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.
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.
In recent months, the number of ships going to the Port of Los Angeles and Long Beach has almost doubled, and the nearby seas have been heavily congested, causing extensive delays in routes north of the United States and even affecting the throughput of the Port of Oakland. The Marine Exchange of Southern California in Los Angeles confirmed the incident. According to statistics, 52 container ships entered and exited the San Pedro Bay port on Monday alone, and the daily average for the year was 24 ships, even more exaggerated is that the number of berthed ships reached 23 ships, and the daily average is only one.
The rapid increase in the number of trans-Pacific freighters has boosted the throughput data of California container ports. According to statistics, the container throughput of the Port of Los Angeles and Long Beach in November showed double-digit growth-the container throughput of the Port of Los Angeles in November Soared to 889,746 TEU, an increase of 22% over the same period last year. Officials from the local port and shipping authority stated that there has been an unprecedented surge in freight volume under the influence of factors such as the increase in consumers at the end of the year, the approaching holidays such as Christmas and New Year, and the inventory of various units.
The gap between imports and exports across the United States has widened again, and the rate of empty containers in ports has skyrocketed
Gene Seroka, Executive Director of the Port of Los Angeles, said at a news conference on Wednesday, “After nearly 11 months of year-on-year decline in freight volume, we have now ushered in 4 consecutive months of year-on-year growth. In the past month, our monthly average throughput reached 930,000 TEUs. But related to this, our export volume was affected by many factors-mainly due to the continuing trade tensions with China and the continued appreciation of the U.S. dollar. The volume dropped by 5.5% compared to the same period last year, and it was down nearly 15% for the whole year. Fully loaded containers were even shipped back to Asia empty after being unloaded at our port. This month, the number of empty containers was as high as 294,000 TEUs. This was an increase of nearly 35% in the same period last year."
The Port of Long Beach also stated in a press release that November was the best November on record, and that this was the result of the holiday retail boom and the surge in delivery of medical protective equipment-the Port of Long Beach in November The container throughput was 783,523 TEUs, an increase of 30.6% over the same period last year. The situation at the Port of Long Beach is entirely related to the surge in imports. Imports increased by 30.5%, soaring to 382,677 TEUs; but exports fell 5.2% to 117,283 TEUs-like the Port of Los Angeles, the empty container rate increased by 55% to 283,563 TEUs Standard box.
Mario Cordero, Executive Director of the Port of Long Beach, said: "As consumers choose to live at home this year, online shopping and purchases of medical protective equipment have gradually increased. However, as a new round of new crown pneumonia epidemic is still spreading across the country, The overall economic outlook is uncertain."
This is the highest port import volume that U.S. ports have encountered in the past decade
Some analysts believe that due to the restrictions of the new crown pneumonia epidemic, consumers are unable to spend money on services and start to spend money on goods, resulting in this unexpected growth, and the new crown epidemic has also contributed to the prosperity of container ports (at least Is temporary).
Excessive accumulation of goods has become a problem that more and more container ports are facing. MarineTraffic AIS (Ship Positioning) data shows that an average of more than 20 container ships are waiting in Los Angeles and San Pedro Bay in Long Beach every day. This is the same as the number of ships at anchorage last week.
Source: Marine Traffic
John McCown, the founder of Blue Alpha Capital, said that this seemed unimaginable when the new crown epidemic began. He added: "Considering the possible increase in December 2020, the annual increase will be around 1.5%, which will reverse the slight decline of 0.9% in 2019.
McCown pointed out that there were several industries where imports surged in November. Imports of furniture, sporting goods and toys increased by 55%. In October and September, they increased by 52% and 41%, respectively. "The lifestyle at home has driven the sales of a range of consumer products." He added that the surge in demand is partly due to consumers' redistribution of spending that is usually used for vacations, dining out and entertainment.
According to data from Blue Alpha Capital, despite the positive import data, US exports in November fell by 4.2%, the ninth consecutive month of decline, further exacerbating trade imbalances, and the import load ratio of each export reached 2.32, which is close to the historical record. .
McCown said: "The latest data seems to confirm that the impact of the trade war on our container exports is greater than the impact on our container imports."
Facing the soaring imports from the west coast, the port of Auckland in the north is not so lucky
Unlike the Ports of Long Beach and Los Angeles on the west coast, the Port of Oakland in the north increased its throughput by less than 1% year-on-year in November and its export volume fell by 2.6%. In November, the total imported container volume was 78,045 TEUs.
Officials at the Port of Oakland said that despite the strong import demand from the United States, the import volume of our port is far from reaching the expected value. The official quoted reports from local maritime experts as saying that it is precisely because of large batches of imported goods across the United States that disrupted the normal freight arrangements at ports, causing large-scale delays in the delivery of goods at many ports. What needs to be pointed out is that the increased accumulation of imported cargo in Southern California ports has caused ship delays, and many ships originally scheduled to call at the Port of Oakland have been forced to change their routes or directly cancel their call arrangements.
