The container throughput of global ports continued to increase in October, with a total volume of 15.2 million TEUs that month. So far in 2020, the container throughput has reached 137.7 million TEUs, which is only 2.7% lower than in 2019.
The off-season is not "light"
The latest data from Container Trades Statistics (CTS) shows that the traditional freight off-season in 2020 will not be "light", and the performance will exceed expectations, and the market demand will continue until the fourth quarter . In October, the trans-Pacific shipping volume dropped by 4% from September to 2 million TEUs, but it was still a quarter higher than the same period in 2019. The demand is so great that although operators have been increasing capacity, there is still a gap.
Demand on the Asia-Europe route has also recovered, although its performance is not as strong as the Pacific route. In October, the shipping volume of the Asia-Europe route was 1.4 million TEUs, an increase of 7% over 2019. However, from the perspective of the whole year, the 13.9 million TEUs so far in 2020 is still 7% lower than 2019.
Equipment gap is nearly 1 million TEU
The Asia-Europe route is currently facing the same problem as the Pacific route, that is, the shortage of container equipment and capacity keeps the freight rate at a high level. Sea-Intelligence analysts said that the problem of container shortages is very difficult. The imbalance of east-west traffic on the Pacific route has made the shortage of equipment worse . The current North American imports account for most of the global increase in shipping containers, while North American exports have Weakening. Under normal circumstances, the imbalance of east-west shipping volume will usually cause a monthly deficit of about 2.5 million TEUs in Asia. This gap is filled by empty containers from other regions . But in October 2020, this number soared to 3.4 million TEUs, which means that the equipment gap has reached nearly 1 million TEUs.
Sea intelligence believes that the lack of empty containers is the primary problem faced by shippers. However, this problem is currently difficult to solve, and there is no way to quickly mobilize 1 million additional empty containers, especially when many ports are currently facing congestion. Analysts predict that this situation will continue until at least early February 2021.
Businesses that engage in international transport most likely prefer freight forwarding, but it is also an applicable method of transport even for personal use. The freight forwarding companies facilitate the shipment of goods to the destinations by using various carriers such as road freight, air freight, railway freight, and ocean freight.
If you don’t have any idea about freight shipping, you’ll find freight forwarding intimidating. Thus, if you engage in a business that involves international transport, it makes sense to understand the facts about freight forwarding.
WHAT ARE FREIGHT FORWARDING FIRMS?
Transporting goods from its origin to another destination is one of the services of freight forwarding firms. The freight forwarder works as a middleman between the transportation services and the shipper. They are responsible for arranging the entire process including the storage and the shipment of the goods. Likewise, they also negotiate the cost of the transport and choose the most reliable, fastest, and economical route.
SERVICES OFFERED BY FREIGHT FORWARDERS
Hiring the services of freight forwarding companies is advantageous to your business. They can help you in transporting the goods to your customers. As they are knowledgeable and expert about shipping of goods, they ensure that the merchandise will be delivered on time and in good condition.
Some of the services that freight forwarders offer are the following:
Customs clearance
Insurance
Packing
International import and export documentation
Inventory management and
Storage
Through the services of freight forwarders, the entire process of importing and exporting of goods becomes less stressful. They can also assist you in the packing of goods, thus reducing the pressure from you.
CHOOSE A RELIABLE FREIGHT FORWARDING COMPANIES
If you’re thinking to hire a freight forwarder, make sure to choose well-established and reliable freight forwarding companies. This gives you the assurance that they have strong experience about the business and good network of contacts. Likewise, experienced freight forwarders can deal and solve any issues about the transport of your goods efficiently and quickly.
As you’ll entrust your goods or merchandise to a freight forwarder, it makes sense to work with them harmoniously. It’s not enough to seek the service of a company that you can rely on and trust, but also with outstanding customer service. This way, you’ll have peace of mind that your shipment will arrive on time and safely.
Before entrusting your goods to freight forwarding firms, make sure that all the documents for transporting the goods are completed.
After a further surge last week, the spot freight rate for containers from Asia to Northern Europe is now 130% higher than the beginning of the year, up 200% year-on-year. The Far East-Europe trade route is still under tremendous pressure, and the freight rate will continue to rise further.
In the current peak season, the influx of imported goods from Asia into the United States does not seem to have eased. Los Angeles and Long Beach are still in a state of collapse and paralysis. There are as many as 20 ships lining up near the west coast, waiting for the empty space in LA Long Beach Port to unload.
Australian ports remain congested, with more than 75,000 teu stranded in Sydney.
Freight rates in the Asian intra-route market remained stable, but from the same period last year, freight rates across Southeast Asia have increased by a staggering 390.5%.
Europe-to-land route : The North European spot freight rate of the Shanghai Container Freight Index (SCFI) just released by the Shanghai Shipping Exchange increased by 13.5% to US$2,374 per TEU, and the Mediterranean freight rate increased by US$165 to US$2384, spot The freight rate increased by 7.4%. It is worth noting that the year-on-year growth rate in Northern Europe was 196.8%, and the year-on-year growth rate in the Mediterranean was 209.2%. But in fact, the market freight rate is much higher than this.
