/ By tjchinafreight ivy / Shipping

Lost bill of lading – how to solve and deal with it?

A bill of lading is a document that certifies the contract of carriage of goods by sea and that the carrier has received or loaded the goods and guarantees that the carrier will deliver the goods in accordance with the contract. Since the goods can only be picked up by the bill of lading, in international trade, especially under the conditions of FOB and CFR, the bill of lading is of great significance and is considered to be the representative and sign of the goods.
However, since only one set of bills of lading can be issued for one shipment of goods, and the bill of lading is a negotiable document, once the bill of lading is lost, it will have a great impact on the development of foreign trade, which may cause the seller to fail to settle foreign exchange and the buyer to pick up the goods.

What is a bill of lading?
A bill of lading (BOL or B/L) is a shipping document whereby the carrier is obliged to deliver the goods at a named place.
The bill of lading is also proof that the contract is signed before the bill of lading is handed over to the master.
For more information on bills of lading, see our article - Bills of Lading.

Lost bill of lading
Losing a bill of lading can be a big problem as ocean carriers deliver containers against it. Missing this document may prevent us from picking up your order.
Downtime or demurrage charges may apply if containers remain in port for too long.

What to do if OBL is lost..??

Here are some steps you can take if a negotiable bill of lading is lost, stolen or destroyed

1. Pictures of lost bills Advertise in local media about the "lost" or "obsolete" original bills
2. Security may be obtained by a court order advising the carrier (shipping line) to deliver the goods to the owner of the goods, subject to the security provided by the goods claiming entity, in the amount of the court..
3. The carrier shall also receive an indemnity letter to indemnify the carrier or any person injured by the delivery against liability under the unpaid original bill. The court may also order reasonable costs and attorneys' fees to be paid to the carrier.
4. Certain banks accept a letter of guarantee signed by the bank and the bank will be jointly and severally liable to return the original bill of lading (if found).

However, some precautions need to be taken, such as:

Advertising about damages is by no means a complete defense of liability for wrongful delivery.
This is only evidence that the loss occurred and that the original owner had the intention to cancel the original bill of lading issued.
The carrier should know who owns the goods and only issue copies to that entity, as in some cases an entity that does not own the goods has advertised the loss and persuaded the carrier to issue a second set of originals, while the first still remains. In the hands of its rightful owners, nothing was actually lost.

It should be treated differently according to different situations:

  • Under a named bill of lading: the carrier may deliver the goods to the consignee of a named bill of lading after receiving the consignee's company guarantee and the consignor's written assurance that the goods are to be handed over to the consignee.
  • Under the order bill of lading: if the port of discharge agent receives a request from the consignee that the bill of lading is lost and cannot take delivery of the goods against this bill of lading, the consignee shall be required to present the original/copy of the bill of lading issued by the original carrier, commercial invoice, commercial Documents such as contracts and packing lists to check whether the consignee is the consignee. The port of discharge agent should also require the consignee to provide a form of guarantee issued by a first-class bank that meets certain standards. At the same time, the agent of the port of discharge should ask the agent of the port of loading to contact the consignor on the bill of lading to obtain the consignor's consent. In this case A written guarantee that the shipment is released to the consignee.
  • Under the bearer bill of lading: refer to the instruction bill of lading for specific practices. If the consignee returns the full set of original bills of lading, the letter of guarantee can be returned to the consignee. If the consignee cannot return the full set of original bills of lading, in principle, the letter of guarantee shall be retained indefinitely. If the consignee makes a return request, the port of discharge agent shall retain a minimum period according to the law of the host country. The domestic port proposal needs to be kept for 6 years. After the bill of lading is lost, contact the shipping company immediately to control the cargo, no matter what the circumstances. In this way, losses can be reduced, and at the same time, the rights and interests of the receiver and the consignor will not be damaged.
/ By tjchinafreight ivy / Shipping

How to avoid extra charges in shipping

For SMEs, warehouses, manufacturers, distributors and importers, controlling freight costs is critical to maintaining the profitability of product lines, and even the success of the business itself. Here are some basic steps to avoid incurring additional unexpected costs in shipping.