The director of the Port of Oakland, Bryan Brandes, declared that everyone does not need to be so pessimistic. “The cargo that should come to our port will still come, at most a while later (Thecargo is there, it's just delayed).” He expects to wait until December for a certain amount of cargo. Will grow.
However, Brandes also acknowledged that the increase in the number of incoming ships on the west coast has had a butterfly effect on the Port of Oakland. "Most of the cargo east of the trans-Pacific route is the Los Angeles route directly, and then some of it will go north to and from the Port of Oakland. So once the Port of Los Angeles produces Because of the delay, we will have a little impact here more or less."
U.S. agricultural exports have been affected by the chain, and this new year may not have been easy
The Port of Oakland is an export gateway favored by agricultural producers in central California, and it is now being hit by disruptions in the supply chain. As the Spring Festival approaches, exporters of agricultural products in many places, including California, said that due to shipping delays, their export business has been affected on a large scale-especially almond and walnut exporters, whose export peaks are at the end of each year.
Ed DeNike, President of SSA Terminals, said: "The biggest problem is due to traffic congestion in Southern California. Freight ships have not left Southern California. The arrival of the ships at the Port of Oakland may be delayed for at least one week."
Peter Schneider, vice president of freight company TGS Logistics, said that the butterfly effect of port congestion on the inland supply chain is getting worse. TGS now has to double the capacity of their container warehouse in Auckland. Because of the delay in the arrival of the ship, the shipping company will either refuse to accept all the exported goods or change the date of receiving the exported goods. This has caused exporters’ services to overseas buyers. Had a great impact.
my country's port containers are "difficult to find"
On the one hand, U.S. agricultural product exporters were delayed due to ship delays, and on the other hand, Chinese product exports were restricted by the shortage of containers.
According to economic data released by my country, China set a new record of trade surplus in November-US$75.4 billion, and exports increased by 21.1% year-on-year. Among them, exports to the United States led the growth and hit a record high. Analysts pointed out that the surge in trade imports to China is contrary to the expectations of U.S. bipartisan politicians. Although the Trump administration has imposed various restrictions on Chinese goods, there are few signs that the global supply chain will move closer to the U.S. On the contrary, the long-term impact of the epidemic on the United States seems to strengthen the position of China's manufacturing industry.
According to port carriers, due to the heavy congestion of major ports in the United Kingdom and the United States, a large number of containers have been stranded in these ports, which has affected global container turnover. The shortage of empty containers in Asian ports is so serious that carriers sometimes cannot guarantee Loading cargo at Asian loading ports.
Although carriers have made every effort to send empty containers from the United States to Asia-these measures even include "self-harm" measures such as drastically reducing the free container period, they still cannot change the reality of a serious shortage of containers in Asia, especially in China The ports of Xiamen, Ningbo and Shanghai, so that some ships cannot leave Asia with full load.
Small containers are becoming a key factor affecting the global trade industry chain.
At the moment, in the field of foreign trade, it has become a consensus that “the one who gets the container gets the world”, and the lack of containers has become a hurdle in the international logistics chain. It can be said that I am in a hurry here, and you are looking forward to it.
Since July this year, China’s export volume has risen sharply, and both the shipping market and the China-Europe freight train market have seen shortages of containers, soaring freight rates, and delayed turnover.
Statistics from the China Container Association show that China’s export containers are mainly satisfied in two ways: unloading old containers after unloading at ports, and new containers made by Chinese container manufacturers.
At present, my country can only return one for every 3.5 containers exported. A large number of empty containers are backlogged in the United States, Europe and Australia, and there is a shortage of containers in Asia.
Containers that are usually returned within 60 days are now delayed to 100 days, and the cost of renting containers has also increased by about 150%.
Zhang Jun, deputy general manager of Qingdao Port QQCT, said:
Under normal circumstances, if 1,000 containers are needed in the current period, there will usually be 1,200 to 1,300 containers waiting at the port. However, when containers are now in short supply, there may be only 800 to 900 containers at the terminal.
Nowadays, in addition to the hard to find a box, there is also a "hard to get a cabin."
The lack of shipping company capacity is the beginning of the nightmare of freight forwarders.
After the suspension, in addition to high freight rates, freight forwarders are faced with the realistic challenge of "bursting cabins".
The relationship with the shipping company is the "most familiar stranger", and the freight forwarder who can't pay the high price can't book the space at all, and the long-term customer's cargo cannot enter the port and board the ship on time.
After the "explosive cabin", due to insufficient space, the shipping company will detain many of the space booked by the freight forwarder on the next flight in order to maximize the benefits. You know, "drop the container".
For large freight forwarders, the losses caused by dumping containers may still be within the tolerable range.
For those small and medium freight forwarders who rely on a few large customers themselves, the disadvantage of insufficient competitiveness in this case may directly lead to their fall.
As the "middleman" between the customer and the shipping company, the explosion of warehouses at the end of the year made the freight forwarding "messy in the cold wind" gradually.
The freight forwarding industry is already facing a situation where the strong will remain strong and the weak will remain weak.