A Shanghai-based non-vessel carrier said that several shipping companies are currently offering more than US$6,000/40-foot container to Rotterdam and more than US$8,000/40-foot container to the UK.
A freight forwarder in China stated that the carriers on this route are now purely focused on maximizing freight revenue, regardless of all other agreements. He said: "Shipping companies only give priority to higher-priced spaces-whoever pays more will get the space."
Christoph Baumeister, senior trade manager for Flexport Asia/ISC-Europe, said the situation for Asian shippers was “worse than week after week”. He added: "The Far East-Northern Europe/Southern Europe trade route is still under tremendous pressure, and freight rates will rise further this week."
Moreover, according to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe of three months or less is 200% higher than a year ago, at $4,831 per 40 feet.
Although Xeneta’s long-term contract freight data showed an increase of 28% to US$1,648 per 40 feet, it pointed out that despite the peak contract season, few deals have been concluded because shippers and carriers think it’s not the time.
In the trans-Pacific region , the spot freight rate remained basically unchanged last week and stabilized at a record level. According to SCFI data, the spot price on the west coast of the United States rose by US$68 to US$3947 per 40 feet, while the port price on the east coast fell by US$8. To $4,700 per 40 feet. The year-on-year growth rates of the West Coast and East Coast of the United States were 161.6% and 78.2%, respectively.
Since mid-September, due to the intervention of Chinese regulatory agencies, the spot market on this route has remained stable, and shipping companies hope to obtain guaranteed income from their premiums.
As the influx of merchandise imports from Asia into the United States during the peak season did not seem to ease, the Port of Los Angeles data confirmed that the port's imports in the 50th and 51st weeks increased by 37% and 54% year-on-year respectively.
The continued growth of imports has put tremendous pressure on the San Pedro Bay ports in Los Angeles and Long Beach. Freightos Chief Marketing Officer Eytan Buchman said: "There are reports that as many as 20 ships are lining up near the west coast, waiting for the unloading of empty spaces in the Port of Long Beach, LA. Retailers are eager to put these goods on the shelves before the holidays."
As for Australia and New Zealand routes , with the gradual improvement of the epidemic situation and the continuous growth of transportation demand during the traditional peak season, the market freight rate has increased. According to the SCFI index, the freight rate (sea freight and ocean freight surcharge) for exports from Shanghai to the basic port of Australia and New Zealand was US$2490/TEU, up 2.5% from the previous period. But the Australian shipping business is currently in a "state that has never been so bad."
The continued "chaos" in the Australian container supply chain will mean that some retailers' shelves will be empty during Christmas.
The impact of supply chain delays caused by the Maritime Union of Australia (MUA) strike in early October continues. The shipping company stated that the disruption of shipping schedules caused a backlog of "8 to 10 weeks" delays (8 weeks of delay means that retailers will not have inventory "until January of next year"), but the union denies that this is the reason. Rather, it points to the increase in demand during the peak season.
According to the Freight and Trade Alliance (F&TA), trade imbalances, resulting in a large surplus of empty containers and lack of storage areas for storing these containers, are still the main problems hindering the supply chain. F&TA Director Paul Zalai said: “Currently, it is estimated that the imbalance of containers is 75,000 teu, which is stranded in Sydney’s empty container yard and operator’s warehouse. The surplus of empty containers will cause Sydney’s logistics to fall from the current congestion state to an unsolvable situation. deadlock."
The peak season demand has increased the spot freight rate from China to Melbourne to US$2490, compared with US$1648 in mid-October. Paul Zalai believes that the country’s shipping industry has “never seen such a bad situation.” He explained: “Our ports are congested, services are limited, freight prices are at record highs, detention, congestion and terminal access surcharges continue to increase. "At the same time, similar shipping delays have also affected importers in the Tasman region. Due to the chain reaction caused by port congestion in Australia, the Port of Auckland in New Zealand experienced delays this year.
The market freight rates of intra-Asia routes also remained stable last week, but from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%.
Although these are eye-catching figures, it is important not to forget that 65% to 75% of all goods are transported on the basis of contract freight rates rather than spot market freight rates. However, due to the exhaustion of the number of contracts (many contracts are in unexpected periods when consumer demand is out of control) the rest tends to the spot freight market. When contract negotiations restart next year, the strong bull market will also benefit shipping companies.
Andy Lane of CTI Consulting in Singapore commented: “There is still one month before the new Asian-European contract. This is under the background of record-breaking spot freight rates. Prices may rise sharply, which will have a real impact on the market."
In the past few months, due to the severe shortage of available empty containers, the global supply chain has been hit, causing exporters to have a headache. However, new research shows that there is an obvious problem in the container supply chain-empty containers stay in warehouses for an average of 45 days, while in China, the average time for each idle container is more than two months.
The research project of German company FraunhoferCML and Container xChange shows that although China and the United States urgently need containers, the average residence time of empty containers in warehouses is 61-66 days, which is much higher than the global average of 45 days.
The east coast of the United States is usually the location of surplus container equipment (the 40DC container availability value was 0.7 last year), but the container availability rate dropped to 0.43, indicating that there are actually fewer containers than needed.