1. Make sure you receive a fixed cost quote
This is where it becomes important that you correctly report the weight and dimensions of your load. When you're ready to ship, make sure the carrier provides terms that outline all potential costs associated with the shipment and that the items you'll be shipping are properly documented. If you fail to receive these fixed cost quotes, or receive inaccurate records, you may end up paying much more than you expected.

2. Has the correct size and weight
The key to an effective fixed cost quote is accurate length, width, height and weight measurements. If the carrier shows up and your load is bigger or heavier than expected, you will pay more immediately.

3. Record specific delivery and pickup dates
Just as you want accurate fixed cost quotes, you want accurate delivery and pickup dates. It is critical that these times are recorded in writing in case the carrier misses an appointment for either party.

  • When you pay for shipping, the payment is more than your guaranteed space on the truck. You're paying for timeliness, and if you're a business owner, you know how important it is to deliver goods as promised.
  • If you fail to record specific dates for pickup and delivery and provide them in writing, the carrier may miss those dates and you will be charged for services not provided.

Often, delays occur without the carrier's intention. Severe weather can strike at any time, and road collisions can shut down entire highways. Still, it's important to have official documentation proving delivery and pickup dates.

4. Know your pickup and delivery locations and their limitations
Make sure the type of truck you order can reach the pickup and delivery location. Can a 53-foot truck turn in front of your facility? Can they pick up from your dock? Check yourself to make sure the carrier cannot classify the pickup or delivery as residential. Don't misrepresent a residential location as a business and hope the carrier won't notice. Residential pickup or delivery will always cost more. You want to include this information in your original quote request so that you can find a carrier that offers the best price for this particular service as part of your original quote.

5. Don’t overlook special services
If you are ordering goods, please consider whether any special handling is required. In almost all cases, if you fail to report something of this nature, the carrier will charge significantly more than the agreed rate. However, following this advice will not only save you additional shipping costs, it will also keep your shipments safe from unnecessary damage.

  • The most common special services include heating, tailgate, scheduled pick-up and special handling of dangerous goods. Consider what you'll be shipping, and if you think you'll need any of these services, be sure to alert the carrier before your shipment is loaded onto the truck.
  • You won't have to worry about having to pay later, but if your shipment does require these services and you don't receive them, you could lose important shipments in transit.

6. Pack your package properly
If you fail to pack your cargo in the correct way, you may damage not only your cargo, but other cargo being transported within the truck, especially if it is shipped in LTL. This can lead to a costly and avoidable claims process.

7. Make sure all taxes and fuel surcharges are included in the quote
When you get your fixed cost quote, is it "all"? Make sure that taxes and fuel surcharges are clearly stated, otherwise when the carrier adds these charges, the final bill can easily be 20-40% higher. At Freightera, all quotes are all-inclusive, as long as you quote exactly what you're shipping!

8. Please have all customs documents ready and forwarded to the carrier at the time of booking
Before contacting the carrier or broker to arrange a pickup, make sure you have a customs broker that can clear the shipment into the country of delivery and complete all paperwork. If you do not already have a customs broker, seek advice from your carrier or broker in advance. You don't want to leave it until the day it ships, as the shipment could hang up at customs, causing you extra costs, delays and a lot of stress.

9. Make sure you have the coverage you need
Carriers and brokers typically offer little or no insurance ($2.00/lb). If you're shipping valuable goods, be sure to purchase additional insurance, and make sure all quotes clearly state this coverage and its costs. Also check with a third party ahead of time to ensure the carrier or broker has a history of paying claims. Too many carriers and brokers have policies that automatically deny any insurance claims, forcing shippers to sue in the event of damage. Make sure you are properly covered by the insurance company, carrier or broker that covered your claim.

10. Make sure quotes are in your currency
Many carriers operating in the US are actually based in nearby countries. Therefore, the quotes you receive may not be in your most frequently used currency. Due to different exchange rates, the difference between the price you see on the quotation and the price you have to pay can be very large.
When you receive a quote before shipment, make sure the quote is in your currency. If you fail to spot that small but crucial difference when confirming shipping costs, the final bill could be significantly higher than you expected.

/ By tjchinafreight ivy / Shipping

Container Rental Guide

Why rent a container?

Are you looking for a specific period container? Do you have items or items that you want to store in containers to protect them from damage? Do you want the flexibility to rent containers at different points in time? If the answer is yes, then renting a container is ideal for you. Container leasing gives you flexibility in how you use your containers and how you plan your budget. Buying one, on the other hand, increases your liability and costs.

