Customs brokers are the experts that help us to import or export products. Also referred to as the import brokers, they take care of smoothly facilitating the clearance of goods through the customs processes.
People often confuse customs brokers with freight forwarders. In reality, freight forwarders are experts in logistics, whereas customs brokers deal in clearing products from customs.
What Customs Brokers Do?
Customs brokers work with importers on the ports. They make sure that the country’s customs department safely clears the goods their customers have imported. Moreover, they also make sure that all duties and taxes are paid to reduce delays.
Different countries have different customs brokers. To efficiently understand what a customs broker can charge, you need to understand some of the common stages they go through.
Understanding How Customs Brokers Charge
What’s a better way to understand how customs brokers charge than actually looking at what they go through? Here are some of the common things in the job description of a customs broker.
Correct identification of goods
The first and foremost job of the customs broker is to identify the goods correctly. As each country’s customs have different duties and tariffs, a customs broker identifies the good and sketch out the customs duty.
For instance, in the United States of America, Harmonized Tariff Schedule is the primary resource for determining tariff classifications to import goods in the US. A customs broker importing in the United States will have to use the Harmonized Tariff Schedule for correctly identifying the goods.
Customs brokers keep themselves up to date with the ever-changing customs tariff and tax schedule of goods.
Handling complex regulatory requirements
Next up, once the customs broker has identified the goods, it’s time to handle the complex regulatory requirements.
Regardless of the countries, every customs department worldwide has some complicated regulatory requirements. We can’t keep up with the customs requirements and involve ourselves in it as it’s a time-taking process.
Here’s a detailed outline of the customs duty information for international visitors in the US - and that’s not it. It’s a section only for international visitors; there are a different set of rules and regulations for the United States’ legal residents.
Help avoid unnecessary costs
Rules and regulations of the customs are ever-changing, and for an average person, it’s nearly impossible to keep up. This means that without sufficient knowledge, a person can end up paying unnecessary costs to customs.
As an international trade expert, a customs broker is heavily up to date on all the rules and regulations about the customs. This means that by trusting a customs broker, you can expect that they can save you from paying any unnecessary cost on your import.
Convenient paperwork
Paperwork is necessary for anything you are looking forward to importing and clearing from your country’s customs depart.
However, many individuals make mistakes when filling in the paperwork and providing the required documents. This leads to many problems and delays in the clearance of the goods, but a customs broker can help you conveniently do all the paperwork.
A customs broker will take the burden of handling paperwork from your shoulders and handle it on your behalf. From paying tax to identifying port duty and handling other taxation, a customs broker will do it all for you.
Skills for facilitating customs clearance
Customs brokers work like a bridge between you and the good you are importing. Without the bridge, you’ll have to do all the things manually.
Even if you have successfully filled all the requirements, rules, and regulations of the customs clearance process, you don’t have the skills to facilitate the process in-person.
As customs brokers are licensed personals, they have the required skill set to facilitate the customs clearance process efficiently.
Even if something goes wrong during customs clearance, with the experience and skills, a customs broker can easily handle the situation.
What Do Customs Brokers Charge?
All that brings us to the only question we are interested in, and that’s what do customs brokers charge?
Customs brokerage fees vary from company to company and country to country. A customs brokerage house that only covers a few responsibilities that we mentioned will surely charge less. However, a customs broker that will cover everything can charge a good amount of fee. US customs department facilitates the customers by providing the list of verified customs brokers on their official website with respect to ports.
Lastly, a simple google search of the local customs brokerage houses will help you compare and contrast the charges of different customs brokers near you.
Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring
Recently, a cold wave swept the United States and quickly plunged the southern state of Texas into disaster. In this unprecedented cold wave, more than 4 million people in the United States have suffered power outages, countless power plants have been destroyed, and electricity and natural gas prices have skyrocketed. ; At present, the price of electricity in Texas has increased by more than 100 times, up to 9,000 US dollars per megawatt, and the price of natural gas has skyrocketed by more than 160 times, reaching US$500, compared with only US$3 in the past; it is jaw-dropping.
Except for Texas, which is in a serious disaster, other states in the United States are not doing well. There are about 168 million people in the United States under the threat of this cold wave. Numerous airports have been suspended. According to data from the flight monitoring website "flightaware", Dallas and Houston , Austin area airports have cancelled more than 2,000 inbound and outbound flights on the 15th . Coupled with the new crown pneumonia crisis that is still raging across the United States, the United States is really miserable.