The researchers said that compared with the Middle East (21 days on average) and Europe (23 days on average), the high standard deviations of 85 days in North America and 129 days in Asia indicate that in many cases, containers stay in warehouses longer than average. Much more.
Container xChange is a platform that connects users and suppliers. The platform stated that the availability of containers across China is still at a record low, while the surge in shipping containers from Asia has overwhelmed US ports, and retailers are eager to put their products on the shelves.
Not only is there a serious shortage of 40-foot tall containers (hc) in the shipping market, but there is also a shortage of 40-foot standard containers, and even 20-foot containers are sometimes in short supply.
The container availability rate of 40HCs is only 0.05 CAx (container availability rate) points, compared with 0.63 in the same period last year.
Asia's container manufacturing industry is working overtime to produce, which accounts for 45% of the global container manufacturing market. China International Marine Containers, the world's largest container manufacturer, announced an increase in its orders.
The factory is stepping up container building, and container orders have been scheduled to the first quarter of next year. Even so, the demand for millions of containers has made it impossible for container manufacturing to quench its thirst. The world's three largest container leasing giants have issued a warning that the shortage of containers will continue for four months.
Chinese shippers and freight forwarders all over the world "seeking" empty containers, but where did the empty containers go? The answer is simple, it is blocked in other ports.
While the Asian port and shipping industry is desperately desperate for empty containers, although there is a shortage of shipping capacity, price increases can be used to push shipping companies to cancel suspending, refilling, and increase shipping capacity; however, a large number of containers full of cargo are seriously stranded in European and American ports and warehouses. , Unable to move.
In order to alleviate the serious imbalance in equipment, shipping companies have adopted an active strategy for exports to Europe and the United States, suspending orders, and preferring to use as many empty containers as possible to fill return ships.
In fact, in order to prevent all but the most expensive goods, European exporters to Asia are required to pay more than $5,000 per 40-foot container to ensure shipment in December. A British freight forwarder said that many shipping companies now refuse to accept export orders before mid-January. "Our customers are willing to pay such a high freight, but due to port congestion, we are still working hard to get the boxes away. Some boxes have been on the dock for more than four weeks and still don't know when they will be shipped."
At the same time, the urgently needed empty containers in Asia are scattered in warehouses across Europe, especially in the United Kingdom, where troubled ports have to restrict container delivery to already overcrowded terminals.
The current shortage of containers is a once-in-a-century problem in the history of the global supply chain, and it is basically unsolvable in the short term.
Affected by the epidemic, more and more countries have been "closed" for the second time, and the ports of many countries have become full of containers. Lack of containers, exploded cabins, dumped containers, jumping into ports, and frantically rising freight rates, foreign traders are under unprecedented pressure.
The latest data shows that European freight rates have increased by 170% year-on-year, and Mediterranean freight rates have increased by 203% year-on-year. In addition, as the U.S. epidemic becomes more severe and air transportation routes are blocked, shipping prices will continue to rise.
With strong shipping demand and a large shortage of containers, shippers are facing soaring container freight and surcharges, but this is just the beginning. The market may become more chaotic in the next month.
Freight rates continue to soar, 170% in Europe and 203% in the Mediterranean
China's export container shipping market continues to be high. The freight rates of many ocean routes increased to varying degrees, and the composite index continued to rise.
On November 27, the Shanghai Export Container Freight Index released by the Shanghai Shipping Exchange was 2048.27 points, an increase of 5.7% over the previous period. With the increase in freight rates and surcharges, Asia-Europe shippers will face more pain.
Last week, the spot freight rate of containers from Asia to Northern Europe rose by 27%, breaking through US$2,000/TEU. The carrier plans to further increase FAK prices in December. The Northern European part of the Shanghai Container Freight Index (SCFI) rose by US$447 to US$2091 per TEU, up 170% year-on-year.
The price of SCFI at Mediterranean ports also surged 23% to US$2,219 per TEU, a 203% increase from 12 months ago.
For shippers in Asia and Europe, this pain of high freight rates shows no sign of ending. In addition to the large surcharges and premium product fees currently charged to ensure on-board equipment and space, freight rates will be further increased next month. .
On the return route, the situation of European exporters can be said to be worse; it is reported that they cannot secure bookings to Asia at any price before January.
Continuation of the high market, the overall freight rate continues to rise
The continued shortage of containers has further exacerbated the lack of capacity in the market, and the freight rates of most routes have increased, which has pushed up the comprehensive index.
On the European route, the capacity continues to be insufficient, and most of the flight booking rates have risen again.
For North American routes, the market supply-demand relationship remained at a relatively good level, and the spot market freight rates were high and stabilized.
On the Persian Gulf, Australia and New Zealand routes, and South America routes, the demand for transportation is strong, and the market freight rates continue to rise, rising by 8.4%, 0.6% and 2.5% respectively in this period.
European routes have strong transport demand. The repeated epidemics in Europe have stimulated local import demand, and the market volume has remained high. The tightness of airline capacity is still increasing, and the contradiction between supply and demand has not been alleviated. Last week, the average space utilization rate of ships in Shanghai Port basically remained at the full level. Affected by this, most airlines will raise their freight rates at the beginning of next month, and the spot market freight rates will rise sharply.