Here are the different types of container rentals that we will be covering in this blog:

1.Master lease
They are also commonly referred to as short to medium term leases. They fall into the full-service rental category with no cap on the minimum or maximum number of containers. The lease term is variable and the lessor is responsible for the maintenance, repair and relocation of the container. The agreement also involves an accounting system that includes debits and credits between the parties based on the condition of the containers at the time of their return. The lessor must undertake the allocation of the containers to meet the needs of the lessee. Therefore, it is important to ensure a stable supply of empty containers at the pick-up point. The master lease agreement sets out the main conditions such as the rental cost per day, the types of containers that can be disposed of, the number of containers to be used in each warehouse, the collection and delivery centers, payment terms, etc. The lessee has no obligation to use the container before picking up the container from the yard, and the contract takes effect when the lessee picks up the container from the yard. A separate individual contract is signed for each container collected under the Master Lease Agreement.

2.Long-term lease
Far less flexible than a master lease, long-term leases are a favorite of many rental companies. The duration of the contract is fixed. As well as a certain number of containers and delivery schedule. This leaves the leasing company with nothing to do once the container is signed for.

The lessee bears the cost of repairs, maintenance and relocation. Although definitions of terms vary, most leasing companies define long-term leases as 5 to 8 years. For long-term leases, the containers are usually brand new. This is why many long-term rental agreements come with negotiable terms. The clause allows rental rates to be negotiated after a few years based on depreciation and market fluctuations.

3.One way rental
They are also known as one-way rental agreements, and containers can be picked up at one location and dropped off at another. Both parties benefit from such one-way leasing arrangements due to operational rationalization and cost reduction. It is suitable for different regional requirements of customers and has the added benefit of saving on relocation costs.

4.Short-term rental
Also known as spot market leases, they are subject to market conditions dictated by supply and demand dynamics. Such leasing arrangements typically occur during temporary demand surges, which may be cyclical or sudden. Because of this market volatility, leasing companies prefer not to keep large inventories of such containers to meet short-term rental demand, to avoid the possibility of them being underutilized for an extended period of time. But careful planning and forecasting can handle unforeseen surges in demand. Maintenance, repair and relocation tasks are undertaken by the lessee. Aside from the higher cost, the one setback here is that you have to adhere to the minimum time to use the container. Usually leasing companies do not want to rent out containers for less than 6 months.

Transaction speed is another important issue for businesses to consider. Rental companies are also on the platform. Given the unbalanced nature of the world economy and trade, the number of containers is unbalanced.

/ By tjchinafreight ivy / Shipping

Shanghai’s export business has the latest adjustment!

The Shanghai Epidemic Prevention and Control Office issued a notice deciding to carry out a new round of dicing and grid nucleic acid screening across the city. Starting from 5:00 on March 28, Shanghai will implement nucleic acid screening in batches with the Huangpu River as the boundary.

•The first batch, Pudong, Punan and adjacent areas (including the whole area of ​​Pudong New Area, the whole area of ​​Fengxian District, the whole area of ​​Jinshan District, the whole area of ​​Chongming District, Pujin Street, Pujiang Town of Minhang District, Xinbang Town and Shihu Lake of Songjiang District Dang Town, Maogang Town, Yexie Town) first implemented the lockdown and carried out nucleic acid screening, and the lockdown was lifted at 5:00 on April 1.

• For the second batch, starting from 3:00 on April 1st, according to the principle of stubble promotion, the Puxi area will be closed and controlled, and nucleic acid screening will be carried out, and the closure will be lifted at 3:00 on April 5th.
At present, some logistics companies in the first batch of closed and controlled areas have issued a notice to suspend the service of entering warehouses and receiving goods, and will resume at 5:00 on April 1, 2022.

Shanghai Port operates normally and maintains 24-hour operation
In terms of ports, SIPG issued a notice to customers, stating that at present, all production units in Hong Kong will maintain 24-hour operations except for the impact of extreme bad weather.

