/ By TJ China Freight / Shipping

Congestion in West America worsens!

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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring
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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

　　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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

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.

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

Volume surged in the eighth week

 

Congestion in West America worsens! Aerial photography of Southern California full of container ships! Terminal operators expect to get rid of the dilemma by the end of spring

 

 

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."

/ By TJ China Freight / Shipping

Container shortage or turning point

Container xChange said that the shortage of container equipment that has lasted for several months is expected to end because the container availability index (CAx) is undergoing positive changes.

Container shortage or turning point

According to Container xChange analysis, the Chinese New Year may become a turning point , with the 20-foot and 40-foot dry cargo index increasing to 0.34 and 0.37 respectively, indicating that the availability of empty containers is much higher than last month. CAx data comes from millions of containers tracked by Container xChange. Container xChange CEO Johannes Schlingmeier said: “An index of 0.5 indicates market balance, and a value below 0.5 indicates a shortage of containers.” Container xChange pointed out that although the latest data in January was well below 0.5, indicating that there is still a shortage of container equipment, but 20 feet and The 40-foot container data has begun to approach the normal container shortage level in China's main export markets.

David Amezquita, the company's director of data, said:

Compared with December 2020, the availability of 20-foot containers in January 2021 has increased by 37.5%, and the availability of 40-foot containers has increased by 200%, which is a positive trend.

Data from xChange shows that in the past few months, there has been an extreme shortage of containers across China. In Shanghai, which has always been in short supply, the index reached a record low in December 2020, of which the 40-foot container availability index was only 0.13. The company said that as China's container manufacturing plants are running at full capacity to expand production capacity, coupled with the shipping company's efforts to transport empty containers back to China, the Chinese New Year may become an important turning point.

With the substantial increase in container supply, Shanghai Port's container availability index is returning to normal levels. Other ports in China are also undergoing positive changes. Taking Qingdao Port as an example, the availability index of a 20-foot container even reached 0.5. The container availability index of other major Asian hub ports such as Singapore Port, Navassiwa Port and Port Klang also showed the same trend. Compared with December 2020, the availability index of standard containers at the Port of Singapore in January 2021 has increased by 58%, Port Nawahiwa has increased by 35%, and Port Klang has increased by 54%.

There are signs that the container availability index will remain stable in the coming weeks. Until mid-February, the availability of 20-foot boxes will stabilize at around 0.35, and the availability of 40-foot boxes will stabilize at around 0.38.

/ By TJ China Freight / Shipping

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

In the past two months, the cost of transporting goods from China to Europe has more than quadrupled, hitting a record high, due to the pandemic disrupting global trade and the shortage of empty containers.

 

Data from shippers and importers show that the freight for transporting a 40-foot container from Asia to Northern Europe has risen from approximately US$2,000 in November last year to more than US$9,000.

Lars Jensen, CEO of maritime consulting company SeaIntelligence, said that the reason for the increase in freight rates is the market's competition for limited resources-containers.

 

In the first half of 2020, due to a sudden slowdown in global trade due to the epidemic blockade, shipping companies have suspended large-scale shipping and thousands of empty containers are stranded in Europe and the United States. In the second half of the year, when Western countries' demand for Asian-made goods rebounded, competition among shippers for available containers pushed up freight rates.

 

John Butler, Chairman of the World Shipping Council, said, "The freight volume has dropped from a sharp decline to soaring to the highest level in history, and the effective handling capacity of the terminal has exceeded the upper limit."

 

He added that the congestion in the port has caused freight rates to rise, and shipping companies charge additional fees to compensate for the longer waiting time.

 

 

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

 

 

British freight forwarding company Edge Worldwide CEO Philip Edge said that some shipping companies charge US$12,000 per container, much higher than the US$2,000 in October last year.

 

The British Household Electrical Appliance Manufacturers Association stated in a statement, “According to member companies’ disclosures, shipping costs have increased by more than 300% since 2020. Especially for some commodities, the increase in shipping costs has exceeded the net increase Profit. Therefore, these costs will have to be passed on to the end user."

