Near the end of the year, the peak freight season continued to be hot, and the market freight rates continued to rise.
Especially in the European market, the demand for cargo volume remains high. At the same time, the recurrence of the new crown pneumonia epidemic has also stimulated the growth of local import demand.
At present, the average space utilization rate of ships exported from Shanghai Port to Europe has basically remained at the full space level, driving the market booking price to rise sharply.
The latest Shanghai comprehensive export container freight index
According to the Shanghai Composite Container Freight Index (SCFI), on December 11, the freight rate (sea freight and ocean freight surcharges) from Shanghai to the European basic port market was US$2,948/TEU, a 24.2% increase from a week ago. Compared with the US$1,508/TEU a month ago, it has nearly doubled.
The freight rate of US$2948/TEU on the Asia-Europe route is the highest level in history since SCFI was released in 2009.
2018-2020 SCFI Asia-Europe route freight trends
The rate of the Mediterranean route has increased even more. On December 11, the freight rate (sea and ocean surcharges) for exports from Shanghai to the Mediterranean basic port market was 3073 US dollars/TEU, a 28.9% increase from a week ago.
Some industry analysts believe that the actual freight rate of some goods on the Asia-Europe route is higher.
Lars Jensen, CEO of SeaIntelligence Consulting, an industry authoritative consulting firm, believes that SCFI may seriously underestimate the actual freight rate in some cases because it does not consider the additional costs associated with containers and spaces.
He said that anecdotal evidence has shown that in Asia-Europe routes, the actual freight rate of some goods has reached as high as US$10,000/FEU.
The continuous period of high cargo volume, soaring freight rates, port congestion and shortage of containers have increased the risk of supply chain rupture, and more and more liner companies are controlling bookings.
Hapag-Lloyd has announced that due to severe container shortages, until the end of December this year, it will no longer accept 40-foot reefer containers from terminals in Germany, Austria, Switzerland, Hungary and the Czech Republic. In addition, the empty container of 40-foot ordinary container in Hamburg, Germany is not accepted.
This means that bookings in these countries will be affected.
In addition, Maersk and ONE also indicated to the media that before the New Year, they will have to reduce their bookings in Asia.
Faced with criticism that liner companies’ reduced bookings will affect shippers’ shipments, the World Shipping Council, headquartered in the United States, stated: “No one can predict the surge in demand for container shipping this year. see."
The organization believes that the solution to current problems lies in continuous communication between the carrier and the shipper. To restore the entire transportation system to a balanced state, all parties must work together to spend this critical period together.
Due to the superimposed impact of the epidemic and the Spring Festival, the Guangdong-Hong Kong route barge company plans to suspend the Guangdong-Hong Kong route starting from mid-January 2021. Affected by this, many shipping companies such as ONE, OOCL, Hapag-Lloyd have issued notices and suspended Receive cargo from multiple ports in South China and other places.
Lars Jensen, CEO of SeaIntelligence Consulting, pointed out that although the mainline ships are not covered by the suspension, "the decline in the service capacity of barges will affect the entire South China connection market."
For shipping companies, there are two benefits to stop accepting space reservations: First, it can digest orders that have been received before; second, after nearly a month of empty container allocation, it will help alleviate the current shortage of containers in China’s ports. status.
In view of this, until the Spring Festival, the freight rate will not be reduced in any way, the tightness of empty containers will not be alleviated, and no bookings will continue.
Hapag-Lloyd suspends South China branch service during the Spring Festival
Due to quarantine requirements for crew sailing between South China and Hong Kong after the Spring Festival holiday in 2021, feeder operators in South China announced that they will suspend services from January to February 2021. In consideration of this situation, Hapag-Lloyd will temporarily suspend the receiving of cargo at the final destination in the Pearl River Delta and Fuzhou until further notice.
However, it will continue to accept cargo arriving at major ports (ie Hong Kong, Yantian, Shekou) via mainline services. Please note that the time of suspension of booking reception in South China is based on the estimated time of arrival at major ports.
After unloading the cargo during the outage of the feeder line operator, any other expenses and responsibilities incurred at the transshipment port (Hong Kong, Shekou, Yantian) related to detention fees, terminal storage or terminal fees will be borne by the cargo owner .