However, freight forwarders serving some special categories will be in a better position because they have their own unique competitive advantages.
On the 17th, Hapag-Lloyd's official website issued an announcement that due to continuous unforeseen operational challenges, it is still facing extremely tight equipment.
Hapag-Lloyd supports all confirmed bookings, but it does not rule out the possibility of cancellation.
At the moment it can be said that: I grabbed the space and lacked the box; I grabbed the box and lacked the space; I grabbed the box and the space , but the freight rate has risen again.······
The latest report released by the shipping consulting agency Sea Intelligence shows that the shortage of empty containers in Asian ports will continue this year, at least until January next year.
The biggest problem facing the container shipping industry is that some key regions, especially Asia, are facing a serious shortage of empty containers.
The short interest of empty containers is also the main reason that pushes the spot container freight market to historical highs, and it is also the main reason why shippers who want to be able to ship their products in time are very annoyed.
Some reports pointed out that due to the shortage of empty containers, the current impact on domestic exports has emerged.
Investment securities noted in exports , China's exports of most goods were transported by sea containers . The greater the export freight volume, the greater the demand for containers and the higher the freight rate. The freight rate index is consistent with the export year-on-year trend.
This year, SCFI began to increase prices at the end of May, matching the time when the European and American economies were unblocked. That is, the demand for Chinese goods increased after overseas unblocking, corresponding to the positive export growth rate from June; and the SCFI price increase has accelerated significantly. At the beginning of November, the export growth rate in November increased by 9.7 percentage points to 21.1%. From this perspective, based on SCFI's repeated record highs since December, exports remain strong in the short term.
On the supply side , under the high trade surplus, empty containers have been left without return, which has exacerbated the shortage of containers.
The China Container Industry Association stated that the average turnaround time of containers in China has jumped from 60 days to 100 days due to the reduction of capacity in the United States and Europe due to the virus, which has exacerbated the shortage of containers in China .
Some US importers have stated that they cannot receive the goods on time during the November-December shopping season. This will result in companies unable to deliver enough goods to meet consumer demand during local holidays.
Faced with this important problem of serious shortage of containers, I believe that the highest priority for everyone in the industry (consolidation industry, foreign trade industry) must be: when can the problem of container equipment shortage be solved?
In the latest market report, the shipping consulting agency Sea Intelligence modeled the overall state of the market based on advanced regional data. Through the estimation of the global container pool and global shipments, the base time required for a container to be loaded in Asia, complete its voyage, and to be loaded again in Asia is determined. Then, use Container Trade Statistics (CTS) demand data and Asia's potential empty container buffer inventory to supplement the explanation, and finally achieve the purpose of calculating the availability of empty containers in Asia.
By simulating 4 different strategies for the carrier (shipping company, etc.) to potentially solve the shortage of empty containers:
(1) Do not take any measures against the shortage of empty containers;
(2) Actively relocate empty containers on routes exported to Asia;
(3) Inject new containers to reduce the current burden;
(4) Operators actively take measures to reposition the containers and inject new containers.
The figure above outlines these strategies and their resulting impact on the availability of empty containers in Asia.
Given the above data model, SeaIntelligence pointed out that the only possible solution to this problem in January is when the shipping company has to purchase new containers and actively reschedule the return of empty containers . In fact, major shipping companies are also actively pursuing and attempting to implement strategies.
However, Sea Intelligence stated that this strategy will also cause serious problems for return shippers.
The market is therefore faced with a severe choice-either the carrier pursues the current strategy to achieve the goal of solving the container shortage in January next year, or the shipping company reduces their aggressive container repositioning strategy for the benefit of return shippers. But the result will be that the shortage of empty space will last at least until February next year, or even longer.
Shipping companies suspend bookings for Asia-Europe heading
With the lack of empty containers, shipping companies also feel that they have more than enough energy. Some shipping companies have to reduce or suspend bookings for a period of time in the future.
Not long ago, CMA CGM, the world’s fourth-largest container shipping company, announced that it would stop accepting bookings from Asia to Europe in the next three weeks. Specifically, the company temporarily suspended the 49th, 50th and 51st week of this year’s Asia-Northern Europe route. Booking.
Then, according to the Danish shipping media shippingwatch, Maersk and ONE also said recently that they had to refuse some inquiries.
The world’s largest shipping company Maersk stated in a written reply to the media, “The current situation in Asia is very tense. Due to the large backlog of containers, we have reduced the short-term cargo orders in the last few weeks of December to a minimum, and Several voyages had to be stopped (reservations accepted)."
Singapore-based ONE Shipping said that the current industry is developing very fast, and the company is no longer able to accept goods transferred from other container companies.
In reply to the shipping company, the company wrote: "It is impossible to accept new transfers from other shipping companies, but we can basically meet the needs of existing customers without any substantial cancellation of bookings."
At present, many Asian ports are facing a serious shortage of containers. Most of the containers are stranded in destination ports in Europe and the United States, making it difficult to return as soon as possible. In the limited number of return containers, new problems have emerged.