 

The owner of a leisure goods importer in Manchester said that the shortage of containers is having a “huge impact” on his business, and some orders placed in November are still waiting to be shipped. "The question is, is it to pay $12,000 now and pass the cost on to the customer, or to wait at the risk of exhausting inventory?"

 

Economists say that such interruptions and delays are beginning to affect global supply chains. Neil Shearing, chief economist at Capital Economics, said that "transportation pressure is accumulating and may increase further."

 

A recent survey by IHS Markit found that in December last year, the delivery time of manufacturing suppliers in the Eurozone reached the worst level since the peak of the pandemic lockdown in April. Shipping delays and general commodity shortages were "widely mentioned" by suppliers. .

 

 

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

 

 

The companies surveyed stated that they are consuming inventory of raw materials and semi-finished products, resulting in a decline in inventory.

 

Bert Colijn, senior economist at ING, said that "supply shortages and rising freight rates may slightly curb trade growth."

 

On the occasion of the Chinese New Year in February, the Asian manufacturing industry slowed down. Shipping companies hope to use this time to solve the problem of increasing backlog orders, which will temporarily cool freight rates.

 

However, BIMCO chief shipping analyst Peter Sand said that the shortage of containers may continue for a long time in 2021. Although the shipping company has ordered new containers, in his opinion, such a move is "too small and too late."

 

Lars Jensen also believes that although freight rates may drop slightly, "there are still a lot of goods waiting to be transported."

 

John Butler pointed out that only when epidemic-related restrictions are reduced and people have more diverse service choices, the pressure on the maritime supply chain can be alleviated, but no one can say when it can be improved.

/ By TJ China Freight / Shipping

What causes the lack of containers in shipping companies

Maritime shipping companies lack box What does it mean? Chinese exports to Europe more than is light cargo, the widespread use of large container loaded cabinet, a cabinet hard situation  as more and more obvious. After the peak season of foreign trade, the export of goods soared, and the original inventory of empty boxes could not meet the requirements of the booker, resulting in a shortage of goods and a shortage of boxes.

How should shippers correct the shortage of containers in shipping companies?

1. The foreign trade factory should prepare the goods quickly, book the space in advance as much as possible, and notify the freight forwarder or the car dealer as soon as possible after receiving the notice of the release , so that you can know which yard to pick up the container and when to put it Make a response plan in advance for information such as whether the cabinet is lacking, whether the cabinet is picked up from another place.

2. In case of shortage of cabinets, you can apply for the designated cabinet with the shipping company in advance, that is, book the cabinet number when booking. After the goods are ready, go to the storage yard to pick up the cabinet of the container number for loading, but the designated cabinet needs to pay the shipping company's designated operating fee.

3. The storage yard can be proved by the same reason.

4. If there are no cabinets to pick up, check a few more storage yards. For cabinets that are slightly damaged in the storage yard, spend some money on the storage yard and ask them to repair and refresh them. You can also mention the cabinets.
What causes the lack of containers in shipping companies? Taijie to help you understand the lack of containers in foreign trade
5. When booking the space, confirm with the shipping company whether there is a shortage of containers. If there is a shortage of containers, you can change to another shipping company to book.

6. If the designated shipping company cannot be replaced, measure the quantity and volume of the cargo to see if it can be replaced by other container types. Or use a freeze-drying cabinet (NOR).

7. Normally maintain the relationship between the customers, and discuss and settle any problems.
What causes the lack of containers in shipping companies? Taijie helps you understand the lack of containers in foreign trade
Shenzhen Taijie kindly reminds you to confirm with the shipping company whether there is a shortage of containers when booking. Let's talk about why the box is missing?

We all know that China is a country with a trade surplus. Imports and exports are unbalanced. This leads to fewer imported containers and more exported containers. Container ships often burst out and enter half-cabins. If the shipping company fails to arrange the return of the backlog of empty containers in time, there will be fewer mobile containers and boxes. Due to the bankruptcy of a small number of shipping companies, or the serious damage to the cabinets of some shipping companies, some of the cabinets that should be used for mobile were once crushed and unusable. The peak season effect has exploded, causing the export of goods to soar. The amount of empty containers originally planned to be adjusted and stored cannot meet the requirements of the booker, resulting in short supply and shortage of containers.