Affected ports:
Hapag-Lloyd announced on December 3 that the port is congested due to stricter customs inspections and disinfection of imported food entering Huangpu. From now on, we will temporarily stop accepting reservations for refrigerated containers entering Huangpu Port in China until further notice. At the same time, it was announced that it will temporarily stop accepting orders for imported reefer containers from Busan, South Korea to Tianjin, China, with immediate effect.
In addition, Hapag-Lloyd also announced the suspension of all 40' freezer bookings in Germany, Austria, Switzerland, Hungary and the Czech Republic until the end of December 2020.
ONE suspends receiving cargo from South China during the Spring Festival
As crews on the coastal feeder between South China and Hong Kong are required to undergo COVID-19 quarantine, the feeder operator announced the suspension of services from mid-January to the end of February 2021. Taking into account this situation, the acceptance of all container types, including dangerous goods containers, reefer containers and major cargo destined for ports in South China, Guangxi and Fujian, will be suspended. The suspension of booking arrangements through major ports in South China is shown in the following table:
Due to stricter customs inspection and disinfection requirements for refrigerated containers imported into Xiamen, Fuzhou and Fuqing ports, the delivery of inbound refrigerated containers at these ports has been slow and is facing congestion.
In consideration of this situation, starting from December 9, 2020 (shipping date), ONE will stop accepting bookings for all refrigerated goods arriving and transshipped through Xiamen, China, until further notice. For containers in transit, ONE will strongly encourage customers to consider changing the destination to other alternative ports, especially for time-sensitive goods, such as fresh refrigerated goods. For refrigerated containers that have been shipped to Xiamen or are waiting to be shipped to Xiamen at the transshipment port, please note that all related costs will be paid on the consignee’s account and paid upon delivery.
Similarly, in view of the above circumstances, starting from December 8, 2020 (shipping date), ONE will stop accepting all orders for refrigerated goods to Fuzhou and Fuqing, China, until further notice.
For containers in transit, ONE strongly recommends that customers change their destinations to other ports, especially for time-sensitive goods, such as fresh and refrigerated goods. For containers that have been transshipped to Fuzhou/Fuqing or are to be shipped to Fuzhou/Fuqing at the transshipment port, once the feeder space of Fuzhou/Fuqing is available, a specific surcharge will be charged when loading.
Previously, Ocean Network Shipping (ONE) issued a notice stating that due to stricter customs inspections and disinfection procedures for imported food goods (including meat, seafood, dairy products, fruits and vegetables), Guangzhou Huangpu Port is facing a slow, Port congestion and other issues.
In view of this, from November 26 (the day of shipment), ONE announced that it will stop accepting orders for food products shipped to Huangpu Port in Guangzhou until further notice. For goods that are already in transit, ONE recommends that customers consider changing the port of destination, especially time-sensitive goods such as chilled and frozen.
OOCL suspends barge services in multiple ports
OOCL issued a customer advisory stating that due to the epidemic, the capacity of the Hong Kong and Macau South China barge routes has dropped significantly. It is expected that during the 2021 Spring Festival holiday, the import operations of ports in South China (including Guangdong, Guangxi, Hainan, Yunnan and Guizhou) will be affected and restricted.
The specific date depends on the destination of the container:
From January 18 to February 21, 2021, barge services to Hainan/Guangxi/Pearl River Delta ports (including Huangpu, Guangzhou, Foshan, Zhuhai, Dongguan, Zhongshan, Shantou, etc.) will be suspended;
From January 16 to February 21, 2021, cargo shipments of dangerous goods to ports in the Pearl River Delta economic centers such as Guangzhou, Foshan and Jiangmen will be suspended.
From January 18 to February 21, 2021, the import of frozen products will be prohibited at ports in the Pearl River Delta (including Huangpu, Guangzhou, Foshan, Zhuhai, Dongguan, Zhongshan, Shantou, etc.);
From January 16 to February 19, 2021, the import of over-restricted cargo is prohibited at the ports of the Pearl River Delta (including Huangpu, Guangzhou, Foshan, Zhuhai, Dongguan, Zhongshan, Shantou, etc.).
The sky-high freight rates, and the hot availability of space and empty containers, are forcing freight forwarding logistics companies to charter ships and open shipping routes.
Last week, it was reported on Souhang.com that freight forwarding giant DSV Panalpina bypassed the shipping company and leased three ships and a batch of empty containers to open a new China-Denmark route. The latest news is that another freight logistics company giant DHL Global Forwarding also Is considering stepping in.
Dominique von Orelli, executive vice president of DHL Global Forwarding, confirmed to the media that the company is evaluating charter plans.