On North American routes , the new crown epidemic in the United States is still severe. The cumulative number of confirmed cases and the number of new cases in a single day are still top of the list. The severe epidemic hinders the unpacking and transshipment of materials. The market capacity is relatively stable, but the market capacity is limited by the ever-increasing shortage of containers, the upside is limited, and the supply and demand conditions remain unchanged. Last week, the average space utilization rate of ships on the US West and East US routes at Shanghai Port was still close to full capacity. The route freight rate remained stable, and the spot market booking price was basically the same as the previous period.
For the Persian Gulf route , the market performance is generally stable, demand remains stable, market capacity is controlled within a relatively reasonable range, and the relationship between supply and demand remains balanced. Last week, the utilization rate of the shipping space of Shanghai Port remained above 95%, and individual flights were fully loaded. Most commercial airlines maintained their freight rates unchanged, and a few adjusted slightly, and the spot market freight rates rose slightly.
For Australia and New Zealand routes , the destination market is in the peak transportation season, transportation demand is rising steadily, and the relationship between supply and demand remains good. Last week, the average space utilization rate of ships in Shanghai Port remained above 95%, and most flights were fully loaded. Most airlines have maintained their booking prices at the previous period, but some have slightly increased, and the spot market freight rates have increased.
For South American routes , South American countries have insufficient capacity due to the epidemic, relying on imports for a large number of materials, and transportation demand continues to run at a high level. In this period, the average space utilization rate of ships in Shanghai Port was close to the full-load level. Under these fundamentals, most airlines increased their booking prices towards the beginning of the month, and the spot market freight rates increased.
Major shipping companies will issue another notice of price increases in 2021!
▍Maersk charges a peak season surcharge from the Far East to Europe
Maersk announced that it has imposed a new peak season surcharge (PSS) in Europe and East Asia from December to next year.
Suitable for refrigerated goods from the Far East to Northern and Southern European countries. The surcharge will be $1000/20' reefer container, $1500/40' reefer container, and will take effect on December 15, Taiwan PSS will take effect on January 1, 2021.
Far East to Northern Europe
Far East to North and South Europe
The Maersk 2M Alliance partner Mediterranean Shipping Company (MSC) will use the following various (FAK) rates from Europe to Canada and Mexico.
• Carrier Security Check Fee (CSF): US$11 per container
• Emergency Fuel Surcharge (EBS) (when applicable): US$500 per refrigerator, US$100/TEU per dry container
In addition, MSC has made the following rate adjustments from December 1, 2020 until further notice, but not more than December 31, 2020.
▍ CMA CGM
CMA CGM, the world's third largest container shipping company, has started the new year and will introduce the latest FAK rates from Northern Europe to Canada, the east coast of Mexico, the east and west coasts of the United States and the Gulf of Mexico.
• Cargo: dry containers, reefer containers, tank containers and special equipment
• Cargo: dry containers, reefer containers, tank containers and special equipment
• Cargo: all types
• USEC, US Gulf and USWC include New York, Norfolk, Savannah, Charleston, Houston, Miami, New Orleans and Oakland.
From January 1, CMA CGM will also implement the following FAK rates for dry containers, reefer containers, open containers, pallets and shipper-owned containers (SOC).
▍Hapao features GRI rates from East Asia to the United States and Canada
Effective date: January 1, 2021.
This increase applies to all dry containers, reefer containers, non-working reefer containers, tank containers, frame containers and open top containers.
East Asia to North America (United States and Canada):
USD 960 for all 20' container types
USD 1,200 for all 40' container types
East Asia includes countries/regions in Japan, South Korea, China/Taiwan/Hong Kong/Macau, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia, the Philippines and Russia’s Pacific Rim provinces.
In addition, Hapag-Lloyd also released new (GRI) rates for all dry containers, reefer containers, non-operating reefer containers, storage tanks, frame containers and open top containers from South Asia and Northeast Asia to Australia , Effective from January 1st.
Southeast Asia to Australia
• US $ 150/20'
• US $ 300/40'
Northeast Asia to Australia
• US $ 300/20'
• US $ 600/40'
Southeast Asia includes Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, while Northeast Asia includes South Korea, China, Hong Kong, Macau, and Taiwan.
According to current market conditions, Hapag-Lloyd will increase the GRI rate for all cargo and all container types from East Asia to the East Coast of South America from December 7, 2020, to USD 550 per container.
Hapag-Lloyd announced the rates for all 20' and 40' (high container) goods in the westbound trade from East Asia (including Japan) to Northern Europe and the Mediterranean. The collection will start on December 15, 2020, and will be collected until further notice. Various cargoes (FAK) subject to marine fuel recovery (MFR):
The port is not the boss, the ship is not the boss, and the cargo is the boss. This is a "golden sentence" circulating in the port and shipping industry. However, the freight forwarder who has been busy in the front line of cargo booking may tell you that at this moment of chaos in this industry, the port is not the boss, the ship is not the boss, and the cargo is not the boss. You can't get the empty space if you grab the head. The box is the boss .