In terms of shipping, the Southern California anchorage is full of container ships, and the congestion continues to worsen ! The latest video released by the U.S. Coast Guard provides intuitive evidence of the congestion levels in Los Angeles and the Port of Long Beach. From the picture, a large number of container ships are moored at the anchorage in San Pedro Bay, California.
U.S. Coast Guard aerial scene
Data shows that the historic container ship congestion in California ports has not really eased. There are currently 63 container ships in Los Angeles and Long Beach, and 32 container ships are waiting for berths at anchorages. (On February 1st, the highest record of 40 container ships anchored at anchorage)
The Port of Los Angeles announced the number of berth days for a particular container ship through its Signal platform last week. Data shows that some ships stay at anchorage and wait for almost as long as they sail across the Pacific Ocean . For example, as of last Thursday, the 6332TEU container ship "Ever Envoy" has been parked for 11 days. As of Tuesday, the 9,400TEU "MSC Romane" has been parked for 12 days. And the three container ships of 11356TEU "CMA CGM Andromeda", 8452 TEU "Ever Liven" and 4888TEU "NYK Nebula" also berthed for 11 days as of last week.
As of the end of 2020, the number of container ships at anchor has increased to 30; since then, it has remained between 20 and 40. At the same time, the number of vessels at berths in Los Angeles and Long Beach remained at around 20 and 30. Kip Louttit, executive director of the Southern California Shipping Exchange, said: "We seem to have adapted to the new normal of about 30 container ships waiting in line every day. I don't know if this situation will continue."
As of Tuesday, the average time for ships docking in Los Angeles was 8 days , up from 7.3 days at the beginning of last week. From the information on the waiting time of ships provided by the platform from January 27th, the waiting time for ships to berth has been maintained for about one week, and the data for the last two periods has been extended to 8 days.
The latest data from the Signal platform: 20 ships at anchor, with an average anchoring time of 8.0 days. There are 14 ships waiting to be pre-anchored.
What caused the blockage? The extended berthing time of ships forced some shipping companies to cancel multiple voyages this month. This is not due to lack of cargo demand, but due to lack of available vessels to handle these services. Delays on land have also caused congestion at sea: extremely high inbound volumes and complex logistics inside and outside the port have caused delays on land. One of the challenges facing the port is the new crown virus infection of dockers and a serious shortage of labor.
Despite productivity gains last month, terminal operators at the Ports of Los Angeles and Long Beach said the ports may have to wait until the end of spring to get rid of the ship backlog and congestion that have plagued them in the past six months . The near-record number of containers will continue into the spring of this year, but the backlog of ships at the port and the fully loaded inbound containers at the terminal should disappear sometime between April and June.
The managers of SSA Marine, Yusen Terminals and Fenix Marine stated that in order to alleviate the congestion in the port, two projects to be developed are necessary. First, the COVID-19 vaccine must be widely distributed among dock workers to alleviate the recent labor shortage. During the Lunar New Year holiday this month, container traffic has declined moderately, which should also enable shipping terminals to remove the backlog of fully loaded imported containers from their facilities.
"The terminals are full and there is no place to put these containers. We deliver 35% less cargo (to truck drivers) than usual," said Ed Dannick, president of SSA Containers.
According to data from the HarborTrucking Association, the average truck stay at the terminal in January improved from 93 minutes in December to 88 minutes, but it was still much higher than the record low of 58 minutes in June. Imports peaked during the recovery period after the first wave of COVID-19 lockdown.
The backlog of ships in Long Beach, Los Angeles, is increasing unabated. According to statistics from the Marine Exchange of Southern California, there are currently 63 container ships in the Port of Long Beach in Los Angeles, of which 32 are at anchor waiting for berths and 31 are at berths.
The latest data released by the Pacific Merchant Shipping Association (PMSA) shows that in December last year, the average container stay time at the 12 terminals of the Port of Long Beach in Los Angeles was 4.99 days. This is twice the average length of stay (approximately 2.5 days) recorded by PMSA in the first half of 2020.
“The longer the container stays at the terminal, the more serious the congestion will be. When the container piles up like a mountain, the congestion creates additional and inefficient handling requirements,” said PMSA’s government affairs manager jessicaalvarenga.
The new crown epidemic hits labor in the port
According to the Pacific Maritime Association (PMA), the West Coast port employers' Association and the International Terminal and Warehouse Union (ILWU), the new crown epidemic has severely affected the labor force along the Los Angeles-Long Beach Port. As of January 17, The International Terminal and Warehouse Union (ILWU) reported that 694 of its members tested positive. By January 25, this number jumped to 803.
