceeded 1,000 US dollars. Due to the difficulty of finding a container in the container shipping market, the rapid increase in the volume of Asian exports to Europe, and the congestion of British ports, the European line freight rate has begun to surge and is expected to exceed 3,000 US dollars this week. .
How to solve the problem of missing boxes
The shortage of containers and the sharp increase in freight rates have attracted the attention of market management departments. China's container production and sales account for 96% of the global market, and it has formed an industrial cluster with full product lines, full supply chains, and full technical capabilities. In this regard, Gao Feng, spokesperson of the Ministry of Commerce, stated at a press conference on December 3, 2020 that he will work with relevant departments to promote increased capacity allocation, support accelerated container return transportation, improve operational efficiency, and support container manufacturers to expand production capacity. . At the same time, it will increase the intensity of market supervision, strive to stabilize market prices, and provide logistics support for the steady development of foreign trade.
After experiencing industry losses in 2019 and a shortage of orders in the first half of 2020, container manufacturers have finally ushered in their own busy moments. According to a source from a large domestic container manufacturer, factory employees now have to trot to go to the toilet and eat lunch for only ten minutes, just to speed up the production progress. "We haven't encountered such a good market in many years. The whole industry is stepping up the production of new boxes, and orders have been scheduled until March next year." He said.
Qingdao CIMC Reefer Container Manufacturing Co., Ltd., located in the Shanghe Demonstration Zone in Jiaozhou, is rushing to make container orders in the workshop. "Starting from the third quarter of 2020, we have been running at full capacity to ensure growth and stable production." The relevant person in charge said that the company will gradually resume orders from the third quarter and make every effort to increase production and ensure supply. This trend is expected to continue until 2021 The first quarter.
However, people in the shipping industry predicted that the shortage of containers will continue until the first quarter of 2021. Therefore, there are already large domestic container companies that dare not rush to take orders for the second quarter of 2021.
Now that the market is in short supply, it is completely possible to launch capacity projects, purchase equipment, and let workers work overtime to produce, but in the long run, this will break the balance of supply and demand in the global container market.
At present, the service life of containers is 10 to 15 years. After the rapid one-time release of production capacity, what about next year or the next year? The development of the industrial chain still requires a long stream of water. Therefore, while moderately increasing production capacity, it is also necessary to work hard on container inventory.
For example, major shipping companies are currently stepping up to empty containers from Europe and the United States. In order to ship European and American empty containers back to Asia as soon as possible, some shipping companies in the European and American markets have tried not to take back the cargo, especially the goods exported from the US inland to Asia. If the US grain is exported in the peak season, the container will cost about in and out of the inland. Two weeks, and the grain is heavy cargo, which affects the loading of ships. In October 2020, the German Hapag-Lloyd shipping company (Hapag-Lloyd) publicly announced that it would suspend the shipping of US soybeans and other US agricultural products in containers.
Industry insiders also pointed out that alleviating the pain of the shortage of shipping containers must tap the potential and expand the capacity of the entire industry chain.
On the one hand, the inventory capacity encourages and supports domestic shipping companies to restore their capacity to the pre-epidemic level as quickly as possible. At the same time, they increase the supply of containers by opening overtime ships, deploying ships from other routes, and seeking charters from the market. Domestic shipping and logistics companies should actively coordinate overseas partners and overseas companies to improve the efficiency of international container turnover. Freight forwarders and shipping companies should actively communicate with them, and do a good job in peak-shift transportation planning and scientific management of space.
Not only that, it is necessary to seek a close connection between railway containers and shipping, allowing containers to circulate between continents, thereby reducing the cost of container use. At the policy level, it is possible to increase subsidies for shipping and land transportation companies for container return, and to issue port exchange coupons and merchant special coupons to export companies to help them reduce their freight burden.
In addition, commerce departments and customs should strengthen the supervision and supervision of shipping companies' freight rates, and conduct timely interviews and financial penalties for improper behaviors such as sudden price increases and arbitrarily asking prices.
Shipping Australia stated that in order to reduce the backlog of empty containers at the port, liner companies directly incurred expenses and abandoned cargo operations , indicating that liner companies have provided great support for maintaining the normal operation of the Australian supply chain.
The accumulation of empty containers has always been a problem faced by major ports in the world. In Sydney, weather and other factors have exacerbated this problem, affecting the exchange of import and export containers by liner companies. In order to alleviate this problem, liner companies are increasing the number of ships at the port and paying additional ship operations and port fees for this.
New South Wales Minister of Transport and Roads Andrew Constance noted that the number of empty containers exported recently reached a record level . More than 78,000 empty containers were exported in October 2020, and more than 75,000 empty containers were exported in November. The average export volume of empty containers in the first 12 months was about 64,000.
In order to reduce the accumulation of empty containers at the port, the liner company was forced to reduce the export of heavy containers:
●At present, a liner company has successfully reduced its empty container inventory from 13,000 TEU to 5,000 TEU;
● Another liner company reduced its empty container inventory from 25,000 TEU to 16,000 TEU;
●Some companies have completely emptied the empty container inventory in New South Wales;
●A ship on the route from Northeast Asia to New Zealand has been transferred to Sydney Harbour to deliver empty containers;
●The two ships will cross Melbourne and stop at Sydney and Brisbane only to transport empty containers;
●A ship normally deployed on the Singapore-Fremantle route will stop service and transfer to the Singapore-Sydney-Singapore route to load empty containers. The ship has already picked up empty containers twice before;
●A liner company deploys two ships specifically for transporting empty containers during the peak season-one with a capacity of about 2200TEU and the other with a capacity of about 2800TEU;
● Another liner company has transported more than 12,000 FEU and more than 9,000 TEU. This company also temporarily deployed a ship to load 2,114 empty containers;
●In November last year, a liner company dispatched an empty ship to transport 1,384 empty containers, and it took 7 days to wait for the berth. Public data shows that in late November, the rent of a 2500TEU container ship was $15,500/day, and the rental price of 8,500TEU was $36,000/day, in addition to other costs such as crew wages and fuel.
In order to alleviate Australia's logistics supply chain difficulties, liner companies have undertaken a heavy financial burden . For example, the round-trip journey from Singapore to Sydney exceeds 9,500 nautical miles, and it takes at least 16 days to travel at a speed of 24 knots per hour (not including port time). Including crew wages, fuel costs, insurance fees, lubricating oil fees, storage fees, crew replenishment, chartering fees, tugboat fees, pilotage fees, mooring fees, port fees, etc., a 4250TEU ship needs 150 per voyage. Ten thousand Australian dollars. And this voyage loaded all empty containers, without any freight income.
According to the Shanghai Export Container Freight Index, the current freight rate of the Singapore-Fremantle route is US$2,431/TEU. It is roughly estimated that the opportunity cost of this voyage exceeds US$10 million.
There is no doubt that in order to reduce the accumulation of empty containers, these liner companies are paying a lot of money and giving up a lot of freight revenue. Faced with unprecedented demand growth, liner companies are doing their best to relieve the backlog of empty containers to ensure the normal flow of international shipping containers in the supply chain. At present, the accumulation of empty containers at the port is improving.
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.
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.