DHL considers chartering for customers
A large freight forwarding company considered direct control of ship assets, but actually entered an industry that is different from its core business in terms of operation and culture. On the other hand, it also shows how popular it is to ship containers from Asia to Europe and North America. And freight forwarders desperately provide customers with adequate services.
"There may be more freight forwarders to follow suit ." Anil Vitarana, former president of United Arab Shipping, said in a post on LinkedIn.
"If there is a continuing shortage of ship capacity and containers, and major logistics providers and 3PL find it feasible to use internal resources to integrate the economic benefits of the entire supply chain, shipping companies may regret the beginning of this trend." Vitarana wrote.
He added that the logistics provider/third-party logistics provider (3PL) team includes former executives of the shipping company and can help his current employer provide the services provided by the shipping company.
Vitarana also stated that shipping companies can also cooperate with 3PL to improve service capabilities. He pointed out that CMA CGM acquired CEVA Logistics in 2019 and Maersk included DAMCO in its integrator strategy, which has further promoted the supply chain solutions of shipping companies. Program.
But not all freight forwarders consider it necessary to provide shipping services to customers.
Two other large freight forwarders, Kuehne + Nagel and DB Schenker, said that although the container market is extremely tight, they do not think such a move is necessary.
Freight forwarding giant Kuehne + Nagel expressed confidence in products based on digital solutions and cooperative relationships with shipping companies, able to provide services to customers, and will continue to provide leasing services for project cargo, rather than container customers.
DB Schenker does not believe that chartering is one of the solutions for capacity. The current shortage of ships and chartering costs have also increased. Alphaliner, a maritime analysis agency, pointed out in mid-November that most ship charters are tight. The daily charter price of 3,000-3,500 TEU ships is US$18,000, an increase of US$2,000 from the end of October.
Thorsten Meincke, DB Schenker's board member responsible for air and ocean freight, said that the resources needed to charter and manage ships are often underestimated, which will distract attention from the reliable and robust services provided by freight forwarders.
"Once you have ship assets, you have to fill them up. This will become your focus, rather than providing customers with the best solutions," Meincke said. "The current challenge facing the maritime market is largely the shortage of containers, not just the space of ships."
Indeed, other sources also believe that despite Maersk’s efforts to redefine its business model by integrating traditional shipping and freight functions, there are still huge differences in operations and culture between freight forwarders and shipping companies.
Ship asset owners must keep their ships full and require functions and costs such as ship planning and container repositioning, and freight forwarders usually rarely consider these daily affairs.
In addition, the source said that the shipping capacity chartered by DSV is small, and its cost is far from competitive with ships of 20,000 TEU or more that travel between Asia and Europe. This is why freight forwarding and shipping are almost always in different organizations, even in larger shipping companies.
Air cargo has ushered in the traditional peak season again. Not only has the volume of cargo increased sharply, but also the phenomenon of warehouse explosions and queues. The air freight prices of some routes have also increased or even doubled.
Katie Griley, vice president of operations at Griley Air Freight, revealed that the peak season is coming. Even if the cargo arrives at the local airport, it will take 4 to 8 hours for truck drivers to pick up the cargo from Los Angeles International Airport.
In this regard, the International Air Cargo Association (IATA) stated that during the surge in e-commerce in recent months, the continuous shortage of capacity due to the lack of passenger aircraft services will cause a particularly serious blow to the air cargo industry.
So what is the current domestic situation?
An executive vice president of international freight in Shanghai said that it is now in the traditional peak season for air transportation, and the recent traffic jams and queues in the unloading area of the airport logistics storage area are very serious. The liquidation should start in mid-October, and not only the volume of cargo has increased significantly, but the freight prices of major routes have also increased a lot.
In fact, not only the domestic but also the international air cargo market has been in a high boom this year. The freight rate has also been at a high level for a long time. Some routes have also risen to the highest prices in history.
2. The reason for the explosion of air freight and the skyrocketing freight?
According to a report from CCTV Finance, Dexun Group East China Managing Director Fu Keqiang said that from the second quarter to the present, the four main products that have contributed to the growth of air freight are electronic products, e-commerce channel products, personal protective equipment and auto parts. , These four products accounted for the main growth factors.