PMA stated that there is a particular shortage of skilled equipment operators, who need to remove containers from trucks, and then move them into and out of the container yard, which is critical to the operation of the terminal. As a result, the joint committee of PMA and ILWU, which is responsible for allocating workers to the docks on a daily basis, cut the allocation share.
"It boils down to the labor issue at the terminal," said Scott Weiss, vice president of business development at Port Logistics Group, which has a large number of truck and warehouse operations throughout Southern California. "Containers still have bottlenecks in and out of the terminal."
The latest information released by the Signal platform of the Port of Los Angeles shows that due to the new crown epidemic, the productivity of coastal labor has decreased, which has caused ship delays and the average delay of port facilities is 8.0 days .
These ports are working with trans-Pacific shipping companies to reduce Southern California's load until the volume returns to normal. Gene Seroka, executive director of the Port of Los Angeles, said that he is working with shipping companies and terminal operators to "measure" imports until the port catches up. Hapag-Lloyd (Hapag-Lloyd) has announced the opening of a structured route to Southern California in February, and CMA CGM will remove Los Angeles from the trans-Pacific route and use Oakland as the first port of call from Asia. , Followed by Seattle-Tacoma.
The terminal operator said that when workers throughout the supply chain are vaccinated and imports drop, the congestion in Long Beach, Los Angeles, will disappear.
Spring recovery?
Alan McCorkle, President and Chief Executive Officer of Yusen Terminals in Los Angeles, said that in the past six months, the container throughput of these terminals was close to record levels, but there was no overall congestion. This fact shows that if the peak season does not last for six consecutive months, they will have Ability to handle peak season cargo volume. He expects to return to normal in May or June.
Scott Schoenfeld, general manager of Fenix Marine Services in Los Angeles, said that Fenix is showing signs of improvement, so he is optimistic that congestion may be eased as early as April . The density of containers in the yard is not as high as late last year, and more truck drivers are able to transport containers every day.
However, container traffic is still rising, and as overloaded ships continue to arrive in Southern California, this trend will continue until at least next month. NVOCC consultant Jon Monroe said that the eastbound transpacific shipping company has deployed or will add 10 additional loading vessels in February, all deployed at the Port of Los Angeles-Long Beach. Judging from the latest data from the Los Angeles Signal platform, there was another peak in the surge in volume in the eighth week.
Volume surged in the eighth week
Jon Monroe pointed out that although more Chinese factories will continue to maintain at least part of their business this month to clear the backlog of merchandise orders compared to previous years, the total volume of the East Pacific trans-Pacific region should be greater than the previous six months. Months are less.
Scott Weiss, vice president of business development at Port Logistics Group, said that the 1.8 billion square feet of industrial and distribution space throughout Southern California is not fully loaded, just like last fall before the holiday season merchandise was transferred to stores across the country. However, the availability of space in warehouses and distribution facilities has been mixed. "Some warehouses are in a mess now, others are working well. I think the ratio is about 50-50,"
Scott Weiss said that productivity has generally declined, and warehouses across the region are experiencing labor shortages due to the new crown epidemic, but at the same time, freight volumes are still exceptionally strong. "Everyone I contacted is experiencing record sales and growth, but everyone is working hard to cope."
Weston LaBar, CEO of the Port Transportation Association, said that the current truck capacity is tight, and the availability of workers at both ends of the truck driver's route, the terminal and the distribution warehouse, has been challenged . However, when workers feel safe, they return in large numbers. LaBar said: "The most effective thing we can do right now is to vaccinate."
For most of 2020, the Port of Los Angeles has been struggling to deal with the problem of container surplus. Now that there has been a dramatic turning point, the Port of Los Angeles has also experienced a shortage of containers.
According to the latest statistics from Container xChange, a professional organization in the container monitoring field, the Container Availability Index for 40-foot containers in the Port of Los Angeles has dropped to 0.29.
Container xChange’s marketing director explained: “In the 49th week of 2020, the port’s availability index value for 20-foot containers and 40-foot containers plummeted to 0.27. Compared with the average index from week 1 to week 8 of 2020, these two Both containers dropped by 57%."
It is understood that when the container availability index is 0.5, it represents market balance. If it is less than 0.5, it represents a shortage of containers.
This means that the Port of Los Angeles has a serious shortage of containers.