In recent weeks, due to a severe shortage of empty containers, some container ships sailing from Asia to Europe cannot even be fully utilized. A shipping source said, “Recently, we have to vacate some spaces because China does not have enough containers to meet freight demand.” Almost all transport companies have reported that they have a serious shortage of 40-foot high containers (hc) and 40 There is also a shortage of standard containers, and even 20-foot containers are sometimes in short supply.
The latest container availability index report from Container xChange shows that the availability of containers in various ports in China is at a record low. From the perspective of the container availability index, the index higher than 0.5 indicates a surplus of empty container inventory, and lower than 0.5 indicates a shortage of empty containers. The current availability of 40-foot containers in China is only 0.05 CAx points, compared with 0.63 points in the same period last year .
Chinese shippers and freight forwarders all over the world "seeking" empty containers, but where did the empty containers go? The answer is simple, it is blocked in other ports.
While the Asian port and shipping industry is desperately desperate for empty containers, warehouses across Europe, especially in the UK, are filled with "immobile" boxes in troubled ports and overcrowded docks.
Affected by the epidemic, shipping companies have used methods such as suspension of voyages and port jumps to control capacity and adjust freight rates, but to a certain extent they also broke the balance of empty and heavy containers between routes. With the gradual recovery of the economy, the trade demand of various countries has rebounded, and the exports of Europe and the United States have grown strongly. However, under the continuous epidemic situation, the various quarantine and epidemic prevention measures added by the port customs will inevitably slow down the circulation of containers. Coupled with the gathering of festivals such as "Black Friday" and "Christmas", the port operation capacity will not be able to keep up with the number of boxes. , The result is that a large number of containers are blocked in the port, empty containers can not go out, heavy containers can not enter. In some British ports, the volume of container transportation in recent months has even been 30% higher than normal, resulting in too many empty containers throughout the UK, and even the alarming phenomenon of containers being piled "at your doorstep".
A British freight forwarder said, "Even if customers are prepared to pay close to crazy freight rates to ensure that the goods are shipped, we are still busy trying to transport the empty containers because the port is already full. Some empty containers on the dock are already After being placed for more than four weeks, we still don’t know when they will be loaded."
In order to ensure the smooth operation of global logistics, liner companies have adopted some unconventional container deployment strategies, such as shortening the free container usage period to stimulate and speed up the circulation of containers on key routes; key routes and long-distance base ports give priority to container use and priority Vacant containers are deployed to countries and regions such as China, Southeast Asia, etc.; the monitoring of container return is slow. For example, some areas in Africa cannot receive goods normally, resulting in whether the container is returned or not. The liner company will comprehensively evaluate and reasonably release the container; some shipping companies even suspend it Made export reservations to Europe and the United States in order to fill as many empty containers as possible back to Asia. However, due to the empty container regulation of shipping companies, the freight rates on the Asia-Europe routes have also been increasing, and the market seems to be in a vicious circle of chaos.
At the same time, a survey conducted by xChange and FraunhoferCML, a German maritime research consultant, showed that despite the large-scale progress in global port handling technology, the time that containers remain empty in ports is still surprisingly long. This report unexpectedly shows that the global container vacancy phenomenon is very serious. The vacant time of each container in the port is 45 days on average, while the vacant time of containers in empty container shortage areas such as China and the United States is longer, 61 days and 61 days respectively. 66 days.
Obviously, the circulation of empty containers is a problem that the entire industry needs to face squarely, but it has been ignored by the industry for a long time. In the sudden crisis of the epidemic, the "old problems" have further deteriorated and gradually developed into today's thorny problems.
It is understood that CIMC, which accounts for 45% of the global container manufacturing market, said that the company is currently stepping up container building and container orders have been scheduled to the first quarter of next year. However, waiting for the new containers to leave the factory, after all, "far water can't save the immediate emergency", and the situation of "a box is hard to find" is expected to continue for some time. In addition to working overtime and deploying empty containers, what else can shipping companies and ports do? The structural empty container circulation problem may be difficult to obtain an optimal solution in a short period of time, but "it is not too late to make up for it". It is time to put more resources and efforts on solving the empty container problem.
As shipping companies continue to detain containers in Nordic ports and charge exporters more than US$5,000 per container to ship a container to Asia, there is increasing pressure for regulatory intervention.
British importers are currently facing major challenges. The shipping division of the Ocean Alliance has decided to transfer the other five ships that arrived in Felixstowe in December to Zeebrugge, Belgium.
According to a consultation conducted by the shipping company to its British customers last Friday , the five ships Cosco Shipping Azalea, Ever Goods, Ever Globe, CSCL Jupiter and CSCL Uranus will no longer call Felixstowe, and will unload the British ships at Belgian ports. Imported products.
In addition, the partners of 2M and THE Alliance are also transferring ships from the congested British port, where the former is loading and unloading British cargo in Bremerhaven.
It is understood that due to the lack of open feeder ships and terminal capacity issues, it is almost impossible for British goods to be transferred before January next year. Some shipping companies are discussing not calling Felixstowe throughout January because they worry that the port will be saturated in a few weeks after Christmas.
However, as the terminals in Antwerp and Rotterdam have also become very congested, the choice of liner companies is becoming increasingly limited. However, a source from a shipping company said: "Our first priority is to reduce imports before shipping our container equipment back to Asia."