South Korea’s Busan Port Authority (BPA) recently stated that empty containers returned to the port from overseas have not been cleaned and inspected as they should .
In response, local truck drivers complained that the shipping company neglected the inspection, cleaning and maintenance of the containers, and instead shifted the responsibility of maintaining the containers to them.
It is understood that from November 16 to 24 this year, BPA collected 30,792 samples of empty containers from 9 container terminals in Busan Port for inspection. The results showed that the condition of 52% of empty containers is not ideal .
BPA stated that many containers need to be cleaned again . In addition, insects such as cockroaches and spiders were also found in some containers .
More importantly, 59% of all return empty containers have defects . The defect rate of empty containers returned to the port by Korean domestic importers was 47.2%.
"This is because the shipping company did not conduct proper inspections before shipping containers to Busan Port." BPA said.
It is understood that since 2018, with the assistance of local fisheries departments, animal and plant quarantine agencies and customs, BPA has been paying close attention to the cleaning and damage of containers and conducting related investigations.
Investigations have shown that in many cases, the exterior or interior of the container is obviously damaged, and garbage is deposited. About 1.2% of containers had to be replaced because they could not be repaired.
At present, the shortage of containers in the Asian market is still severe, while more and more containers are stranded in American ports.
Major US ports, including the Port of Los Angeles and the Port of Long Beach, have generally experienced equipment shortages and extended loading and unloading times. Coupled with the serious container imbalance problem in Pacific trade, a large number of imported containers are backlogged in American ports, causing terminal congestion, container turnover, and cargo transportation.
This situation has intensified, making the local port "close to complete paralysis."
Although shipping companies are also trying various ways to seek various solutions to speed up the dispatch of empty containers, according to Maersk’s estimation, many countries around the world are experiencing national blockades due to the second outbreak of the epidemic, and the shortage of empty containers is expected to remain Will continue.
As my country's foreign trade exports gradually stabilized and improved, the lack of domestic export capacity has appeared in many places, and for a period of time, it has also been accompanied by a shortage of containers.
Recently, a 1℃ reporter from China Business News found that the main reason for the “difficult to find one container” situation was that due to the epidemic, the efficiency of container turnover was reduced, and the port congestion caused a large number of delays in shipping schedules, which further aggravated the return of containers. smooth. With the efforts of domestic container manufacturers in recent months, the shortage of domestic containers has improved, and the shortage of some ports has eased.
However, new container manufacturers dare not continue to expand production capacity. Because of the epidemic, market uncertainty continues.
According to the 1℃ reporter's further on-site investigation, the shortage of containers has stimulated the kinetic energy of new container construction in China, and the prices of raw materials and labor have risen. The ex-factory price of new containers will rise accordingly. For the high freight rates, it is the foreign trade companies that ultimately suffer the loss of profits.
Inefficient port congestion
On the afternoon of December 2, when the 1℃ reporter arrived at Shenzhen Yantian International Container Terminal, the containers were piled up like a mountain, and heavy semi-trailer trucks entered and exited in file at the gate: the first class trucks were fully loaded with the containers that were about to be exported and went through automatic inspection. The passage enters the terminal, and the other type is an empty truck, which enters the gate and exits after the airspace cabinet. Many large trucks are still lining up to pick up the containers.
Chinese exports with a major source of container in two aspects, one is emptying the old container port after unloading , the second is Chinese-made box business of new office box . According to statistics from China Container Industry Association, usually the storage size of empty containers at ports is about 4 million TEU (Twenty-feet Equivalent Unit, the international standard unit, a container with a length of 20 feet is the international unit of measurement), and the port unloads old containers. It is the main source of supply for export boxes in my country.
We have not yet seen data on how many empty containers are available in the yards of domestic ports such as Yantian Port, but statistics from the China Container Industry Association show that since this year, China’s major foreign trade container ports have unloaded old container stocks with export growth and overseas adjustments. Due to restrictions on the return of empty containers and other factors, the unloaded old container stock of the seven major foreign trade container ports continued to decrease from about 3.05 million TEU at the end of February 2020 to about 1.85 million TEU at the end of October, compared with the same period in the past five years A reduction of 26%.
Photo: Yantian International Container Terminal is located in Dapeng Bay, east of Shenzhen. Photo/Wu Mianqiang
At present, domestic export containers are still very tight. In addition to the fact that container transportation has broken the original arrival and delivery balance level, the decline in container circulation speed and port congestion are also one of the main reasons.
As the "barometer" of global trade, containers have a complete set of operating procedures. According to people in the shipping industry, taking shipping as an example, the port terminal is a transfer station for containers. Export companies book space and containers from the freight forwarder. After passing through the export customs broker, the trailer fleet consisting of semi-trailers goes to the terminal and other yards to pick up containers After the container is filled with cargo, it is sent to the port terminal for export. After the liner arrives at the destination port with the container, the local cargo owner arranges customs clearance, picking up the container, unloading, and returning the container to the terminal yard. After waiting for the local export company to book, pick up the container and load the cargo, the container will be transferred back to China by liner.
