/ By tjchinafreight ivy / FBA

What is the difference between overseas warehouse and FBA?

  • FBA, or Fulfillment by Amazon, means that sellers send products sold on Amazon directly to local warehouses. When a customer places an order, the Amazon system automatically completes the delivery.
  • Overseas warehouses refer to storage facilities established overseas. Cross-border e-commerce enterprises export goods to overseas warehouses in batches according to general trade methods. Once the order is placed, the item is delivered to the consumer.

Advantages of overseas warehouses

Faster delivery. It effectively reduces order response time by 50-70% compared to shipping from China. Additionally, it improves user experience and greatly reduces product turnaround time.

Reduce logistics costs. Through centralized delivery to overseas warehouses, local express delivery in the United States can reduce delivery costs by 30-50%.

FBA inventory adjustment is easy. For sellers, the overseas warehouse is the buffer warehouse of Amazon FBA, which is convenient and flexible to adjust the FBA inventory.

Disadvantages of overseas warehouses

Pay storage fees. The use of overseas warehouses requires payment of a certain fee, which is generally charged on a daily basis. And the cost of warehousing in different countries is also different, and sellers need to calculate the cost by themselves.

In stock. The premise of entering overseas warehouses is that sellers need to have a certain amount of inventory, which means that they need to stock up in advance, which will bring the risk of slow sales. And not suitable for sellers who sell special customized products.

Cash flow is inconvenient. Due to the large amount of stocking to overseas warehouses, the capital investment in stocking, logistics, warehousing, etc. is large, which can easily lead to a breakdown in the capital chain.

Sellers have high requirements for warehouse management data monitoring. Sellers need to monitor the detailed data of incoming and outgoing shipments, as well as putting on and off the shelves, otherwise it will easily lead to loss of goods or data mismatch. Some Amazon sellers responded that the inventory quantity did not match the actual number of products sold. Since Amazon has a complete warehouse management system, third-party overseas warehouses cannot guarantee that there will be no problems.

In essence, there is no difference between overseas warehouses and FBA. Both provide sellers with comprehensive warehousing and fulfillment services. However, there are obvious differences between the two in terms of service content and form.

1. The difference between service providers: FBA is Amazon's official warehouse distribution service, and after-sales service is provided by Amazon; overseas warehouses are provided by third-party service providers, responsible for the warehousing and distribution of sellers' products.

2. Different service forms. Once the seller has sent the goods to FBA, there is no need to deal with shipping related issues. The whole process from sorting to shipping is completed by FBA. The overseas warehouse is divided into two parts, first sorting and packaging in the warehouse, and then entrusting the local express company to complete the delivery service.

3. The service content is different. The service content of FBA is relatively simple, that is, it simply helps sellers deliver goods. The service content of overseas warehouses is more abundant. In addition to basic warehouse distribution, it also provides related services such as labeling and labeling, single-piece delivery, transit replenishment, quality inspection, and front-end logistics. For example, worry-free overseas warehouses can also realize customized services according to customer requirements.

4. Overall price difference. Combining all services, FBA is more expensive, while the overall cost-effectiveness of overseas warehouses is higher.

Other differences

Choose:

Amazon FBA warehouse has certain restrictions on the size, weight and category of products, so the choice is biased towards small, high and high-quality products

DH overseas warehouses have a wider range of choices than FBA warehouses.

Product:

FBA does not provide assembly services, and requires sellers to affix the outer box label and product label before entering the warehouse. If the product label is found to be damaged, it will be returned for repair.

DH overseas warehouses will provide sorting and assembly services before products are put on the shelves.

/ By tjchinafreight ivy / Shipping

Risks and strategies of cross-border e-commerce going overseas to Japan under RCEP

On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) came into effect, marking the official launch of a free trade zone with the largest population, largest economic and trade scale, and great development potential in the world. It is worth noting that RCEP brings the two major economies of China and Japan into the same free trade framework for the first time, which will greatly promote the development of trade in goods between the two countries and affect the layout of industries and supply chains.
For cross-border e-commerce going overseas, the official entry into force of RCEP has further opened up the Japanese e-commerce market and pushed it into a new stage of development. However, the Japanese e-commerce market has limitations, and under the background of RCEP, my country's cross-border e-commerce will face a series of challenges such as customs, taxation, and personal information protection. solved problem.