With the implementation of the National One Belt One Road policy and the convening of the BRIC Conference, the overall shipping market demand has risen, the demand is greater than expected, the industry is picking up rapidly, and the supply of boxes is in short supply. The adjustment of the box has a certain lag, and it will take some time to solve it . The foreign environment is severe. Workers' strikes, port congestion, hurricanes, and ship schedule delays have caused the slow return of empty containers. If the container management department cannot respond in time, there will be extreme shortages of containers if the dispatch is not good. In addition, in order to maintain the relationship with major customers, shipping companies will reserve boxes for VIP customers. In the case of shortage of boxes, some ordinary customers cannot pick them up.

/ By TJ China Freight / Shipping

Continued high freight rates and shortage of containers, DHL&Hapag-Lloyd: The container market is expected to be in the second half of 2021

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.

/ By TJ China Freight / Shipping

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

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.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!
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."

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

 

 

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.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

 

 

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.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!
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.

 

Orders have skyrocketed, but profits have fallen instead of rising? High freight costs torment Chinese exporters!

 

 

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.

/ By TJ China Freight / Shipping

Had it not been for the blocking of US ports, China’s November trade surplus could have exceeded 75.4 billion US dollars

In recent months, the number of ships going to the Port of Los Angeles and Long Beach has almost doubled, and the nearby seas have been heavily congested, causing extensive delays in routes north of the United States and even affecting the throughput of the Port of Oakland. The Marine Exchange of Southern California in Los Angeles confirmed the incident. According to statistics, 52 container ships entered and exited the San Pedro Bay port on Monday alone, and the daily average for the year was 24 ships, even more exaggerated is that the number of berthed ships reached 23 ships, and the daily average is only one.

 

The rapid increase in the number of trans-Pacific freighters has boosted the throughput data of California container ports. According to statistics, the container throughput of the Port of Los Angeles and Long Beach in November showed double-digit growth-the container throughput of the Port of Los Angeles in November Soared to 889,746 TEU, an increase of 22% over the same period last year. Officials from the local port and shipping authority stated that there has been an unprecedented surge in freight volume under the influence of factors such as the increase in consumers at the end of the year, the approaching holidays such as Christmas and New Year, and the inventory of various units.

The gap between imports and exports across the United States has widened again, and the rate of empty containers in ports has skyrocketed

 

Had it not been for the blocking of US ports, China’s November trade surplus could have exceeded 75.4 billion US dollars

 

 

Gene Seroka, Executive Director of the Port of Los Angeles, said at a news conference on Wednesday, “After nearly 11 months of year-on-year decline in freight volume, we have now ushered in 4 consecutive months of year-on-year growth. In the past month, our monthly average throughput reached 930,000 TEUs. But related to this, our export volume was affected by many factors-mainly due to the continuing trade tensions with China and the continued appreciation of the U.S. dollar. The volume dropped by 5.5% compared to the same period last year, and it was down nearly 15% for the whole year. Fully loaded containers were even shipped back to Asia empty after being unloaded at our port. This month, the number of empty containers was as high as 294,000 TEUs. This was an increase of nearly 35% in the same period last year."

 

The Port of Long Beach also stated in a press release that November was the best November on record, and that this was the result of the holiday retail boom and the surge in delivery of medical protective equipment-the Port of Long Beach in November The container throughput was 783,523 TEUs, an increase of 30.6% over the same period last year. The situation at the Port of Long Beach is entirely related to the surge in imports. Imports increased by 30.5%, soaring to 382,677 TEUs; but exports fell 5.2% to 117,283 TEUs-like the Port of Los Angeles, the empty container rate increased by 55% to 283,563 TEUs Standard box.