In the previous Port of Los Angeles, due to the large increase in import volume and the epidemic factor, the port was congested on a large scale, and the efficiency of container turnover was very slow. At the peak, 10,000-15,000 containers were stranded at the terminal, and normal operations were severely affected.
According to a research report jointly issued by Container xChange and FraunhoferCML, a maritime logistics research organization, in the third quarter of 2020, there will be approximately 1.5 million containers in the United States with a turnover time of more than 115 days, while the normal average time should be less than 80 days.
Previously, due to the large backlog of containers in the Port of Los Angeles affecting the supply chain, liner companies conducted large-scale empty container deployment to ensure the normal operation of trans-Pacific routes.
As empty containers continue to be shipped back to the Asian market, the situation at the Port of Los Angeles has undergone a dramatic turn.
The industry also analyzes that the current shortage of containers in the Port of Los Angeles is related to the serious port congestion, the imbalance of market supply and demand, and the labor shortage caused by the outbreak of the Los Angeles Port.
Container xChange CEO Johannes Schlingmeier previously stated that since the summer of 2020, the U.S. container transportation supply chain has been under pressure, and the Port of Los Angeles is facing labor shortages caused by the outbreak of the new crown pneumonia epidemic.
Lars Jensen, CEO of Sea Intelligence, an industry consulting firm, believes: "The main reason for the lack of containers is port congestion."
Regarding when the container shortage will be resolved, Container xChange predicts: "In the next few weeks, as every link in the trans-Pacific route supply chain will face tremendous pressure, container supply will fluctuate further."
Nerijus Poskus, vice president of shipping at Flexport in the United States, believes that the shortage of containers may improve in the second half of 2021.
Lars Jensen said that the lack of containers in the Port of Los Angeles should be resolved before the summer of 2021.
He further explained: "After the international financial crisis in 2008, we also experienced a shortage of containers. The shortage of containers in 2010 took about 3 months from the appearance to the resolution. If we put it now Under the same background, it means that the current lack of containers in the Port of Los Angeles may also be resolved soon."
The air cargo market has ushered in a new year, but there is no sign of cooling. International transportation activities usually weaken after the holiday season, but due to the unusual air transportation mode and the severe shortage of air transportation caused by the new coronavirus pandemic, demand and freight rates remain high.
The logistics company expects that the air cargo volume will not decline before the Spring Festival, because the manufacturer plans to continue operations during the traditional holidays.
The latest comprehensive statistics of World ACD and CLIVE Data Services in December show that compared with 2019, air cargo volume has fallen by only 3.7% to 5% respectively. These data show that the air cargo industry has recovered a lot since it bottomed out in May last year, when demand dropped by nearly 40%.
The demand for air transportation is largely driven by continuous inventory replenishment, the inventory-to-sales ratio of consumer goods is close to the lowest level in history, and a saturated marine container market. Analysts and logistics providers said that the congestion of ports and railways and the shortage of empty containers continue to push up shipping prices and cause serious delays, especially for main routes from Asia, which promotes a further increase in aviation demand.
The goods sought for air transportation include automotive equipment, consumer goods purchased online, and medical supplies related to COVID-19. Airplanes are also used to transport the new crown vaccine, because a large number of vaccines are transported by land, and sometimes only a few containers are needed for each flight, so it is not clear how many ordinary goods they replace. Nevertheless, when the capacity is tight, the vaccine will be given priority to board the plane.
San Francisco-based freight forwarding company Flexport said in a customer advisory update report that the remaining demand for game consoles and smartphone product releases in the fourth quarter will increase capacity constraints by mid-February.
Bruce Chan, vice president of global logistics at investment bank Stifel, said in a monthly comment that shippers are also more inclined to use air operations as an inventory buffer because their forecasting models have been completely overturned by the epidemic. He wrote: “Predicting consumption patterns and when they will stabilize is a huge fear, and the path forward is hardly linear, especially when the new coronavirus reignites and the government further implements blockades and border closures.”
In addition, many Chinese manufacturers announced that they will continue production during the Lunar New Year period from February 12 to 26. Factories are usually closed for 10 days or longer so that workers can celebrate with their families, but because the Chinese government encourages workers to celebrate the New Year on the spot, many factories will continue to operate this year. Flexport said this could create a backlog, as many freighter flights were cancelled a few weeks ago due to the expected full transport. Any backlog will depend on whether the factory continues to produce or take vacations at home.