Potential compliance risks of cross-border e-commerce going to Japan

Tax risk
The target markets of cross-border e-commerce companies going overseas include mature markets such as Europe, America, Japan and South Korea, as well as developing markets such as Southeast Asia. The tax systems of different countries are different, and they are constantly being updated and improved, which is different from the clear tax policy in China. Enterprises may lack understanding of the tax policy of the export destination, or there may be deviations in their understanding, which poses tax compliance challenges for cross-border e-commerce enterprises going overseas. In the process of cross-border e-commerce enterprises going overseas, tax compliance optimization is one of the things that cannot be avoided and need to be solved urgently.
From April 2020, the Japanese Customs announced that it will start to implement the reverse calculation method to levy tariffs on goods exported to Japan, which is usually called the "inverse algorithm". , not according to the amount declared by the importer, but the selling price through the seller's sales link, minus the various costs of the platform, and the import declaration price is verified by the Japanese customs. When the judgment is correct, the customer has the right to request the customer to revise the declared amount according to the reverse algorithm to pay tax. The original intention of adopting the inverse algorithm is to repair the existing tax loopholes, and its essence is to adjust the time node and verification method of tax collection.
In order to evade the inverse algorithm, some companies have adopted some illegal means, such as increasing the link price after customs clearance, and using other people's links to ship products on their behalf. However, the Japanese customs has a very high level of inspection of goods. If a false declaration is found by the customs, in addition to the conventional tax payment and delay in customs clearance, it will also increase the storage fee for the backlog of goods at the customs, resulting in longer logistics time for goods transportation. , bringing a burden to logistics costs, which in turn affects sales and reputation. Tax compliance is the general trend. Enterprises should abide by relevant overseas laws and regulations, abide by platform policies, and operate in compliance.

Customs clearance risk
Cross-border e-commerce has the advantages of online marketing, online transactions, and contactless delivery. Transaction information can cross the border through the Internet, but the physical goods that need to be delivered need to be inspected and supervised by the customs during transportation. If the goods are in violation of regulations, they cannot be Passed customs inspection smoothly. The customs clearance risks faced by cross-border e-commerce companies in export trade mainly come from the customs regulations of the buyer's location. On the other hand, it may be out of the seller's luck that they take risks in order to obtain profits, make false reports, and fail to report the information of export commodities truthfully, resulting in a series of complex customs clearance risks.\

Information Protection Risk
The protection of online personal information in the RCEP e-commerce rules mainly relies on the domestic legal framework of the contracting parties. In fact, there are differences in the personal information protection policies of RCEP parties, as well as differences in the handling of personal sensitive information and non-personal sensitive information. Cross-border e-commerce companies may collect excessive information without understanding local regulations or Improper handling of information, thereby causing cross-border e-commerce companies to have the risk of violations when collecting and using data containing personal information. Japan attaches great importance to the protection of personal information. As early as 2003, the Japanese National Assembly passed the "Personal Information Protection Law". Regardless of whether the personal information processor is a domestic company or a foreign company, as long as the personal information is obtained when providing goods or services, it will be Subject to Japan's "Personal Information Protection Law", those who violate the law will face severe penalties.

RCEP has a wide range of content and detailed terms, and at the same time pays great attention to consumer rights, data security and personal information security. In addition, Japan's strict supervision of customs, taxation and personal information poses challenges to the compliant operation of cross-border e-commerce enterprises in my country. my country and Japan are very different in terms of economy, cultural customs, etc., and the compliance risk of overseas enterprises has suddenly increased. It is suggested that cross-border e-commerce enterprises should speed up their transformation, explore localized business models, speed up the layout of overseas warehouses, improve their awareness of risk prevention, and formulate targeted compliance business strategies, so as to seize the opportunities brought by RCEP and promote the health of cross-border e-commerce. developing.

/ By tjchinafreight ivy / Shipping

How to deal with the problem of overweight containers?