British export orders have been suspended by a number of shipping companies, and more and more orders can only be booked at other Nordic ports paying additional fees.
MSC said on Friday that it will significantly increase the FAK fee for a 40-foot container from Antwerp to Shanghai in December by 300% to US$5,000. MSC explained that it is facing very serious operational problems that have seriously affected the reliability and regular supply of inventory.
A source at a rival shipping company said the strategy is to block bookings so that MSC can return its empty containers to Asia more quickly.
He added: "If they can indeed get some reservations at this price, it will be a win-win."
At the same time, the European Shippers Council (ESC) and the European freight forwarders association CLECAT have joined forces to lobby the European Commission to intervene in this crisis.
Denis Choumert, president of ESC, said: "Shipping companies have been taking advantage of the tight capacity to increase revenue far beyond cost, which makes customers unhappy."
"The continuous unreliability of service, coupled with the record profits of the shipping company during the crisis, clearly illustrates a severely disturbed market, and shows that the carrier has substantially increased the spot freight and levied higher than the fixed-term contract price The huge surcharge."
A joint communiqué stated that ocean shipping companies serving Europe benefited from “privileges” that were provided to them by the Union’s Prevention of Immunity Regulations (CBER), which was updated in April.
"Such privileges are now too much because they allow shipping companies to use tools to manipulate the market," adding that the European Commission has not responded to the crisis so far, which is "confusing".
After the goods arrive at the port, the customer does not pick up the goods, and the shipping company requests to return the goods and let us bear all the expenses.
At the end of July 2019, two shipments were delivered to Port Klang, Malaysia. The two shipments arrived at the port in mid-August, but the customer did not pick up the goods until mid-September. Before the goods arrive at the port, we have reminded the customer that the goods are about to arrive at the port. After arriving at the port, we remind the customer to pick up the goods.
In mid-August, the freight forwarder told me that the customer still did not pick up the goods. I have been urging the customer to pick up the goods, and the customer always said that he would pick up the goods on the same day, but it was delayed until mid-September. Customers do not communicate with us because they do not pick up the goods for any reason. It will always be "I will pick up the goods today."
At that time, the LCL company was impatient, and gave us an ultimatum. Let us notify the customer one last time. If the customer does not mention it, it will be returned to us, and the demurrage fee and other expenses incurred will be paid by us.
Analysis suggestion
If the foreign customer’s company goes bankrupt or the goods are not picked up after arriving at the port, it has been more than a month since the arrival of the port and incurred a lot of costs. The customer will obviously not pick up the goods. We ask the freight forwarder to explain to the shipping company that we abandon the goods, but the forwarder says at least Only half a year can be abandoned.
So here comes the problem. The port cost in half a year is estimated to be an astronomical figure, and domestic factories will definitely not be able to afford it. The value of the goods is also very low, and the future cost will definitely be much more than the value of the auction. The specific questions are as follows:
1. Will the shipping company pursue these demurrage fees, demurrage fees, and terminal fees?
2. Is it recourse to freight forwarders or foreign customers or domestic factories?
3. If they cannot pay, will the shipping company go through legal procedures?
So, how to deal with export abandonment?
1. Take the initiative to abandon the goods.
First, ask your freight forwarder to seek help from the agent at the port of destination, first change the consignee to the designated agent, and then abandon the goods in the name of the agent. Why has to be this way? Because if the consignee is not changed, it should be difficult for the consignor to abandon the goods unilaterally. But after such a change, the agent at the port of destination will have to bear a lot of responsibilities, including the cost and responsibility of abandoning the goods. This condition must be negotiated with the freight forwarder. People are willing to help you do this. How much you need to bear.
2. Resale.
See if you can find other buyers in the destination country, change the consignee of the bill of lading and then sell them to them, of course, there will be a discount. There are also major constraints in doing so. One is whether the products are customized and difficult to resell, and the other is to find customers who are willing to take over.
3. Ignore it.
Then don't care about anything, and all the liability costs will be borne by your freight forwarder. This is the most embarrassing thing. Maybe you are all right, but the freight forwarder and the company who picked up your shipment are in bad luck. The key is that this matter is not the responsibility of others. Of course, the other party may also go to court with you. According to Article 86-88 of the Maritime Law, if the consignee has a problem, the consignor must bear the cost.
4. Return shipment.
You can return to the domestic bonded area for storage. If there is a new order that is sent abroad or is undergoing inspection and maintenance, replace the package and bonded warehouse for simple processing such as packaging, relabeling, and shell replacement. Sent abroad. The bonded area is equivalent to foreign countries, and the return of goods to the bonded area for inspection and maintenance does not require import declaration, so there is no need to apply for the return of the goods to the customs, and there is no need to pay taxes or pay a deposit to the customs.
Domestic export goods, especially electronic products, small household appliances, etc., have a high repair rate. The traditional way of returning to the factory for repair requires multiple cumbersome procedures such as customs, commodity inspection, and national tax. Using the advantages of the bonded area and outside customs can quickly solve the repair problem.