Mario Cordero, Executive Director of the Port of Long Beach, said: "As consumers choose to live at home this year, online shopping and purchases of medical protective equipment have gradually increased. However, as a new round of new crown pneumonia epidemic is still spreading across the country, The overall economic outlook is uncertain."

 

This is the highest port import volume that U.S. ports have encountered in the past decade

Some analysts believe that due to the restrictions of the new crown pneumonia epidemic, consumers are unable to spend money on services and start to spend money on goods, resulting in this unexpected growth, and the new crown epidemic has also contributed to the prosperity of container ports (at least Is temporary).

 

Excessive accumulation of goods has become a problem that more and more container ports are facing. MarineTraffic AIS (Ship Positioning) data shows that an average of more than 20 container ships are waiting in Los Angeles and San Pedro Bay in Long Beach every day. This is the same as the number of ships at anchorage last week.

 

Had it not been for the blocking of US ports, China’s November trade surplus could have exceeded 75.4 billion US dollars

 

 

Source: Marine Traffic

John McCown, the founder of Blue Alpha Capital, said that this seemed unimaginable when the new crown epidemic began. He added: "Considering the possible increase in December 2020, the annual increase will be around 1.5%, which will reverse the slight decline of 0.9% in 2019.

 

McCown pointed out that there were several industries where imports surged in November. Imports of furniture, sporting goods and toys increased by 55%. In October and September, they increased by 52% and 41%, respectively. "The lifestyle at home has driven the sales of a range of consumer products." He added that the surge in demand is partly due to consumers' redistribution of spending that is usually used for vacations, dining out and entertainment.

 

According to data from Blue Alpha Capital, despite the positive import data, US exports in November fell by 4.2%, the ninth consecutive month of decline, further exacerbating trade imbalances, and the import load ratio of each export reached 2.32, which is close to the historical record. .

McCown said: "The latest data seems to confirm that the impact of the trade war on our container exports is greater than the impact on our container imports."

 

Facing the soaring imports from the west coast, the port of Auckland in the north is not so lucky

 

Had it not been for the blocking of US ports, China’s November trade surplus could have exceeded 75.4 billion US dollars

 

 

Unlike the Ports of Long Beach and Los Angeles on the west coast, the Port of Oakland in the north increased its throughput by less than 1% year-on-year in November and its export volume fell by 2.6%. In November, the total imported container volume was 78,045 TEUs.

 

Officials at the Port of Oakland said that despite the strong import demand from the United States, the import volume of our port is far from reaching the expected value. The official quoted reports from local maritime experts as saying that it is precisely because of large batches of imported goods across the United States that disrupted the normal freight arrangements at ports, causing large-scale delays in the delivery of goods at many ports. What needs to be pointed out is that the increased accumulation of imported cargo in Southern California ports has caused ship delays, and many ships originally scheduled to call at the Port of Oakland have been forced to change their routes or directly cancel their call arrangements.

 

The director of the Port of Oakland, Bryan Brandes, declared that everyone does not need to be so pessimistic. “The cargo that should come to our port will still come, at most a while later (Thecargo is there, it's just delayed).” He expects to wait until December for a certain amount of cargo. Will grow.

 

However, Brandes also acknowledged that the increase in the number of incoming ships on the west coast has had a butterfly effect on the Port of Oakland. "Most of the cargo east of the trans-Pacific route is the Los Angeles route directly, and then some of it will go north to and from the Port of Oakland. So once the Port of Los Angeles produces Because of the delay, we will have a little impact here more or less."

 

U.S. agricultural exports have been affected by the chain, and this new year may not have been easy

 

Had it not been for the blocking of US ports, China’s November trade surplus could have exceeded 75.4 billion US dollars

 

 

The Port of Oakland is an export gateway favored by agricultural producers in central California, and it is now being hit by disruptions in the supply chain. As the Spring Festival approaches, exporters of agricultural products in many places, including California, said that due to shipping delays, their export business has been affected on a large scale-especially almond and walnut exporters, whose export peaks are at the end of each year.

 

Ed DeNike, President of SSA Terminals, said: "The biggest problem is due to traffic congestion in Southern California. Freight ships have not left Southern California. The arrival of the ships at the Port of Oakland may be delayed for at least one week."