Shipping company operation adjustment notice

aerial view port at shanghai

From 5:00 on the 28th, Shanghai will implement nucleic acid screening in batches with the Huangpu River as the boundary. All enterprises in the closed area have implemented closed production or work from home. The first batch of logistics enterprises in the closed area have issued a notice to suspend the receipt and delivery of goods into the warehouse. Shipping companies: Maersk, COSCO, Hapag-Lloyd, Evergreen and Mason have issued business adjustment notices one after another.

1. Maersk

Maersk emphasizes:

Some warehouses in Shanghai have been closed since March 28 until further notice. A list of open warehouses is attached to this announcement. As the Pudong and Puxi areas of Shanghai are in full lockdown until April 5, trucking services in and out of Shanghai will be severely affected by 30%. All warehouses in Shanghai will remain closed from March 28 to April 1.
The air freight business of goods from existing warehouses in Shanghai remains normal. However, new cargo acceptance will be affected due to first mile deliveries and human resource constraints. The Shanghai counter will be closed from March 28 until further notice.

2. COSCO Shipping Lines

According to the needs of the new crown pneumonia epidemic prevention and control in Shanghai and surrounding areas, COSCO SHIPPING Lines Shanghai and surrounding service organizations (including: Shanghai area, Wuxi operation area, Jiangsu and Anhui operation area, Suzhou operation area, northern Jiangsu operation area and northern Zhejiang operation area) All of them have adopted remote office methods, and will continue to provide customers with stable and reliable services during the epidemic control period.

Other shipping companies have also released relevant adjustments. If you want to know more, you can check the adjustment notice on the corresponding shipping company platform.

/ 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 che / China Freight News

Happy New Year!

The whispers of blessing gently knock on the ear, happiness with the New Year bell quietly come.
The bell of 2022 is about to ring and the New Year is about to begin. In the past year, we have been standing together through thick and thin, and our performance has been climbing.
In 2021, we pay hard work, shed sweat, struggle is blood, harvest is the results, get joy, usher in 2022.
New Year’s Day is coming and good luck is coming. May you take off a tired body, will be happy reserve; May you forget the tiredness of a year, put the trouble but; Unload nervous guard, enjoy the sun bright; Be prepared and seize the opportunity to succeed!
The New Year’s sun began to shine, the New Year’s passion began to burn, the New Year’s blessing came to report, wish the company to take off like a dragon, our cause like fireworks gorgeous, in this only on behalf of our TJ China Freight Co., Ltd, Ltd., thank you for a year of pay and hard work, thank you and the company together happy growth.
The New Year we must make persistent efforts to create brilliant. I wish you good health and a happy family! With my best wishes and sincere happiness, join hands to celebrate the beginning of this New Year. I hope next year will bring you double happiness and a full and happy life. Finally, to all the friends: happy New Year!

–TJ China Freight Co., Ltd

/ By TJ China Freight / Logistic

How To Choose A Good Freight Forwarder?

When you engage the services of a freight forwarder for your global shipping and business needs, what you expect to enjoy is the relationships they already have with various carriers such as ocean liners, truck companies, airline carriers. You should also benefit from their intricate knowledge of how export and import work in different countries. Moreover, they will be able to smoothly handle customs clearances for your goods, and track the status of the shipment as it makes its way from the supplier/manufacturer to you.

What is a Freight Forwarder?

A freight forwarder is an agent or business within the international trade industry that handles the shipping and transport of goods from one part of the world to another either by land, sea, or air. They are involved in the process of getting goods from suppliers and manufacturers, storing them, and facilitating the transportation logistics to end-users and consumers or some other distribution point. For instance, if you wish to ship freight from China, your best bet will be to hire a China freight forwarder to help you handle the daunting and complicated process of moving your freight either through ocean shipping,air freight, road or rail transport, or some other means.

Tips On How To Choose A Good Freight Forwarder

Nowadays, there are so many agents offering freight forwarding services. So, it may be difficult to find the best freight forwarder for your business. To that end, here are tips on how to choose a good freight forwarder that’s perfect for you.

1. Do Your Homework And Know What You Need

The very first thing that will help you secure the services of the best freight forwarder that will move your goods across international supply chains and trade routes is to do your homework. This means knowing what exactly you need. Ask yourself what kind of freight you want to ship in terms of volume and size. You should not expect exactly the same procedure when shipping goods like automobiles when you’re shipping commodities like foodstuffs.