The bonded area has a policy of "outside customs within the country", that is, it is within the national border but not under the jurisdiction of the domestic customs. Goods entering the bonded area from the country are equal to export, and entering the country from the bonded area is equal to import (import customs declaration). same.
Therefore, returning the goods returned from abroad to the bonded area means that the goods remain abroad and the import declaration has not been processed, so there is no need to apply for the return of the goods to the customs, and the returned goods to the bonded area are tax-free and can be re-exported.
Below we analyze the advantages of returning to bonded warehouse storage for repair:
a. Simple procedures : free deposit, tax exemption, exemption, exemption from commodity inspection, exemption from customs declaration, only need to provide us with the packaging, number of pieces, amount, net gross weight, and then the QP system can apply for entry maintenance and entry maintenance.
b. Fast timeliness : After the goods arrive at the Hong Kong/Shenzhen terminal, our company can arrange transportation and pick up the container and pull it back to the bonded warehouse for repairs. Workers can enter and leave the processing area freely without a visa for repairs. Shenzhen re-export.
c. Low cost : The cost of workers and maintenance site costs are much lower than those in Hong Kong or overseas.
Case two
The customer is bankrupt, the creditor controls the goods, and the freight forwarder asks for storage fees
We have a batch of goods that we did CFR with our customers. The goods arrived in Hong Kong in July last year. Because the customer went bankrupt and disputes with creditors, the goods have not been able to withdraw. Our payment has been received in full. The agent requests for warehousing, detention fees and other fees, and our agent charges us these fees.
The domestic agent has our export tax rebate receipts, and the other party does not deliver the receipts accordingly, and the tax rebate will be declared immediately. This matter has not been resolved yet, which is very difficult. Now foreign agents threaten to auction the goods, do they have this right? Is this legally true?
Analysis suggestion
analysis:
First of all, make it clear that, as SHIPPER, you are indeed obligated to pay the storage fee for the batch of goods (the second responsible person, as long as CONSINEE does not pay, you have to pay);
Second, after the goods arrive at the port, the ownership of the batch of goods belongs to CONSINEE. If the goods are to be abandoned, CONSINEE should write a written statement before SHIPPER’s turn to write;
Third, there is no law that supports that freight forwarders can withhold your verification form. As long as they go to court, they will definitely lose the case;
Fourth, after a certain amount of storage fees are incurred at the terminal, the port of the other party does have the right to auction the goods, but the auction proceeds are paid to other creditors after the storage fees are paid. (Of course, if the auction proceeds are not enough to pay the storage fee, SHIPPER and CONSINEE are obliged to make up for it.)
Finally, if, as you said, the goods have been controlled by the customer's creditor, then the creditor should pay the warehouse rent as CONSINEE's principal. (Theoretically, if your client, as CONSINEE, does not receive the goods first, his creditor has no right to control the goods. If he has received the goods, then the owner of the goods is him instead of you. Of course it may be different. National laws are different, so only your customers will know how the local laws are)
Suggest:
After the goods arrive at the port, how can the customer return the goods or sell them to others without paying?
Most countries in the world have this regulation. When the imported goods arrive at the port, the jurisdiction of the goods will be transferred to the customs. In order to protect the interests of buyers, the customs will not allow anyone other than the consignee to move this. Batch of goods.
This has brought a lot of trouble to the seller. When the seller fails to collect the full payment and wants to control the rights of the goods, he finds that he may face a shortage of money and goods.
Because whether you want to return or resell, you must meet any of the following two conditions:
The original consignee gives a declaration of abandonment;
The original consignee clearly informed the seller to refuse to pay for the goods!
As a result, some buyers will keep dragging, and they will never say that they will not pay, so that you can't get the evidence. Don't even think about it!
As a result, the seller can only watch the time passing day by day until the goods are auctioned by the customs!
So I gave two methods:
1. Find a very capable freight forwarder. I mean the destination port forwarder. They can help solve some problems. I have a friend who has successfully solved the cargo problem in Turkey.
2. Looking for counsellors, some people have succeeded, but most of them can hardly be contacted.
In fact, these are dead horses as horse doctors, because there is hardly any better way.
However, today I want to tell you the good news that another method has proven effective in practice.
I suggested that a friend write this paragraph in the contract:
The payment method of this contract is to pay the balance upon seeing a copy of the bill of lading. If the buyer (specific name) has not paid the balance within 10 days of seeing the copy of the bill of lading, it is deemed that the buyer has voluntarily waived the right to the goods, and the buyer agrees to the shipper to dispose of the goods independently.
or:
If the buyer (specific name) fails to pay the payment within 10 days of seeing the copy of the bill of lading, the clause is automatically activated: the buyer (specific name) voluntarily waives the right to dispose of the goods on the ticket, the shipper is free to dispose of it, can be returned or Resell to any other third party!
Remember, you must ask the customer to sign back!
Many people will say, how can a customer sign it?
If the client is a serious businessman, he is not deliberately deceiving you, he will definitely sign it, because this is a normal contract clause and does not harm any interests of the client.
Therefore, when the customer has not paid for the goods, the contract will work. The friend gave the contract to the local agent, the agent showed it to the customs, and the Turkish customs released it.
I don't know if all customs will recognize this contract model, but since there is hope of success, it must be 100 points.