 

Peter Schneider, vice president of freight company TGS Logistics, said that the butterfly effect of port congestion on the inland supply chain is getting worse. TGS now has to double the capacity of their container warehouse in Auckland. Because of the delay in the arrival of the ship, the shipping company will either refuse to accept all the exported goods or change the date of receiving the exported goods. This has caused exporters’ services to overseas buyers. Had a great impact.

 

my country's port containers are "difficult to find"

 

Had it not been for the blocking of US ports, China’s November trade surplus could have exceeded 75.4 billion US dollars

 

 

On the one hand, U.S. agricultural product exporters were delayed due to ship delays, and on the other hand, Chinese product exports were restricted by the shortage of containers.

 

According to economic data released by my country, China set a new record of trade surplus in November-US$75.4 billion, and exports increased by 21.1% year-on-year. Among them, exports to the United States led the growth and hit a record high. Analysts pointed out that the surge in trade imports to China is contrary to the expectations of U.S. bipartisan politicians. Although the Trump administration has imposed various restrictions on Chinese goods, there are few signs that the global supply chain will move closer to the U.S. On the contrary, the long-term impact of the epidemic on the United States seems to strengthen the position of China's manufacturing industry.

 

According to port carriers, due to the heavy congestion of major ports in the United Kingdom and the United States, a large number of containers have been stranded in these ports, which has affected global container turnover. The shortage of empty containers in Asian ports is so serious that carriers sometimes cannot guarantee Loading cargo at Asian loading ports.

 

Although carriers have made every effort to send empty containers from the United States to Asia-these measures even include "self-harm" measures such as drastically reducing the free container period, they still cannot change the reality of a serious shortage of containers in Asia, especially in China The ports of Xiamen, Ningbo and Shanghai, so that some ships cannot leave Asia with full load.

/ By TJ China Freight / Shipping

Indian exporters: The market is completely crazy!

Due to the unbalanced import and export situation, the shortage of containers in India is causing the cost of shipping companies and importers and exporters to rise sharply.

 

"The cargo volume of all routes has jumped in the range of 20% to 100%."

Mark S. Fernandes, director of the IMC Chamber of Commerce and Industry, told the Business Standard: “Because customers are not ready to absorb price increases, exporters sometimes face losses.”

Indian exporters: The market is completely crazy!

"Our situation is very helpless. The customer is not ready to pick up the goods, and the shipping company has increased the freight. So we have to bear the cost because the materials have been produced and need to be delivered."

An Indian exporter, who asked not to be named, said: “The market is completely crazy, and shipping companies have formed a business alliance to make up for the losses it suffered during the global blockade earlier this year.”

 

Although the freight rate of the container part has risen, if booking in advance, the availability of the container will be eased to a certain extent.

Now, exporters are planning to cooperate with shipping companies 1-2 months in advance to ensure that the goods are shipped on time. If the plan is better, there will be no major delays in obtaining containers.

Indian exporters: The market is completely crazy!

Balmer Lawrie, Hyundai and Nathani are some of the container manufacturers in India. They started to produce these equipment in China at a very competitive price of US$1,000 per container, while the price of containers manufactured in India was US$1,800 to US$2,000.

 

Shipping companies can order more containers, but once the trade situation returns to normal, those newly ordered containers will become inventory.

Therefore, shipping companies are not keen to invest in new containers.

"It is not easy for shipping companies to survive. Operating costs have risen and trade has been hit as a whole. As a result, there are fewer flights and even have to empty ships, and fuel costs have risen sharply.

Indian exporters: The market is completely crazy!

Due to the epidemic, if certain preventive measures are not taken, the crew cannot breathe a sigh of relief. The measures taken will take time and additional costs. The entire industry chain has cost burdens, not just exporters. "

 

At the same time, ports such as JNPT and Chennai are striving to maintain operational efficiency in order to control the cost of shipping and importers and exporters from the port side.