Zhao Chao, a senior analyst in the transportation industry of Changjiang Securities, said that on the one hand, the shortage of transportation capacity is difficult to reverse in the short term. On the other hand, when consumption in Europe and the United States is the most prosperous, such as Christmas and other shopping seasons, the overall freight rate should still remain. The high position will continue to rise.
So how to explain to customers in English?
1. Peak season demand soars
Paul Molinaro, head of WHO's business support and logistics operations, told Reuters that a series of factors have driven prices up, including the higher-than-usual increase in e-commerce before Christmas.
According to the U.S. Department of Commerce, e-commerce sales in the United States in the third quarter increased by 37% compared with the same period in 2019. According to data collected by Buy Shares, online shopping spending during the Thanksgiving weekend (including Black Friday and Cyber Monday) increased by 20% to $29.6 billion.
According to data sent to the Global Times by cross-border e-commerce platform DHgate, shipments from China to the US accounted for approximately 68% of the platform's total sales in September. Peak season for Christmas decoration transportation. The best sellers are Santa sack, solar LED string lights, Christmas snowman, artificial flowers and Christmas masks.
We can tell our customers like this:
Airline body IATA’s chief economist Brian Pearce said that Christmas demand “exaggerates the problem” of a surge in demand for airfreight.
Airline International Air Transport Association (IATA) chief economist Brian Pearce (Brian Pearce) said that the demand for Christmas prompted the explosion of international air cargo.
The COVID-19 pandemic's impact on production in countries around the world and the nearing of Christmas, a peak season for export of Chinese products to Europe and the United States, were part of the reasons for the surge in demand for airfreight.
Due to the impact of the epidemic on the production of countries around the world and the approach of Christmas, which is the peak season for China’s exports to Europe and the United States, this is also part of the reason for the explosion of air cargo.
2. Insufficient capacity
Data from the global air cargo market showed that air cargo demand continued to grow in October, but the growth rate was lower than the previous month.
IATA Director-General and CEO Alexandre de Juniac (Alexandre de Juniac) pointed out that air cargo demand is picking up, and we believe this trend will continue into the fourth quarter.
We can tell our customers like this:
Alexandre de Juniac, IATA’s director general and chief executive, notes that the biggest problem for air cargo is the lack of capacity, as much of the passenger fleet remains grounded.That will likely be exaggerated with shoppers relying on e-commerce – 80 per cent of which is delivered by air.
IATA Director-General and CEO Alexander de Juniac said: The biggest problem with air cargo is insufficient capacity, because most passenger planes are still grounded. If shoppers continue to shop online, it is no exaggeration to say that 80% of them are delivered by air.
So, the capacity crunch from the grounded aircraft will hit particularly hard in the closing months of 2020 which were part of the reasons for the surge in demand for airfreight.
Therefore, in the months before 2020, the production capacity of grounded aircraft will be particularly severe, which is also part of the reason for the explosion of air cargo.
3. Soaring freight
It is reported that due to the impact of the epidemic, the United States announced restrictions on flights from Asia and Europe, which affected the capacity of transportation and hauling of goods. Global supply chain disruptions and restrictions have forced operators to rely on commercial aircraft, which has led to a sharp increase in the rates of all-cargo airlines.
According to a report from the International Air Transport Association (IATA), the highly anticipated releases of electronic products such as the iPhone and Play Station 5 are traditionally shipped by air during Christmas and Black Friday.
The increase in air freight demand before the holidays caused rates to soar again. From October 12th to November 9th, freight rates between China/Hong Kong and the United States increased by nearly 46%, reaching US$7.40 per kilogram, more than double the same period last year.
American Airlines President Robert Isom said last month: “From August to September alone, we doubled our cargo volume and operated 1,900 flights, serving 32 destinations in the third quarter. Provide services locally."
We can tell our customers like this:
A surge in demand for airfreight during the pandemic, coupled with peak season needs, has pushed UPS/Fedex/DHL to once again raise fees on goods flowing from China to the foreign countries.
The surge in demand for air transportation during the epidemic, coupled with peak season demand, prompted UPS/Fedex/DHL, etc. to once again increase the charges for goods from mainland China to other countries.
With holiday season upon us, shippers are yet again forced to shell out higher prices. Decreased capacity and higher rates have been a staple this year, causing fluctuating prices in air cargo especially, and in order to secure space, shippers have paid higher rates and additional surcharges.
With the advent of the holidays, shippers are again forced to pay higher prices. Declining capacity and rising tariffs are the main things this year, especially because of the fluctuations in air cargo prices. In order to ensure space, the shipper paid higher rates and surcharges.