The demand for air freight is so strong that experts predict that by the end of March the market will return to the level before the epidemic. This trend is in sharp contrast to the passenger traffic of the aviation industry, which is expected to remain sluggish until vaccination becomes more common in the second half of the year. Even then, the recovery of international travel may be slower, which means fewer aircraft for long-distance trade. Aviation industry officials said they don’t expect a full recovery until 2024.
Globally, freight rates are more than twice what they were a year ago, and freight rates from China to Europe and the United States are 2.5 times what they were a year ago. According to data from digital sales platforms, market information services and freight forwarders, the aircraft on these routes are full.
According to World ACD data, the average freight rate soared by 80% in December last year, from US$1.80 per kilogram to US$3.27 per kilogram, the highest year-on-year increase since May last year, but it fell by 10% since January this year.
Freight rates are under tremendous pressure, because although more all-cargo operators have added freighters and flights, global capacity is still about 20% lower than 2019 levels. The main culprit is the insufficient supply of wide-body passenger aircraft on international routes, most of which are still grounded due to the poor travel market. In fact, with the strict implementation of travel restrictions, airlines will reduce flights in the first quarter. For example, Air Canada and WestJet suspended 25% and 30% of their system capacity in the first quarter.
According to data from the International Civil Aviation Organization, the global all-cargo fleet increased by 22.4% to 673 aircraft in 2020. Airlines continue to increase capacity, including improved aircraft from passenger airlines, but this is not enough, because the space shortage is three to four times the decline in demand, and the gap may be even greater in the short term.
In the past month, Qatar Airways has added three Boeing 777 freighters to its fleet, and China Airlines and AirBridgeCargo have each added a factory-built aircraft. Swiss International Air Lines has added Seoul, South Korea and Lima, Peru to its cargo network. The flight from Zurich will be operated by a 777-300 extended-range passenger aircraft dedicated to cargo. The flight from Zurich will be operated by a 777-300 extended-range passenger aircraft dedicated to cargo.
In the past year, many freight forwarders have greatly increased the use of dedicated charter flights to ensure that they can provide transport capacity to their customers. German logistics giant DB Schenker significantly expanded its private aviation network last week. Now it has two routes, connecting Europe, Asia and North America for the first time. The cargo management company controls a total of 43 Boeing 747 or 777 freighter flights every week-equivalent to the space of a 135 wide-body airliner. Munich Airport is the hub for DB Schenker's intercontinental cargo between the United States and Asia.
In 2020, the new crown pneumonia virus has swept the world, and people are shrouded in the haze of the epidemic. However, with the advent of the New Year, the epidemic has not eased, but has worsened in many countries. It can be seen that the global anti-epidemic situation is extremely severe.
Current situation in China
The most severely affected area in China is Hebei Province. As of 24:00 on January 11, 2021, Shijiazhuang and Xingtai have screened a total of 364 positive cases.
Regarding the epidemic in Shijiazhuang, Zhang Wenhong, a well-known Chinese expert, said about the epidemic in Shijiazhuang: The recent epidemic in Shijiazhuang has obvious clustering characteristics, and it can be controlled within a few weeks or a month before it reaches the stage of dispersion. We are confident about this.
With the approach of China's most important Spring Festival, many people worry that the epidemic will affect Chinese suppliers. Will it have an impact?
Industry insiders indicated that unless we see other major epidemics in mainland China, we can expect most factories to produce normally. It must also be mentioned that the Chinese government has introduced a series of measures to prevent the spread of the epidemic.
• Epidemic prevention measure 1: vaccination
According to reports, as more and more new crown vaccines around the world are approved, experts predict that the new crown epidemic will improve or be brought under control. The good news is that China's State Food and Drug Administration has approved three new coronavirus inactivated vaccines for the market, which will mean that domestic large-scale vaccination may begin quickly.
According to the national plan, the new crown vaccination plan will be divided into two steps. The first step is to vaccinate key populations, including: staff engaged in import cold chain, port quarantine, ship piloting, aviation air service, fresh food market, public transportation, medical disease control and other high risk of infection, and going to medium and high risk countries or regions People who go to work and study.
The second step is to achieve gradual universal vaccination. Based on the vaccination of high-risk groups and key groups that has been carried out and is being carried out, my country will gradually and orderly promote the vaccination of the elderly and high-risk groups with underlying diseases, and follow-up vaccination for the general population.
There may be differences in the specific plans for appointment vaccination between provinces. For example, according to the Weibo news of “Sichuan Release”, the first vaccination of key populations is expected to be completed before January 15 and all doses will be completed before February 5. Times of vaccination.