 

"The port's cargo growth, we are in a recovery mode. We will ensure that there will be no congestion in the port, so that no stakeholders will incur additional cost burdens," said a senior transportation official of JNPT.

/ By TJ China Freight / Shipping

Small containers are becoming a key factor affecting the global trade industry chain.

Small containers are becoming a key factor affecting the global trade industry chain.

At the moment, in the field of foreign trade, it has become a consensus that “the one who gets the container gets the world”, and the lack of containers has become a hurdle in the international logistics chain. It can be said that I am in a hurry here, and you are looking forward to it.

Since July this year, China’s export volume has risen sharply, and both the shipping market and the China-Europe freight train market have seen shortages of containers, soaring freight rates, and delayed turnover.

Statistics from the China Container Association show that China’s export containers are mainly satisfied in two ways: unloading old containers after unloading at ports, and new containers made by Chinese container manufacturers.

At present, my country can only return one for every 3.5 containers exported. A large number of empty containers are backlogged in the United States, Europe and Australia, and there is a shortage of containers in Asia.

Containers that are usually returned within 60 days are now delayed to 100 days, and the cost of renting containers has also increased by about 150%.

I grabbed the space, but the box is missing; I grabbed the box, but the space is missing; I grab the box and the space, but the freight rate has increased again...

Zhang Jun, deputy general manager of Qingdao Port QQCT, said:

Under normal circumstances, if 1,000 containers are needed in the current period, there will usually be 1,200 to 1,300 containers waiting at the port. However, when containers are now in short supply, there may be only 800 to 900 containers at the terminal.

Nowadays, in addition to the hard to find a box, there is also a "hard to get a cabin."

The lack of shipping company capacity is the beginning of the nightmare of freight forwarders.

After the suspension, in addition to high freight rates, freight forwarders are faced with the realistic challenge of "bursting cabins".

The relationship with the shipping company is the "most familiar stranger", and the freight forwarder who can't pay the high price can't book the space at all, and the long-term customer's cargo cannot enter the port and board the ship on time.

I grabbed the space, but the box is missing; I grabbed the box, but the space is missing; I grab the box and the space, but the freight rate has increased again...

After the "explosive cabin", due to insufficient space, the shipping company will detain many of the space booked by the freight forwarder on the next flight in order to maximize the benefits. You know, "drop the container".

For large freight forwarders, the losses caused by dumping containers may still be within the tolerable range.

For those small and medium freight forwarders who rely on a few large customers themselves, the disadvantage of insufficient competitiveness in this case may directly lead to their fall.

As the "middleman" between the customer and the shipping company, the explosion of warehouses at the end of the year made the freight forwarding "messy in the cold wind" gradually.

The freight forwarding industry is already facing a situation where the strong will remain strong and the weak will remain weak.

However, freight forwarders serving some special categories will be in a better position because they have their own unique competitive advantages.

I grabbed the space, but the box is missing; I grabbed the box, but the space is missing; I grab the box and the space, but the freight rate has increased again...

On the 17th, Hapag-Lloyd's official website issued an announcement that due to continuous unforeseen operational challenges, it is still facing extremely tight equipment.

Hapag-Lloyd supports all confirmed bookings, but it does not rule out the possibility of cancellation.

At the moment it can be said that: I grabbed the space and lacked the box; I grabbed the box and lacked the space; I grabbed the box and the space , but the freight rate has risen again.······

/ By TJ China Freight / Shipping

The latest data show that the shortage of empty containers in Asian ports will continue until at least next year

The latest report released by the shipping consulting agency Sea Intelligence shows that the shortage of empty containers in Asian ports will continue this year, at least until January next year.

The biggest problem facing the container shipping industry is that some key regions, especially Asia, are facing a serious shortage of empty containers.

The short interest of empty containers is also the main reason that pushes the spot container freight market to historical highs, and it is also the main reason why shippers who want to be able to ship their products in time are very annoyed.

Some reports pointed out that due to the shortage of empty containers, the current impact on domestic exports has emerged.