The International Air Transport Association Brian Pearce said at a recent press conference that all signs indicate that air cargo volumes will continue to grow for the rest of the year. And manufacturers (the main driving force of air transport) are particularly bullish. In response to this situation, what are the current measures taken by all parties?
3. What are the measures taken by all parties?
domestic
Faced with the huge increase in demand for international air cargo, airlines have also increased the delivery of international cargo flights . According to statistics, China's international cargo flights increased substantially at the end of October, reaching about 2.3 times the same period last year. All airlines have invested more cargo capacity, and the frequency of both all-cargo aircraft and "passenger-to-cargo" aircraft has increased significantly.
Wang Jianmin, deputy general manager of Eastern Airlines Logistics Co., Ltd., said that the number of "passenger-to-cargo" flights increased significantly in October and November, and there were more than 100 more flights in October compared with September. In November, the number of "passenger-to-cargo" flights increased to 1,000. Around, a substantial increase from October. In November, the utilization rate of freighters reached a peak of 14 hours per day, and some exceeded 14 hours.
foreign
Lu Dongmei, China's chief representative of Lufthansa, said that in order to meet the growing demand for cargo capacity, Lufthansa has turned passenger planes into cargo planes and filled their abdominal cavity with cargo that can fly around the world. In addition to the all-cargo operations 20 cargo flights a week, but China also conducted five weekly flights on passenger aircraft turnaround.
Canadian officials said that due to the impact of the epidemic, its e-commerce market is growing, and there is a chronic shortage of cargo aircraft. Air Canada plans to convert the Boeing 767, which has recently withdrawn from passenger service, to be able to carry large containers and pallets on the main deck. The premise is that the carrier needs to reach an agreement with the pilot.
DHL Express said that due to the grounding of most passenger aircraft, the abdominal muscle capacity is insufficient, although there are plans to provide air charter services to serve certain major markets. But this year still adds six aircraft, which is to overcome the air cargo capacity restrictions caused during the epidemic.
Finally, remind foreign trade friends who are shipping by air in the near future to communicate with customers on capacity in a timely manner, and to be cautious in quoting (each airline may adjust prices frequently) to avoid unnecessary losses.
In recent months, the container market has experienced extreme conditions. High freight rates and container shortages have plagued the market and will continue for some time. In addition to the short plug of the reefer, the import and export of the reefer will also be a new challenge.
Large companies and logistics companies that need to ship refrigerated goods must be prepared, and shipping companies have announced that they will stop receiving freezers.
It is reported that the shipping company Hapag-Lloyd announced that it will suspend all 40' freezer bookings in Germany, Austria, Switzerland, Hungary and the Czech Republic until the end of December 2020.
"Our goal is to support all confirmed export orders, but reservations may be cancelled for individual cases. We will try our best to provide all customers with the best service, but we expect that the situation will remain very tense in the coming weeks." Herb Roth wrote in a statement.
"This once again shows that the market is facing severe container equipment challenges. This is a prominent problem that affects the supply chain in many places, not just the supply chain in Asia." Shipping analyst and chief executive of Sea-Intelligence Consulting Officer Lars Jensen said.
In addition to Europe, Hapag-Lloyd announced on December 3 that the port was congested due to stricter customs inspection and disinfection of imported food entering Huangpu. From now on, we will temporarily stop accepting reservations for refrigerated containers entering Huangpu Port in China until further notice.
In view of the above situation, customers are kindly requested to provide written confirmation as soon as possible. You can have the following options:
(1) If circumstances permit, accept delivery at the current port of discharge;
(2) Transfer your refrigerated container to another port/destination;
(3) Transport your refrigerated container back to the port of departure;
(4) If there is no instruction from the customer, Hapag-Lloyd reserves the right to make all necessary arrangements.
Please note that for any of the above options, all additional costs, risks and liabilities related to storage or transportation of the goods after unloading will be borne by the owner of the goods.
At the same time, Hapag-Lloyd also announced that it will temporarily stop receiving orders for imported reefer containers from Busan, South Korea to Tianjin, China , with immediate effect.
In addition, my country has recently increased its inspection of imported refrigerated goods, making the inspection of refrigerated goods more stringent and time-consuming. Ports are facing problems such as slow pickup of containers and port congestion.