You would also have a preferred mode of transport you wish to use, so it’s good for you to figure that out before contacting a freight forwarder. Moreover, some goods are fragile and require special handling procedures while others don’t. So, for such special shipments like dangerous or hazardous goods, you would expect the shipping process to be slightly more complicated.

When you clearly identify all your internal requirements, then you will be prepared for the hunt for the right freight forwarder to make the process smooth.

2. Consider The Freight Forwarder’s Experience And Network

This is non-negotiable!

The years of experience that the freight forwarder you’re looking to hire has is very crucial to the success of your business relationship. If they’re experienced, that means that they would have dealt with different situations that come up during the shipping process.

Examples of common situations are cases of port shutdowns, strike action by dockworkers, customs issues, cargo rerouting, warehouse problems, etc.  Here is where TJ China Freight comes in with more than a decade of handling and promptly and effectively resolving international shipping and logistics situations for customers all over the world.

With experience also comes an expansive global reach and sustainable business relationships. This manifests through good connections with various suppliers, local handlers and experts, trucking companies, and agents at numerous destinations. That’s how you can be sure your DDP shipments, FBA shipments, or any other freight will be handled well when they arrive at the destination country.

3. Find Out The Services They Offer

By now, you know your shipping needs. However, you don’t want just any freight forwarder with experience. Instead, you need the best freight forwarder that offers the services that will meet handle your shipping requirements. That’s why you have to confirm the services that the freight forwarder offers. These services can range from preparing import and export documents, booking shipping space from air and sea carriers, packing and storing shipments, customs clearance, freight consolidation, tracking shipments, insurance, and many more.

When you know the services that the freight forwarder provides, then you will know if they can make your international shipping process go smoothly.

4. Inquire About Their Permits, Credentials, And Certifications

Before shipments can be transported from one part of the world to another, the freight forwarder in charge of the logistics requires permits and documentation to show that they can handle the cargo. Your company may wish to ship sensitive products such as hazardous materials. To handle these shipments successfully, the freight forwarder will require special licenses. This is why you need to verify if the freight forwarder has these credentials. It will show that they have taken specialized and required training to do the job well.

Another important consideration is whether the freight forwarder is a member of reputable associations such as >WCA. To be a member of such bodies, freight forwarders are required to be financially stable, operationally efficient, have integrity, and pass many other strict vetting requirements. The best freight forwarder will always ensure they are part of such associations to stay in touch with the latest developments in the profession and remain relevant and valuable to customers.

5. What Risk Management Procedures Do They Have In Place?

It is not uncommon for problems to arise during the process of international shipping. There are lots of conditions that can destabilize the transportation of your cargo, whether at the origin, during transit, or at the destination country. So, it’s important for you to verify whether the freight forwarder has procedures in place to manage risks. Freight forwarders that are proactive are the best in handling any issues and proffering solutions to problems as they arise.

A common risk management procedure that you can ask about is cargo insurance. The insurance cover is valuable if anything happens to your shipment, whether it’s a case of loss, damage, or theft. Your mind will be more at ease during the entire shipping process if you know that you’re covered by insurance or any other valid risk management policy. Your freight forwarder should be your partner when there is a crisis.

6. What Is Their Customer Service Like?

Good customer service is the backbone of any business! All the credentials, experience, network and connections in the world amounts to nothing if a freight forwarder does not treat their customers well.

Imagine going through the process of securing your shipments from the supplier or manufacturer only for you to be unable to reach the freight forwarder handling the logistics and transport. If you have inquiries about freight rate or any other issues related to international shipping and the freight forwarder takes forever to respond to your inquiries, would you be willing to do business with them? This is why it’s important to verify what the freight forwarder’s customer service looks like.  You can ask about who the contact person is, who to talk to when a problem arises, how you will be contacted, and also check the reviews from previous customers.

Because international shipping can be tricky, these details are important, which is why clear communication between you and your freight forwarder is very crucial to the success of the endeavor. Great customer service even extends beyond when your shipment arrives. TJ China Freight is a tested and trusted China freight forwarder that offers unbeatable service to all its customers.

What About Pricing And Rates?

You may be wondering by now why there was no mention of pricing and rates in the tips on how to choose the best freight forwarder for your international shipping needs. Yes. It was deliberately left out. Why? Because deciding which freight forwarder to hire based on price alone is misleading and often has dire consequences.