Investment securities noted in exports , China's exports of most goods were transported by sea containers . The greater the export freight volume, the greater the demand for containers and the higher the freight rate. The freight rate index is consistent with the export year-on-year trend.

This year, SCFI began to increase prices at the end of May, matching the time when the European and American economies were unblocked. That is, the demand for Chinese goods increased after overseas unblocking, corresponding to the positive export growth rate from June; and the SCFI price increase has accelerated significantly. At the beginning of November, the export growth rate in November increased by 9.7 percentage points to 21.1%. From this perspective, based on SCFI's repeated record highs since December, exports remain strong in the short term.

 

The latest data show that the shortage of empty containers in Asian ports will continue until at least next year

 

 

On the supply side , under the high trade surplus, empty containers have been left without return, which has exacerbated the shortage of containers.

The China Container Industry Association stated that the average turnaround time of containers in China has jumped from 60 days to 100 days due to the reduction of capacity in the United States and Europe due to the virus, which has exacerbated the shortage of containers in China .

Some US importers have stated that they cannot receive the goods on time during the November-December shopping season. This will result in companies unable to deliver enough goods to meet consumer demand during local holidays.

Faced with this important problem of serious shortage of containers, I believe that the highest priority for everyone in the industry (consolidation industry, foreign trade industry) must be: when can the problem of container equipment shortage be solved?

In the latest market report, the shipping consulting agency Sea Intelligence modeled the overall state of the market based on advanced regional data. Through the estimation of the global container pool and global shipments, the base time required for a container to be loaded in Asia, complete its voyage, and to be loaded again in Asia is determined. Then, use Container Trade Statistics (CTS) demand data and Asia's potential empty container buffer inventory to supplement the explanation, and finally achieve the purpose of calculating the availability of empty containers in Asia.

 

The latest data show that the shortage of empty containers in Asian ports will continue until at least next year

By simulating 4 different strategies for the carrier (shipping company, etc.) to potentially solve the shortage of empty containers:

(1) Do not take any measures against the shortage of empty containers;

(2) Actively relocate empty containers on routes exported to Asia;

(3) Inject new containers to reduce the current burden;

(4) Operators actively take measures to reposition the containers and inject new containers.

The figure above outlines these strategies and their resulting impact on the availability of empty containers in Asia.

Given the above data model, SeaIntelligence pointed out that the only possible solution to this problem in January is when the shipping company has to purchase new containers and actively reschedule the return of empty containers . In fact, major shipping companies are also actively pursuing and attempting to implement strategies.

However, Sea Intelligence stated that this strategy will also cause serious problems for return shippers.

The market is therefore faced with a severe choice-either the carrier pursues the current strategy to achieve the goal of solving the container shortage in January next year, or the shipping company reduces their aggressive container repositioning strategy for the benefit of return shippers. But the result will be that the shortage of empty space will last at least until February next year, or even longer.

The latest data show that the shortage of empty containers in Asian ports will continue until at least next year

Shipping companies suspend bookings for Asia-Europe heading

With the lack of empty containers, shipping companies also feel that they have more than enough energy. Some shipping companies have to reduce or suspend bookings for a period of time in the future.

Not long ago, CMA CGM, the world’s fourth-largest container shipping company, announced that it would stop accepting bookings from Asia to Europe in the next three weeks. Specifically, the company temporarily suspended the 49th, 50th and 51st week of this year’s Asia-Northern Europe route. Booking.

Then, according to the Danish shipping media shippingwatch, Maersk and ONE also said recently that they had to refuse some inquiries.

The world’s largest shipping company Maersk stated in a written reply to the media, “The current situation in Asia is very tense. Due to the large backlog of containers, we have reduced the short-term cargo orders in the last few weeks of December to a minimum, and Several voyages had to be stopped (reservations accepted)."

Singapore-based ONE Shipping said that the current industry is developing very fast, and the company is no longer able to accept goods transferred from other container companies.

In reply to the shipping company, the company wrote: "It is impossible to accept new transfers from other shipping companies, but we can basically meet the needs of existing customers without any substantial cancellation of bookings."