There is information on the maximum weight limit on the unpacking door of each container, such as MAX GROSS: 30480KGS. This means that your box with the goods cannot exceed this weight. Tare weight--20GP: 2200KGS, 40: 3.720-4200KGS, some HQ will have MAX GROSS: 32000KGS.
This is the maximum strength that the container body can withstand. If the loading exceeds this limit, the container body may be deformed, the bottom plate will fall off, and the top beam will be bent. All the resulting losses will be fully borne by the loader. At present, most professional container terminals in China have installed automatic weighbridges. Therefore, as long as the container exceeds the weight limit of the container, the terminal will refuse to accept the container. Therefore, it is recommended that you clearly see the weight limit on the container body before packing, so as to avoid unnecessary repacking operations.

Overweight containers are a very serious problem. As container vessels become larger and containers are stacked higher to keep up with the growth of world trade, overweight containers can:

Wrong ship stowage decision
Restocking the container (and resulting delays and costs) if overweight is determined
folded container stack
Containers lost in water (overweight and
overweight container)
Cargo Liability Claims
Chassis damage
ship damage
Vessel stability and stress risk
Risk of personal injury or death to seafarers and shore workers
Service plan integrity compromised
Correctly declare supply chain service delays for container shippers
Confirmed, booked and available loads are closed at the last minute when the actual weight on board exceeds the declared weight and the total cargo weight exceeds the ship limit or port draft limit.
Loss of revenue and earnings
Liability for overweight accidents and fines on the road, and the resulting time and administrative effort and costs to seek compensation from responsible parties
Impairs the optimum trim and draft of the vessel, resulting in compromised vessel efficiency, suboptimal fuel usage and increased vessel exhaust emissions.

What should I do if I am overweight?
This is mainly divided into overweight port area, overweight shipping company, overweight port of destination

1. The shipping company is overweight
Discuss with the shipowner, make up the overweight fee, and the rest will go as normal;

2. The port area has its own regulations for overweight
If you find that you are overweight when entering the port, you need to negotiate with the port area and pay the overweight fee plus manual handling fee or take out the box and repack it;

3. The destination port is overweight
Generally, if the destination port is overweight within a certain range, the fine can be solved; if the overweight is serious, the cranes along the way cannot be loaded and can only be transferred to a nearby port or returned to the original road.

/ By tjchinafreight ivy / Shipping

Introduction to container freight terminology, freight forwarding and foreign trade notices

Container

A sea container (also known as a container, freight container, intermodal container, ISO container, hi-cube container, box, conex case, and sea tank) is a steel container that can be moved repeatedly within a product for safe and efficient movement Use an intermodal freight system.
Container shipping comes in many different sizes and options, including specialty options such as hanging garment containers, half-height containers, bulk shift containers and tanks. While these all have their uses, they are very niche.

Container leasing
The container leasing market has been fast-growing over the years. Today, around 55 % of the global container fleet is owned by leasing companies. Making container leasing a force to be reckoned with.
Are you considering leasing containers instead of buying? In that case, keep reading. We’ll tell you all you need to know about the different types of container leasing. As well as weigh the pros and cons of buying containers vs leasing them.

Container terminal
In container transportation, the specific handling department for the exchange and storage of boxes or cargoes. It authorizes the carrier or its agent to carry out the following business:
(1) Exchange and storage of FCL shipments.
(2) Those who have a container freight station shall handle the handover of LCL goods.
(3) Arranging the berthing of container ships, loading and unloading containers, and preparing stowage plans for each voyage.
(4) Handle the compilation and signature of relevant shipping documents.
(5) Prepare and sign the relevant documents for the entry, exit and circulation of the container using the means of transport.
(6) Handle the inspection and maintenance of containers, vehicles, loading and unloading tools, as well as cleaning and fumigation of empty containers.
(7) Send and receive, store and keep empty boxes.
(8) Arrange the stacking of empty boxes and heavy boxes in the yard, and prepare a site allocation plan.
(9) Other related business work. Container loading and unloading areas are generally composed of dedicated docks, frontiers, yards, freight stations, command towers, repair departments, gates and offices. Sometimes the storage yard or freight station can be extended to the transfer station of 5~15 kilometers in the urban area.