In this regard, you can explain to the customer like this:
China has begun a nationwide drive to vaccinate some 50 million front-line workers against the coronavirus before the Lunar New Year travel rush next month.
Before the peak of the Spring Festival travel season next month, China has begun to promote the anti-coronavirus vaccine for nearly 50 million priority people nationwide .
China has officially started vaccination to high-risk population since December 15, 2020, and the Chinese authorities said it has administered 9 million doses around the country, proving that the Chinese vaccines are safe. It is expected that China is highly likely to ensure a domestic vaccines capacity of more than 2 billion doses in 2021 to meet the target of at least 70 percent of Chinese get vaccinated to achieve herd immunity.
Since December 15, 2020, China has officially begun to vaccinate high-risk groups. Chinese authorities have stated that 9 million doses of vaccine have been vaccinated nationwide and these vaccines are safe. In addition, China is likely to ensure that its domestic vaccination capacity exceeds 2 billion doses in 2021, so that at least 70% of Chinese people will be vaccinated to achieve the goal of herd immunity.
In addition to vaccines, the Chinese government this year also encouraged migrant workers to "unnecessarily not return to their hometowns and celebrate the New Year on the spot."
• Epidemic prevention measures 2: Call for the New Year on the spot
As the Chinese New Year (February 12 this year) is approaching, many people who work abroad are ready to return to their hometown for the holiday. Zhu Wenzhong, deputy director of the passenger transportation department of China National Railway Group, said that during the "Spring Festival" period from January 28 to March 8 this year, 407 million trips are expected, which will be 93% higher than last year (because of the outbreak in Wuhan last year) Interrupt).
In addition, due to the fact that the local epidemic situation in my country is spreading at multiple points and local clusters are intertwined and superimposed. The State Council's Joint Prevention and Control Mechanism Comprehensive Team recently issued the "Notice on Doing a Good Job in the Prevention and Control of the New Coronary Pneumonia Epidemic During the New Year's Day and Spring Festival of 2021", pointing out that migrant workers should be guided to stay at the construction site for the New Year when conditions permit. Beijing, Shanghai, Anhui, Henan, Shandong and many other places have recently issued recommendations not to return to their hometown if they are not necessary during the Spring Festival, encourage flexible vacations, and advocate non-necessary not to leave their work place and celebrate the holidays locally.
At present, many local governments have issued notices calling on people to stay at work to prevent the spread of the virus, and the China National Railway Corporation announced that any train tickets booked before January 7, 2021 can be refunded.
In this regard, you can explain to the customer like this:
China's cabinet has also urged employers to be flexible about this year's Lunar New Year break. "In a bid to prevent transmission and control the pandemic, we encourage companies and enterprises to make flexible arrangements for the holiday and guide employees to spend the vacation in the area where they work," the State Council said in a notice recently.
The State Council of China also recently issued a notice stating that it encourages business owners to implement flexible vacations, and advocates not leaving their work place if necessary and spending holidays on the spot.
Many local governments have issued notices this week calling on people to stay home to prevent the spread of the virus, prompting China State Railway to announce that any train tickets booked before Jan.7th could be refunded.
Many local governments have issued notices this week calling on people to stay at home to prevent the spread of the virus, prompting the China National Railway Corporation to announce that any train tickets booked before January 7 can be refunded.
So, in addition to telling customers the latest information about the epidemic in China and related measures, what do foreigners need to do? That is: take advantage of the situation to remind orders.
•Use the opportunity to remind orders
According to a report by Global.com, due to the approaching Chinese New Year, companies from various European countries have recently imported Chinese goods on a large scale. They said: When the Chinese have a rest for the Spring Festival, we will not be able to buy anything even if we have money! It is worth mentioning that most of the sudden increase in orders are medical items related to epidemic prevention.
In addition, the German weekly "Der Spiegel" recently reported that as the Chinese New Year is approaching, European traders are beginning to worry about the suspension of production in Chinese factories, the bottleneck in logistics, and the continued increase in prices, and they are speeding up the booking of Chinese defense products.
Faced with such a situation, the People's Congress of Foreign Trade can take advantage of this situation to urge orders. Generally speaking, before the Spring Festival, we will send notices to our customers to inform them of the time when the factory will stop production and the time to start work after the year, so that customers can be prepared. However, this year’s situation is special. Due to the impact of the epidemic, the delivery time is longer than before, so we can advise customers to arrange their orders in advance.