However, the lingering epidemic has affected the efficiency of the above-mentioned container operations. Overseas epidemics have repeated, and the efficiency of local cargo owners in customs clearance, container picking and unloading is low. The relevant person in charge of the Guangdong small appliance export company previously interviewed by the 1℃ reporter said that their company's goods are in the ports of European and American countries .
Affected by the epidemic, many countries have experienced labor shortages, especially port operators, trailer truck drivers and related logistics personnel.
Master Sun, a truck driver picking up cargo at the Shenzhen container yard, told the 1℃ reporter that the company’s overseas business divisions had a "labor shortage". The United States had just finished Thanksgiving and will enter the Christmas season, which will further increase labor. tension.
The China Container Industry Association recently issued an "Action Initiative for Enterprises in the Container Industry Chain to Work Together to Stabilize Foreign Trade and Promote Growth", which stated that "Due to the increase in the number of infected people and the requirements of epidemic prevention measures, shippers (from across the ocean) cannot normally get from ports. The goods are shipped out of the cargo yard, and some goods are even rejected after arriving at the port. This has caused more and more containers to be piled up in disorder at the port. This disordered storage has caused the shipping company’s ships to be unable to dock and offshore on schedule. Affected the turnover efficiency of containers."
"From a global perspective, the supply chain of container transportation has slowed down. This is also one of the important factors that have caused global container tension." said Zhao, who has been in the shipping industry for more than ten years. Therefore, ports are definitely better than Congestion in the past was inevitable.
The prevention and control of the epidemic has also reduced the efficiency of domestic container operations. Lao Zhao recently told reporters at 1℃ that after the liner arrived at the domestic port, compared with the non-epidemic period, the quarantine process and procedures have increased. For example, the container needs to be disinfected, which leads to a longer time for customs clearance and unloading. "The crew cannot go ashore. It needs to be isolated and rotated first."
Port congestion will lead to adjustments in shipping schedules and affect the efficiency of container transportation. Since the third quarter of this year, the Ocean Network Express (ONE) of the TA Alliance has continued to update the schedule adjustment notice on its official website. The reporter at 1℃ found that most of the reasons were caused by port congestion.
From December 1st to 4th, ONE continuously issued more than 20 notices regarding the Shanghai Port shipping schedule changes or late opening notices, mostly due to "the effect of port congestion causing delays in shipping schedules." In the past November, there were more cases of ship delays due to port congestion. ONE is a Japanese container shipping company headquartered in Tokyo and Singapore. It was established as a joint venture by a Japanese shipping company in 2016, with a fleet of over one million TEUs.
"Once there is congestion in the port, the operation efficiency of containers will be low, which will further aggravate the tension of container use." Lao Zhao said.
As the international container ocean trunk transportation hub port in South China, Yantian Port is one of the world's largest single-handle container terminals. It mainly serves routes exported to Europe and the United States. Nearly 100 liner routes reach Europe, the United States and other regions every week. The 1℃ reporter found on the scene that the port was busy, and the gates were still slightly crowded. Many large trucks stopped at the door and waited for the relevant procedures to be completed, while the large trucks that had already lifted their cabinets slowly pulled out of the cracks.
Cost rises, logistics prices soar
The shortage of domestic export containers has caused the single-container market price to soar. As the order volume of container manufacturers increases, the cost of raw materials and labor has increased. In addition, the shortage of shipping space has further increased the cost of export containers for enterprises, increasing the logistics cost of the foreign trade industry and eroding the profits of export enterprises.
In fact, more than 90% of global containers are currently supplied by Chinese companies. According to the research report of Dongxing Securities, on the container production side, CIMC (CIMC, market share of 44%), Shanghai Universe (DFIC, market share of about 24%), and Xinhuachang (CXIC, market share About 13%), Singamas (about 3% market share) occupy most of the market share.
According to data released by the China Container Industry Association, there are three main types of container buyers. One is shipping companies, the other is container leasing companies, and the third is domestic railway and logistics companies . The third category accounts for a very low proportion, not exceeding all. 8% of annual container production and sales. The total production and sales of China's container manufacturers are between 2 million and 3 million TEU each year, and the storage of new containers accounts for 10%-20%.
1℃ reporters interviewed shipping companies and container manufacturing companies in many ways and learned that in the first five months of this year, China’s container manufacturers had almost no new orders. The pessimistic judgment of China has reduced liner shipping capacity and container procurement plans.
However, after June this year, my country's foreign trade quickly recovered. After the empty containers at the port were digested, the information of the lack of containers in the market was transmitted to the container manufacturers in mid-July, and orders continued to increase. "In September, our order volume has been scheduled to March next year." A person from CIMC Group who did not want to be named told 1℃ reporter.
"As a container equipment provider, we mainly produce according to shipping company orders. The shipping industry is currently booming and freight prices are rising. Therefore, shipowners and container leasing companies are also willing to purchase large quantities of containers." Liu Meng, a senior employee of a major domestic container manufacturer (Pseudonym) said.