For example, going with a freight forwarder because they offer the lowest rates on a shipment may lead to you having to pay more on subsequent shipments. This is because the freight forwarder would want to make up for the low price that they offered initially. Another possibility is that such freight forwarder that’s offering a low rate may have hidden some charges in the terms and conditions. All in all, low prices are often linked to dishonest dealings. You don’t want to fall victim, do you?

What your main focus should be while you are in search of the best freight forwarder for your business is whether your professional shipping needs will be precisely and promptly met. This is not to say that price is not important. Rather, it should not be your deciding factor on who to choose.

How To Ask For Shipping Rates From Your Freight Forwarder

Now that you know what you need to do to hire the best freight forwarder to handle your shipments, you should know the details you require to get the accurate quote and shipping rates for your products. This will help you prepare adequately and also help the freight forwarder serve you well.

To request for a quote from TJ China Freight, the information required include:

1. Product Name.

The name of the product is required. Also, is the product with or without battery? Is it magnetic? Is it liquid? Are they dangerous goods?

2. INCOTERMS Or Terms Of Sale.

Incoterms refer to your International Commercial Terms with the seller, supplier, manufacturer or factory. Are your incoterms EXW (Ex works), Free on Board (FOB), or Cost, Insurance and Freight (CIF)?

3. Weight And Volume Information.

If you have the goods packing lists, that’s the most preferred. Alternatively, you can send the gross weight and volume information of the shipment.

4. Address Of The Supplier Or Factory.

If your contract price term is EXW, then we have to arrange the pick up from your supplier or facotry, so the address of the supplier or factory will be needed for us to check the pick fee.

5. The Destination Address Or Port Of Destination.

For Express shipping or any type of door to door delivery, we will need your exact destination address and post code to check the exact cost, and for Air freight or any type of shipping to Port only, then your port information will be required.

6. Your Preferred Shipping Method (Air Freight, Express Freight, Sea Freight, or Train Delivery).

The shipping cost is very different for the air freight, express freight, sea freight or train delivery, so pls let us know which shipping method do you prefer.

7. Your Preferred Time of Delivery – How Quickly Do You Want The Shipment To Be Delivered.

If you don’t know what shipping way is more suitalbe for you, pls let us know your preferred time of delivery, we will try to recommend the best shipping method that can meet your demands.

TJ China Freight, Your Best Freight Forwarder In China

As a leading China freight forwarder that specializes in shipping goods from China to other parts of the world, TJ China Freight offers a broad range of freight services like express shipping, warehousing, drop shipping, FBA shipping, and many more. We partner with many reputable organizations such as DHL, UPS, Emirates, etc. to make sure your shipments arrive on time and in good condition. Contact us today for a quote and open the door to an amazing business relationship.

/ By TJ China Freight / Shipping

The freight rates dropped by more than 13%!

Although the new round of new crown pneumonia in Europe represented by the British mutant virus has generally eased, and the congestion of British ports is also showing signs of easing, it will take some time for the European transportation system to fully recover.

At the same time, the goods hoarded before the Chinese New Year have basically been shipped out, and the demand for transportation after the holiday is still recovering. The overall market volume is insufficient, and some voyages have surplus space. Liner companies cut prices to buy goods.

Under the combined influence of the above-mentioned market factors, the freight rates of Asia-Europe routes after the Spring Festival have been declining.

 

The freight rate dropped by more than 13%! Asia-Europe route after the holiday market declines for three consecutive weeks

 

 

According to the Shanghai Export Container Freight Index (SCFI) released by the Shanghai Aviation Exchange, on March 12, the freight rate (sea and ocean surcharges) for exports from Shanghai to the European basic port market was 3,712 US dollars/TEU, which was higher than that on March 5. Compared with 3966 USD/TEU, it is down 6.4%. Compared with the USD 4,047/TEU on February 26, it was down by 8.3%. Compared with the 4281 USD/TEU on February 19, the drop reached 13.3%.

This is also the rate of the Asia-Europe route, which has declined for three consecutive weeks.

The situation of the Mediterranean route is slightly better than that of the European route. On March 12, the freight rate (sea freight and ocean freight surcharges) for exports from Shanghai to the Mediterranean basic port market was 4,020 USD/TEU, a decrease of 5.4% compared with 4,252 USD/TEU on February 19.