Someone may have said, why do you have to pay at the copy of the bill of lading? Wouldn't it be better to do 100% TT before? Who doesn't want to do a risk-free business? If you can do the TT before, who will do payment at the copy of the bill of lading, who will do the letter of credit, who will do the DP or even the OA?
Due to competition, helpless! It's like a big brother commenting on my face of slavery, because I said that I must express first, and then ask questions, because I said that even if the customer's information is incomplete, we must first deliver the value, and then ask about the specific configuration, if at the very least Foreign trade business can also be regarded as a minion, so are those who accept these non-former TT payment methods also a minion?
Persevere in self and only do TT; adhere to self and only do high value; adhere to self and wait for customers to take the initiative, and never take the initiative! Maybe this is the real hero, but I can't do it now. Apart from a few top players, how many people can do it?
As analysts have always predicted, the spot freight rates on the Asia-Europe container trade routes have risen sharply. Compared with the booming Pan Pacific routes, the carnival comes later.
Stimulated by the surge in consumer demand, the supply of equipment was tight and the supply of equipment was limited. The freight rate announced by the Shanghai Container Freight Index (SCFI) rose by US$447/TEU to US$2091/TEU, a 27% increase in a week. The freight rate of the Asia-Mediterranean route has also risen sharply, rising by US$421 or 23% this week to US$2219 per TEU.
Today, most trade routes have also released data for a week. The freight rate from Asia to West Africa has increased by US$300 to US$4,459 per TEU; while the freight rate from Asia to the east coast of Latin America has soared by US$402 to 4,805 per TEU. Dollar.
At the same time, the freight rate in the Pacific region was flat this week, but still at a historical high.
According to recent data released by shipping reporting company Sea Intelligence, the capacity of trans-Pacific routes will increase by 27.3% year-on-year in December. However, in Asia and Europe, the deployment plans of these shipping companies show that capacity has only increased by 6.7% year-on-year. In recent months, many ships have diverted to more profitable trans-Pacific waters.
Earlier this week, Eytan Buchman of Freightos, an online container ordering platform, commented in a report to customers: “Because carriers prioritize trans-Pacific containers, some of them have shifted their shipping capacity to Asia from Europe. United States."
"The shortage of equipment and port congestion in the United States and the United Kingdom has made shippers miserable. There are reports that bookings have been rejected due to lack of empty containers, containers have been unloaded at other ports, and shippers have delayed bookings." Buchman added.
In recent months, the record freight environment has prompted many governments to intervene. The US Federal Maritime Commission (FMC) has expanded its investigation of liner activities, and India, China and South Korea have also recommended that routes control their sky-high charges.
It is reported that the Port of Colombo has a backlog of 50,000 teu of cargo, causing South Asian transshipment cargo into chaos.
In the past few weeks, the Sri Lankan capital has been locked down due to the epidemic, and since the beginning of October, the city’s container terminal labor shortage has caused serious congestion.
Today, this dilemma is affecting the supply chains of neighboring India and Bangladesh.
According to Rohan Masakorala, CEO of Shippers' Academy Colombo, the Port of Colombo has reduced the number of employees by about 30%, which has dealt a major blow to the efficiency of crane production and trucking between freight stations.
"The backlog of orders and goods is very large, and it may take six to eight weeks to clean up."
"Colombo International Container Terminal (CICT) mainly focuses on transshipment, while the other two terminals are responsible for feeder ships, so there is an urgent need for transshipment between terminals." He said.
"The lack of truck drivers means that containers are starting to accumulate in the storage area of the port. This also means that it affects feeder ships, sometimes waiting for more than a week, and then even the mainline ships have to be delayed by one to two days."
▲Colombo port congestion: a backlog of 50,000 TEUs caused delays and increased freight rates
Masakorala said that given that Colombo handles approximately 600,000 TEUs per month, regional feeders and connectivity are being severely damaged, and carriers are forced to ship containers to India, Singapore and Dubai.
He added: “Of course, Colombo is not the only port affected by the new crown epidemic, but as a transshipment hub, the impact is much greater and the entire region will be affected. Even now, there are still 23 ships waiting for berths, and Usually the port receives 12-16 ships every day, so there are quite a lot of ships waiting at the window."
He explained that it is inevitable that Colombo’s freight has doubled, and shippers need to book eight weeks in advance to get a seat.
Masakorala said: “Some shippers have been waiting in Colombo for four weeks and two weeks in Singapore.” “Freight forwarders have been severely affected, so some urgent cargo must be transported by air or to a third port, which increases Cost and shipping time."
He added that, given that ports in India, Bangladesh and Pakistan are fully operational, there are now concerns that the port’s reputation may be damaged. Sri Lanka is ambitious and hopes to become a global shipping and logistics hub as famous as Dubai and Singapore. However, Mr. Masakorala said that the LCL loading and unloading and customs clearance and consolidation operations of FCL have been "seriously affected."
Recently, foreign trade forwarders who transshipped through this port have mainly paid attention to it, for fear of delays and additional costs.
Colombo handled 7.2 million TEUs in 2019, but Mr. Masakorala believes that the port’s throughput will drop by 10-20% this year.