Container front yard (marshalling yard)
In front of the container terminal, in order to speed up the loading and unloading of ships, the container is temporarily stacked. Its function is: before the container ship arrives at the port, the export containers are neatly stacked in a planned and orderly manner according to the stowage requirements, and the imported containers are temporarily stacked in front of the wharf during unloading to speed up the loading and unloading operations of the ship.

sea freight

Container yard
A place where heavy or empty containers are handed over, kept and stacked. In some countries, container yards are not divided into front yards or rear yards, which are collectively referred to as yards. The container rear yard is an integral part of the container handling area. It is the place where the FCL of the container transportation "on-site" handover method is handed over (actually, the handover is carried out at the "gateway" of the container unloading area).

Empty container yard (van pool)
A site dedicated to the collection, storage, storage or handover of empty containers. It is specially set up when the container handling area or the transfer station yard is insufficient. This kind of yard does not handle heavy box or cargo handover. It can be operated independently, or it can be set up outside the area by the container handling area. Some capitalist countries, operating such empty container yards, must declare to the shipping association.

Container freight station
The place where the ship and cargo parties handle the handover for the packing and unpacking of the LCL cargo. The carrier can only entrust the operator of one container freight station in a port or inland city. It handles the following main business on behalf of the carrier:
(1) Tally and handover of LCL cargo.
(2) If there is any abnormality in the inspection of the appearance of the goods, an annotation shall be processed.
(3) The stowage and packing of the LCL cargo.
(4) Unpacking and storage of imported unpacked goods.
(5) Seal and issue a station receipt on behalf of the carrier.
(6) Handle various documents and preparations.

The maximum compensation amount that the carrier should bear in the event of cargo damage during container transportation. Limitation of liability for LCL shipments is the same as for conventional shipments. Compensation for FCL is based on some current international precedents. If the number of pieces of goods in the box is not listed on the bill of lading, each box is used as a claim calculation unit. If the number of pieces in the box is listed on the bill of lading, it is still calculated according to the number of pieces. If the damage and loss of the goods are not carried out by sea, but occurred during inland transportation, the maximum compensation amount for land transportation shall be handled. If the container is owned or provided by the shipper, in the event of loss or damage, the responsibility for the loss or damage is indeed the responsibility of the carrier, and it should also be regarded as a claim calculation unit.

/ By tjchinafreight ivy / Shipping

Japan sanctioned Russia: 19 shipping companies were blacklisted!

As the Russian-Ukrainian conflict continued, many countries imposed international sanctions on Russia and Crimea during the Russian-Ukrainian war. The Japanese government also decided to expand sanctions against Russia and included a number of Russian shipping companies on the list of prohibited exports. The purpose is to harmonize with Europe and the United States, and strike at Russia's shipbuilding and military fields.

According to the announcement of the Japanese Ministry of Foreign Affairs, the sanctioned Russian shipping companies include:

Amur Shipbuilding,
AO Center of Shipbuilding and Ship Repairing,
Dalzavod Ship-Repair Center,
JSC Shipyard Vympel,
Nerpa Shipyard,
Novorossiysk Shipyard,
Rybinsk Shipyard Engineering,
Severnaya Verf Shipbuilding Factory,
Ship Maintenance Center Zvezdochka;
And the 35th shipyard belonging to the Russian United Shipbuilding Group (USC),
Astrakhan Shipyard,
Aysberg Central Design Building,
Baltic Shipbuilding Factory,
Krasnoye Sormovo Plant OJSC,
Zvyozdochka,
Pribaltic Shipbuilding Factory,
Onega Scientific Research Design and Technology Bureau and Sredne-Nevsky Shipyard;
In addition there is the Yaroslavl Shipbuilding Factory.

On March 25, the Japanese Ministry of Foreign Affairs announced that, as additional sanctions against Russia, it would freeze the personal assets of 25 Russians and ban exports to 81 entities. If the previously announced 49 entities are added, the total export ban will increase to 130 entities. The new sanctions also include a ban on the export of luxury goods to Russia.

/ By TJ China Freight / Shipping

freight volume will continue to remain high

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?"

 

NRF predicts that freight volume will continue to remain high; Clarkson: trade volume will exceed 2019

 

 

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.