In this regard, we can say this:
The delivery date might be longer, so we suggest you placing order at an earlier date, then we can occupy the production line for you and deliver goods at an earlier time. In addition, you can grab the market share earlier. Now we are still receiving orders every day, if you have pending orders, please hurry up.
Due to the impact of the epidemic, the delivery time is longer than before, so it is recommended that you place an order in advance. So we can help you arrange production as soon as possible and deliver as soon as possible. After you receive the goods as soon as possible, you can occupy the market share in advance. In addition, many customers are placing orders now, so if you have a demand, please place an order as soon as possible.
Mozambique is a country in southern Africa. At present, there is no direct flight between China and Mozambique, and Chinese citizens can transfer to Mozambique via South Africa, Ethiopia, Kenya and qatar. The Bole International Airport air traffic hub in Africa, many African countries went to other passengers in transit.
Ten city of Mozambique, Nampula, Maputo, Bella, Peng Ba Whelan, Kulusi Tete, Inhambane, Chris Mane, etc., Chimoio Lichinga airport. Which Maputo is the capital of Mozambique, located at the southern tip of Mozambique, near the India Yanmar Maputo Bay, is not political, economic and cultural center, the country's largest city. Maputo port is one of the major ports in East africa.
Maputo International Airport (IATA Code: MPM; ICAO Code: FQMA) is a civil airport 3 kilometers northwest of Mozambique, capital of the Republic of Maputo. Main international, regional and international demand of passenger and freight transport business, many waypoints to the main city of African countries and region, and the Portuguese airline to fly to Lisbon flights, Qatar Airlines operating flights to Doha.
Chinese cargo flights to Mozambique Maputo many, Qatar Airways, Ethiopia airlines, Turkey airlines, South African Airways have flights to Guangzhou, Hongkong, Shanghai, from the start, Beijing, aged 5-7 days. Hongkong to Maputo air freight about RMB40/1000KG+, the volume of goods is not recommended to go, suitable for the value of high, aging requirements of high goods.
Cargo price usually by air freight, fuel surcharge, war of three parts, logistics Baba cargo price is mainly composed of air freight charges, documentation fees, operating fees, manifest pre recorded fees, fuel surcharges. Customers can also add custom declaration, insurance and other value-added activities according to their requirements.
Air freight forwarding is the general freight forwarding to the airport, the customer needs to go to the airport, their own customs clearance and delivery, if the need for customs clearance, the cost is relatively high.
Exports to Mozambique ordinary no special requirements, but the foreign customs tax is serious. The raw material tariff is 2.5%, the fixed assets (class K), the tariff 5%, the tariff for the assembled goods is 7.5%, and the consumer goods is 20%. Customs clearance requirements, packing list, invoice, bill of lading, PSI inspection, certificate of origin, etc.. The government has stopped exporting pornographic and pornographic books and periodicals, film and television, posing as commodities, pirated goods and goods of false origin.
Search air network Maputo air transport, low-cost transit, can receive general cargo, bulk cargo, wooden boxes need to be hit. Airline one to one follow-up, cargo tracking, higher security. From China's air transport export to Mozambique, according to customer requirements, layout, door-to-door, and delivery of the destination.
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.
If shippers and logistics companies hope that the ultra-high shipping container prices will fall in the New Year, then they may be disappointed.
Rolf Habben Jansen, CEO of shipping company Hapag-Lloyd, revealed at a press conference that global logistics giants and container liner companies expect that the chaotic market, lack of berths, and container shortages, etc., will still be available by 2021. Will last for a while.
In addition, Tim Scharwath, CEO of freight forwarding giant DHL Global Freight Forwarding, also attended the meeting. What the two CEOs have in common is that they agree that 2020 is characterized by great unpredictability, such as promising customers whether their goods will reach their destinations on time, which is very unpredictable.
As time goes by and the year is coming to an end, shippers have to pay more and more freight to ship the goods. This development is largely due to the sharp increase in demand month by month since July. For example, it is not uncommon to have to pay US$5,000 for shipping containers from Hong Kong to New York.
▍It will not stabilize until the second half of 2021
The two executives agreed that after the outbreak of the new crown pneumonia this spring, the very special environment has caused a historic imbalance between supply and demand. They also believe that the shipping market will not stabilize for the time being.
Scharwath said: "As for shipping, I think we must enter the second half of 2021 before we see the market stabilize again. The first quarter will definitely be affected, and so will the second quarter."