The Ningbo Export Container Freight Index (NCFI) released by the Ningbo Shipping Exchange also showed a similar trend.

From March 5th to 12th, the NCFI European route freight index was 2871.1 points, a decrease of 6.2% from the previous week. Compared with the 3192.2 points on February 20-26, a drop of 10%; compared with the 3323.4 points on February 13-19, a drop of 13.6%.

 

The freight rate dropped by more than 13%! Asia-Europe route after the holiday market declines for three consecutive weeks
The trend of NCFI European route freight index

In the same period, the freight index of the NCFI East-West route was 2354.2 points, and the freight index of the NCFI West-South route was 3007.1 points, a decrease of 7.4% and 9.2% respectively from February 13-19.

Entering 2021, the freight rate of Asia-Europe route has experienced an astonishing price increase of 25.8% overnight, and then gradually dropped.

Previously, industry consulting agency Sea-Intelligence had predicted that in 2021, the uncertainty caused by the epidemic would still be very large, and the historically high freight rates would fall.

Lin Shulai, an analyst at Yihailan, analyzed that the market freight rate after the Spring Festival depends on two factors, the operating strategy of the shipping company and the development of the epidemic. It is expected that after the first quarter of 2021, the market is expected to return to normal.

/ 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

Will the freight rate go up?

The prosperous situation of the container shipping market will continue for a longer period of time. The profit of the shipping company in the first quarter of this year is expected to increase to several times that of the fourth quarter of last year, and the profit in the second quarter will be equal to or higher than that of the first quarter.

 

After the Spring Festival, the congestion problem of European and American ports has not been relieved as expected. Instead, it has spread everywhere. Major international ports such as Los Angeles, Oakland, Rotterdam, Hamburg, Felice Du, Liverpool, and Le Havre continued to be congested. Singapore is not immune. Although the current shortage of containers has improved, it is estimated that as the volume begins to increase at the end of March, it will return to the original situation in April.

 

Jeremy Nixon, CEO of ONE, pointed out that Asian terminals currently operate 24 hours a day, while berths on the west coast of the United States work 112 hours a week, container terminals work 88-90 hours a week, and land operations are limited to daytime. Therefore, the current situation of the trans-Pacific route is unlikely to improve in the short term.

 

On the whole, the off-season of the shipping market after the Spring Festival this year is not weak. The number of days for seasonal correction of freight rates before and after New Year's Eve is between 50 and 64 days. The rate of freight rate decline is between 17% and 27%. After the festival, only 3.8% is revised, which is still obvious. Less than historical convention.

 

Looking forward to the market outlook, analysis institutions are optimistic about the market performance this year. Drewry predicts that the global container shipping demand growth rate will reach 10.9% in 2021, which is much higher than the 4.5% growth rate of supply.

 

The Danish shipping consulting agency Sea-Intelligence also estimates that the surge in freight rates may continue until the spring of 2022, and the freight rates for the US line may increase by another 25%.

 

Sea-Intelligence's research report pointed out that the current US retail industry inventory is still at a historical low, and the relative inventory level has been the lowest in 28 years. This is undoubtedly good news for the shipping company. As long as the sales situation is normal, the US retail industry needs to be in Continue to replenish inventory in the next few months.

 

Executives of CH Robinson, the world's leading third-party logistics service provider, pointed out that global road, sea and air cargo congestion is likely to continue into next year and continue to increase transportation costs.

 

Although there is still room for increase in freight rates, the various operating costs of container shipping companies are also increasing significantly. Port congestion has reduced ship turnover by 20% to 30%, and container ship rents have soared, which has doubled in the past year. In addition, the price of marine fuel oil has increased by 60% since November last year, and the difficulty in crew dispatch caused by the epidemic has also increased labor costs by about 20%.

 

Consolidation company believes that starting from May this year, the long-term freight rate of the western US route has started from US$3,000, which is several times higher than that of last year’s US$1,400. Therefore, as long as the freight rates of the European and Southeast Asian routes are stable, the company’s profit in the second quarter may be The first quarter is equivalent. If it is a consolidator that starts to substantially increase US flights in mid-March, there is still a chance that the second quarter will make more profits than the first quarter.