 

NRF predicts that freight volume will continue to remain high; Clarkson: trade volume will exceed 2019
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."

 

NRF predicts that freight volume will continue to remain high; Clarkson: trade volume will exceed 2019

 

 

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.

/ By TJ China Freight / Shipping

The Port of Los Angeles is also missing container!

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.

 

The Port of Los Angeles is also missing boxes!

 

 

 

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.

 

The Port of Los Angeles is also missing boxes!

 

 

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."

/ By TJ China Freight / Shipping

Refuse to load goods! The shipping company is shipping the empty containers back to China… The problem of missing containers is solved!

In recent days, the shipping industry has been in a panic due to the shortage of containers, and ocean freight has soared abnormally, which has affected the supply chain of the manufacturing industry.

However, currently, according to an indicator that tracks global shipping containers, the global shipping shortage seems to be showing signs of easing.

 

Refuse to load goods! The shipping company is shipping the empty containers back to China... The problem of missing containers is solved!

 

The "Available Container Index" developed by the online platform Container xChange shows that this index can be maintained between 0.35 and 0.38 until the Chinese New Year in mid-February.

This index: if it falls at 0.5, it means that the supply and demand of containers is in balance; if it is lower than 0.5, it means that the supply of containers is in short supply; if it is higher than 0.5, it means that the supply is oversupply.

When the shortage of containers was the most serious last month, the index fell to an ultra-low level of 0.06 to 0.13 depending on the size of the container, and the index began to rebound this month.

It is reported that the imbalance of container shortages in 2020 will be particularly serious in Shanghai. As the Chinese factories resumed production after the epidemic eased, the demand for goods exported to the United States surged, but no empty containers were found to deliver goods out of the port.

But Container xChange said that the situation is now moving towards a normal level .

"One of the main reasons for the improvement in the imbalance between supply and demand is that the shipping industry has made every effort to transport a large number of empty containers from the world's major congested ports back to China. The Lunar New Year may become a turning point for the lack of containers. The Lunar New Year holiday starts on February 11. "

 

Refuse to load goods! The shipping company is shipping the empty containers back to China... The problem of missing containers is solved!
Port of Los Angeles, USA

According to media reports, at present, many shipping companies are eager to ship empty containers back to China from the Port of Los Angeles in the United States and refuse to carry American goods. This has largely alleviated the current shortage of containers, but it has caused the export of American agricultural products to suffer.

For this reason, the US Federal Maritime Commission (FMC) has stated that it will investigate shipping companies' refusal to load American agricultural products and transport empty containers to them. If the investigation is unreasonable, it will impose a fine.

US financial website CNBC reported that from October to November last year, it was the peak season for American agricultural products exports. Shipping companies refused to carry hundreds of millions of dollars worth of American agricultural products exports, and would rather take the time to ship empty containers back to mainland China ports to load profits. Higher Chinese export products.

So FMC launched an investigation and reviewed data from several key ports in California, New York, and New Jersey to find out whether the shipping company’s refusal to carry violated the Maritime Act.

Refuse to load goods! The shipping company is shipping the empty containers back to China... The problem of missing containers is solved!

 

According to FMC's survey, data from the Port of Los Angeles, the Port of Long Beach, New York and the Port of New Jersey, in October and November last year, it is estimated that as many as 178,000 standard containers were rejected. CNBC estimated the value of the affected agricultural products based on the export price of each TEU soybean/oil seed/grain item on the U.S. Bureau of Statistics website in the Port of Los Angeles.

However, industry insiders said that although shipping companies’ refusal to carry US agricultural products has caused losses to US exports, it has indeed alleviated the shortage of containers in global shipping to a certain extent in the near future, which is expected to be alleviated in the Lunar New Year.

/ By TJ China Freight / Shipping

Container shortage or turning point

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.

Container shortage or turning point

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.

/ By TJ China Freight / Shipping

“When the pressure on the maritime supply chain can be eased, no one can say”

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.

 

 

"When the pressure on the maritime supply chain can be eased, no one can say"

 

 

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. .

 

 

"When the pressure on the maritime supply chain can be eased, no one can say"

 

 

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.