Continued hot container production orders have caused the price of raw materials in the container supply chain to rise, including raw materials required for container production such as steel, wooden floors, and paint.
Insiders of Singamas Containers told 1℃ reporters that according to their understanding, steel, wood floors, and paint have all increased in varying degrees since the beginning of this year. "Compared with the off-season in the first half of this year, the price of steel has increased by about 10%, and the current average is more than 4,000 yuan per ton, and the wood floor has increased by 50% year-on-year." A relevant person in charge of a container manufacturer told 1℃ reporter.
The number of container floor sales is consistent with the trend of China's container export volume. In the raw material sector, the shortage of wood flooring is the most obvious, so prices have also increased significantly.
Kangxin New Material (600076.SH) is the only listed company in China that is mainly engaged in container floor panels. The company’s securities department confirmed that its finished product prices this year have exceeded the same period last year, "because of the increase in raw material and labor costs."
The main raw material of the container floor is logs. A domestic container bottom plate supplier told the 1℃ reporter that the current price of wood has increased significantly, and the purchase price of better poplar wood ranges from 800 to 1,000 yuan, which is more than 50% higher than when the market was normal. In the case of shortage, if the price is not increased, the timber merchant will not deliver the goods to the transaction."
The increase in supply chain costs has also driven up the selling prices of container products . A few days ago, a reporter from 1℃ asked CIMC insiders about the order status in the name of the leasing company. The salesperson of the other party said, “Orders are very slow now, and they need to wait until March next year to deliver them, mainly now (production orders). Don't go in."
The above-mentioned sales staff stated that the current order volume of the company is mainly unified at the head office level. “The selling price of 20-foot container (standard box) is now US$2,600, 40-foot container (high container) is US$4420, and 40-foot container (flat container) is 4210. Around the dollar."
Compared with last year, the price of new boxes between US$1600 and US$1700 has increased significantly. According to the research report of Dongxing Securities, in August this year, the price of a new container was only US$2,100.
"The epidemic is a double-edged sword, both an opportunity and a challenge." Recently, Lao Zhao said. Most of the foreign trade companies that have survived now have received many foreign orders, but at the same time they have encountered high freight costs caused by the shortage of containers and the shortage of space.
"Many of our company's customers, currently doing foreign trade orders, are not making enough money to pay for sea freight. Examples of this are everywhere. Even if they lose money, they still do it because they have a long-term vision and want to maintain good customers first. In the future, the freight rate will be lowered and then the profits will be made back." A business executive who has been a freight forwarder in East China for 10 years told 1℃ reporter.
I dare not rush to expand production after receiving orders in the first quarter of next year
On the evening of December 2, a 1℃ reporter came to the container production workshop of Dongguan South CIMC Logistics Equipment Manufacturing Co., Ltd. (hereinafter referred to as "South CIMC"), a subsidiary of CIMC Group, Fenggang Town, Dongguan City. A scene in full swing.
This is one of the largest container production bases in the country, and it is said that 1 out of every 10 containers in the world goes to sea here.
Worker Master Wang (pseudonym) had just left work and was riding a battery car to go home. He told the 1℃ reporter that the factory orders are currently full and he worked 11 hours that day. "Our factory is now operating in two shifts and is producing at full capacity," a person close to Southern CIMC told 1℃ reporter.
Since the third quarter of this year, as CIMC's order volume continues to increase, Master Wang has many colleagues who come to help temporarily. The 1℃ reporter learned during an interview with Southern CIMC that the plant has added many new temporary workers this year. “Most of them are labor dispatch employees, and the average daily salary of each person is 300 yuan, which is tens of thousands of yuan a month.” A labor dispatch company who recruited welders in a container factory of CIMC Group introduced.
"The main reason is that the container manufacturing industry is deeply affected by the shipping industry. When the market is good, the number of orders will increase, and if the production is at full capacity, there will be a shortage of manpower; when the market is not good, the number of orders will decrease, and manpower will be sufficient or even surplus. "The above-mentioned CIMC insider told the 1℃ reporter that many CIMC people (employees) still have fresh memories of the experience that factories were shut down during the financial crisis in 2008 and that they were looking forward to working at home.
On December 3, regarding the current shortage of containers and soaring freight rates in the field of foreign trade and logistics, the spokesperson of the Ministry of Commerce Gao Feng said that on the basis of the preliminary work, the Ministry of Commerce will continue to promote the increase of capacity and support the acceleration Container return transportation, improve operation efficiency, support container manufacturing enterprises to expand production capacity, and at the same time increase the intensity of market supervision, strive to stabilize market prices, and provide strong logistics support for the stable development of foreign trade.
Recently, the China Container Industry Association has also issued an initiative to "advocate container industry chain enterprises to actively invest in stabilizing foreign trade", and strive to improve the efficiency of international container turnover. Production-related enterprises should continue to improve production efficiency, continue to tap potential production capacity, and improve process equipment. Increase the number of workers, improve their labor skills, and make every effort to ensure that new box orders are delivered as soon as possible.