"We will have to wait and see what happens, because everything is difficult to predict. As a large company, we usually make plans for 3 to 5 years. Now, we are making plans for 3 months."
Inadequate ship capacity and insufficient containers have serious consequences for the industry’s supply chain. In addition to customer dishonesty and record high freight rates, a recent survey conducted by Sea-Intelligence shows that only half of the ships can reach their destinations on time .
▍Shipping companies strengthen management and control
Mainly affected by the new crown epidemic, container shipping companies’ performance in the second quarter was weak, but their profits have soared to record levels since the summer. However, the quality of service is lacking, and container shipping companies have been stating for months that these conditions are beyond the scope that they can change.
On the one hand, they do not have more ships to deploy, on the other hand, they cannot redistribute the containers to the required ports. In addition to other reasons, customers do not return the goods.
Currently, Asia in particular is suffering from a shortage of containers because many containers are in the United States. According to a Bloomberg report, it may also be because of port congestion that these containers cannot be unloaded at US ports. This is the case with 20 container ships currently near the Port of Long Beach.
Therefore, at the beginning of December, CMA CGM, Maersk and ONE had to refuse to leave the booking outside of Asia, the reason is very simple, because there is no extra space on board.
Hapag-Lloyd, led by Habben Jansen, also benefited from the increase in freight rates in recent months. Therefore, the shipping company has twice raised its full-year 2020 profit forecast, and the company currently expects its operating results to exceed US$2.7 billion.
However, the CEO said that it is usually because of an oversupply of ships, and 10 years after the industry has lost billions of dollars, it is time for container shipping companies to start making money.
▍Strong performance in the second quarter of next year
Until recently, shipping companies and container manufacturers also predicted that the current shortage of containers will be resolved after the Chinese New Year in February, which will restore the market to a more normal state. But Habben Jansen no longer believes this prediction is correct.
"This year’s development is beyond everyone’s expectations. Because of the introduction of economic stimulus measures, people still have money on hand, and most of the money has been spent on container cargo. Many signs indicate that the strong market we see after the Spring Festival has passed. It will appear and will continue into the second quarter."
Habben Jansen pointed out that the current market congestion will take some time to resolve.
Price is only an indicator in the process of purchasing a product or service . If you simply compare prices, it is not so thoughtful. Price, quality, service, word of mouth, suitability for your own situation, etc. all need to be considered together.
General cargo aircraft air valence is usually divided into M, N, Q stage, wherein the stage is divided into Q + 45, + 100, + 300, + 500, + 1000, such as different levels - greater the weight, the rate cheaper . M stands for MinimumCharge. The lowest freight is also called the minimum freight. It is the lowest freight that airlines can accept for handling a batch of goods. N means NormalRate, which generally refers to a price less than 45KGS. To apply this freight rate, two conditions must be met at the same time: 1) It must be under 45 kg; 2) It must be ordinary goods-if the specified commodity freight rate is applicable, or the applicable grade The freight rate is not applicable to this freight rate, so N will also be marked as -45KGS. Q means QuantityRate. Q freight rate is the most common in actual shipments. Generally, air freight is mostly higher than 45 kg. If it is lower than 45 kg, general express is fine. Customs clearance is quick to return to the door and the speed is also Not bad.
Freight ForwardingHow does the company count as international Air freight? What constitutes air freight
Air freight rate composition:
1. Airfreight freight (charged by airlines)
2. Fuel surcharge (according to the airport, the price of the destination point is different, Hong Kong now generally the first 4 yuan, before 3.6, last year the highest 4.8, the price is adjusted by the airport, generally 2 yuan to Asia)
4. Airport operation fee (HKD283/ticket for Hong Kong, the airport is responsible for transporting goods on the plane, etc.)
5. Terminal fee: 1.72/kg When the goods are handed over to the dealer, the dealer is responsible for the boarding and other things, which will eventually be collected by the airport)
6. Air master bill fee: HKD15/bl is the bill of lading fee-proof of title.
The above is the " How does a freight forwarding company calculate international air freight? " compiled by the editor of Taijie International Logistics . What is the air freight rate? The detailed content, I hope it can be helpful to everyone. Now it is during the peak season of National Day. If you want to ship by air, you need to make an appointment in advance, and your goods can be shipped by air if they are more than 45 kg. Delivery from different places will also affect the calculation of air freight costs, but generally there will not be too much difference. You can consult several freight forwarding companies in Shenzhen to find out.
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.