Affected by the current shipping situation, many large domestic container manufacturing companies are making every effort to ensure the delivery of new container orders as soon as possible to escort foreign trade exports, while also considering the future balance of supply and demand in the global container market.
In fact, the container manufacturing and sales industry and the development of the shipping industry share each other. Nowadays, aspects of container production enterprises are operating at full capacity ensure market supply; on the other hand below the epidemic, we still dare to expand production capacity.
People in the shipping industry predict 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 next year.
"The main reason is that I dare not judge the future market prospects." Liu Meng told the 1℃ reporter that the current epidemic situation continues and container manufacturers are also worried that after receiving external orders, they cannot judge the future market development. If the order is received first next year Quarterly, the supply can be guaranteed, and the market will not be turbulent at the same time, so everyone hopes to have such a steady move.
"Now that the market is in short supply, we can completely 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." Liu Meng said that the demand for containers in global trade is only There are several million TEUs, once container overcapacity occurs, it will be a serious problem.
The current life span of containers is 10-15 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." Liu Meng told the 1℃ reporter.
Due to the superimposed impact of the epidemic and the Spring Festival, the Guangdong-Hong Kong route barge company plans to suspend the Guangdong-Hong Kong route starting from mid-January 2021. Affected by this, many shipping companies such as ONE, OOCL, Hapag-Lloyd have issued notices and suspended Receive cargo from multiple ports in South China and other places.
Lars Jensen, CEO of SeaIntelligence Consulting, pointed out that although the mainline ships are not covered by the suspension, "the decline in the service capacity of barges will affect the entire South China connection market."
For shipping companies, there are two benefits to stop accepting space reservations: First, it can digest orders that have been received before; second, after nearly a month of empty container allocation, it will help alleviate the current shortage of containers in China’s ports. status.
In view of this, until the Spring Festival, the freight rate will not be reduced in any way, the tightness of empty containers will not be alleviated, and no bookings will continue.
Hapag-Lloyd suspends South China branch service during the Spring Festival
Due to quarantine requirements for crew sailing between South China and Hong Kong after the Spring Festival holiday in 2021, feeder operators in South China announced that they will suspend services from January to February 2021. In consideration of this situation, Hapag-Lloyd will temporarily suspend the receiving of cargo at the final destination in the Pearl River Delta and Fuzhou until further notice.
However, it will continue to accept cargo arriving at major ports (ie Hong Kong, Yantian, Shekou) via mainline services. Please note that the time of suspension of booking reception in South China is based on the estimated time of arrival at major ports.
After unloading the cargo during the outage of the feeder line operator, any other expenses and responsibilities incurred at the transshipment port (Hong Kong, Shekou, Yantian) related to detention fees, terminal storage or terminal fees will be borne by the cargo owner .
Affected ports:
Hapag-Lloyd announced on December 3 that the port is congested due to stricter customs inspections and disinfection of imported food entering Huangpu. From now on, we will temporarily stop accepting reservations for refrigerated containers entering Huangpu Port in China until further notice. At the same time, it was announced that it will temporarily stop accepting orders for imported reefer containers from Busan, South Korea to Tianjin, China, with immediate effect.
In addition, Hapag-Lloyd also announced the suspension of all 40' freezer bookings in Germany, Austria, Switzerland, Hungary and the Czech Republic until the end of December 2020.
ONE suspends receiving cargo from South China during the Spring Festival
As crews on the coastal feeder between South China and Hong Kong are required to undergo COVID-19 quarantine, the feeder operator announced the suspension of services from mid-January to the end of February 2021. Taking into account this situation, the acceptance of all container types, including dangerous goods containers, reefer containers and major cargo destined for ports in South China, Guangxi and Fujian, will be suspended. The suspension of booking arrangements through major ports in South China is shown in the following table:
Due to stricter customs inspection and disinfection requirements for refrigerated containers imported into Xiamen, Fuzhou and Fuqing ports, the delivery of inbound refrigerated containers at these ports has been slow and is facing congestion.
In consideration of this situation, starting from December 9, 2020 (shipping date), ONE will stop accepting bookings for all refrigerated goods arriving and transshipped through Xiamen, China, until further notice. For containers in transit, ONE will strongly encourage customers to consider changing the destination to other alternative ports, especially for time-sensitive goods, such as fresh refrigerated goods. For refrigerated containers that have been shipped to Xiamen or are waiting to be shipped to Xiamen at the transshipment port, please note that all related costs will be paid on the consignee’s account and paid upon delivery.
Similarly, in view of the above circumstances, starting from December 8, 2020 (shipping date), ONE will stop accepting all orders for refrigerated goods to Fuzhou and Fuqing, China, until further notice.
For containers in transit, ONE strongly recommends that customers change their destinations to other ports, especially for time-sensitive goods, such as fresh and refrigerated goods. For containers that have been transshipped to Fuzhou/Fuqing or are to be shipped to Fuzhou/Fuqing at the transshipment port, once the feeder space of Fuzhou/Fuqing is available, a specific surcharge will be charged when loading.
Previously, Ocean Network Shipping (ONE) issued a notice stating that due to stricter customs inspections and disinfection procedures for imported food goods (including meat, seafood, dairy products, fruits and vegetables), Guangzhou Huangpu Port is facing a slow, Port congestion and other issues.
In view of this, from November 26 (the day of shipment), ONE announced that it will stop accepting orders for food products shipped to Huangpu Port in Guangzhou until further notice. For goods that are already in transit, ONE recommends that customers consider changing the port of destination, especially time-sensitive goods such as chilled and frozen.
OOCL suspends barge services in multiple ports
OOCL issued a customer advisory stating that due to the epidemic, the capacity of the Hong Kong and Macau South China barge routes has dropped significantly. It is expected that during the 2021 Spring Festival holiday, the import operations of ports in South China (including Guangdong, Guangxi, Hainan, Yunnan and Guizhou) will be affected and restricted.
The specific date depends on the destination of the container:
From January 18 to February 21, 2021, barge services to Hainan/Guangxi/Pearl River Delta ports (including Huangpu, Guangzhou, Foshan, Zhuhai, Dongguan, Zhongshan, Shantou, etc.) will be suspended;
From January 16 to February 21, 2021, cargo shipments of dangerous goods to ports in the Pearl River Delta economic centers such as Guangzhou, Foshan and Jiangmen will be suspended.
From January 18 to February 21, 2021, the import of frozen products will be prohibited at ports in the Pearl River Delta (including Huangpu, Guangzhou, Foshan, Zhuhai, Dongguan, Zhongshan, Shantou, etc.);
From January 16 to February 19, 2021, the import of over-restricted cargo is prohibited at the ports of the Pearl River Delta (including Huangpu, Guangzhou, Foshan, Zhuhai, Dongguan, Zhongshan, Shantou, etc.).
The sky-high freight rates, and the hot availability of space and empty containers, are forcing freight forwarding logistics companies to charter ships and open shipping routes.
Last week, it was reported on Souhang.com that freight forwarding giant DSV Panalpina bypassed the shipping company and leased three ships and a batch of empty containers to open a new China-Denmark route. The latest news is that another freight logistics company giant DHL Global Forwarding also Is considering stepping in.
Dominique von Orelli, executive vice president of DHL Global Forwarding, confirmed to the media that the company is evaluating charter plans.
DHL considers chartering for customers
A large freight forwarding company considered direct control of ship assets, but actually entered an industry that is different from its core business in terms of operation and culture. On the other hand, it also shows how popular it is to ship containers from Asia to Europe and North America. And freight forwarders desperately provide customers with adequate services.
"There may be more freight forwarders to follow suit ." Anil Vitarana, former president of United Arab Shipping, said in a post on LinkedIn.
"If there is a continuing shortage of ship capacity and containers, and major logistics providers and 3PL find it feasible to use internal resources to integrate the economic benefits of the entire supply chain, shipping companies may regret the beginning of this trend." Vitarana wrote.
He added that the logistics provider/third-party logistics provider (3PL) team includes former executives of the shipping company and can help his current employer provide the services provided by the shipping company.
Vitarana also stated that shipping companies can also cooperate with 3PL to improve service capabilities. He pointed out that CMA CGM acquired CEVA Logistics in 2019 and Maersk included DAMCO in its integrator strategy, which has further promoted the supply chain solutions of shipping companies. Program.
But not all freight forwarders consider it necessary to provide shipping services to customers.
Two other large freight forwarders, Kuehne + Nagel and DB Schenker, said that although the container market is extremely tight, they do not think such a move is necessary.
Freight forwarding giant Kuehne + Nagel expressed confidence in products based on digital solutions and cooperative relationships with shipping companies, able to provide services to customers, and will continue to provide leasing services for project cargo, rather than container customers.
DB Schenker does not believe that chartering is one of the solutions for capacity. The current shortage of ships and chartering costs have also increased. Alphaliner, a maritime analysis agency, pointed out in mid-November that most ship charters are tight. The daily charter price of 3,000-3,500 TEU ships is US$18,000, an increase of US$2,000 from the end of October.
Thorsten Meincke, DB Schenker's board member responsible for air and ocean freight, said that the resources needed to charter and manage ships are often underestimated, which will distract attention from the reliable and robust services provided by freight forwarders.
"Once you have ship assets, you have to fill them up. This will become your focus, rather than providing customers with the best solutions," Meincke said. "The current challenge facing the maritime market is largely the shortage of containers, not just the space of ships."
Indeed, other sources also believe that despite Maersk’s efforts to redefine its business model by integrating traditional shipping and freight functions, there are still huge differences in operations and culture between freight forwarders and shipping companies.
Ship asset owners must keep their ships full and require functions and costs such as ship planning and container repositioning, and freight forwarders usually rarely consider these daily affairs.
In addition, the source said that the shipping capacity chartered by DSV is small, and its cost is far from competitive with ships of 20,000 TEU or more that travel between Asia and Europe. This is why freight forwarding and shipping are almost always in different organizations, even in larger shipping companies.