Ocean Network ONE stated in the announcement that it will suspend the delivery of refrigerated containers to Huangpu Port from November 26. In addition to the latest announcement of ONE, Xiamen, Fuzhou and Fuqing have also suspended receiving imported refrigerated containers.
ONE stated that due to the stricter inspection and disinfection requirements imposed by customs on refrigerated containers imported into Xiamen/Fuzhou/Fuqing, the delivery of freezer containers has been slow and is facing congestion.
In view of this situation, from the date of shipment on December 8, 2020, ONE will stop accepting all orders for refrigerated goods destined for Fuzhou and Fuqing, China , until further notice.
Starting from the loading date on December 9, 2020, ONE will stop accepting all reservations for refrigerated cargo to Xiamen, China or for transshipment via Xiamen , until further notice.
▲ONE announcement
For containers in transit, ONE strongly recommends that customers consider changing the destination to another port, especially for time-sensitive goods, such as fresh and refrigerated goods.
For refrigerated containers that have been transshipped to Xiamen, or refrigerated containers that have been detained at the transshipment port for further transportation to Xiamen, please note that all related expenses will be borne by the consignee and paid upon delivery.
For containers that have been transshipped to Fuzhou/Fuqing or detained at a transit port, once the Fuzhou/Fuqing feeder space is available, a specific surcharge will be charged at the time of loading.
The shift of manufacturing from China to Vietnam has also put pressure on the country's container supply chain.
According to the forecast of the International Monetary Fund, Vietnam's gross domestic product (GDP) will grow by 2.4%. As many other countries fall into recession due to the epidemic blockade, Vietnam is expected to become one of the fastest growing economies in the world in 2020.
According to Simon Vandekerckove, general manager of freight logistics giant Geodis Vietnam, procurement in Vietnam is entering a new stage. The factory is overbooked. We see that overseas customers have high expectations for Vietnam, but Vietnam does not have the necessary legal or logistics basis. Facilities to achieve this.
"Vietnam needs a lot of investment to increase new productivity and infrastructure to cope with increasing demand, and because customers want to reduce the financial risk of sourcing from only one region, Vietnam is likely to become an outsourcing region for other ASEAN countries such as Thailand and Indonesia. one."
At the same time, the shortage of global capacity and container equipment is putting pressure on Vietnam's main container ports.
A local freight forwarder in Vietnam said that the inland river terminal in Ho Chi Minh City has been congested for a long time, and the current market conditions have increased the waiting time. The export container yard capacity is 120%, and ships need to wait two to three days to find a berth.
He added: “In Cat Lai, all shipping companies’ outbound volumes have increased dramatically, but due to lack of space, about 10%-20% of the cargo must be transferred to the next ship each time.”
Vietnam’s largest deep-water port, Cai Mep, is letting ships wait 50 kilometers away. In October, the Cai Mep International Terminal (CMIT) operated by APM Terminal received the 20,000 teu Margrethe Maersk call, which is 2M One of the direct trans-Pacific routes.
The port used to have very large container ships docked (temporarily docked), but the current demand trend may cause more and more ships to come here. Next year, CMA CGM will cooperate with local operator Gemadept to open the newest terminal in Cai Mep.
Nevertheless, the current shortage of space and container equipment and the sharp rise in costs are still a huge challenge.
Vandekerckove explained: "According to all types of freight FAK and spot freight rates, bookings from Vietnam require two to three weeks in advance to secure containers and space. To the west coast of the United States, freight rates have increased by 140%, and the Mediterranean area has increased by 70%. , The Nordic region rose by 15%."
Mr. Vandekerckove said that in most cases, air freight is not an option, but road freight provides flexible options for some customers.
Drewry's report shows that the revenue of container port operators dropped by nearly US$1.9 billion in the first half of 2020. In addition to the well-known global epidemic, the decline in freight volume and port congestion are also reasons.
Drewry Port Analyst Eleanor Hadland said in the webinar: "The profitability of container ports this year is not as good as that of container ships... Our cooperative operator's transaction volume in the first half of this year dropped by 4%, while Drewry estimates global port handling volume. A decline of 5.6%... In the first half of the year, 80% of companies reported a decline in revenue. In terms of profitability, 70% of the companies’ profit before interest, taxes, depreciation and amortization in 2020 Lower."
Prior to the outbreak, Drewry predicted that sales in the first half of 2020 will increase by 4.8%. This is equivalent to a global revenue growth of more than 7%.
"However, due to a nearly 6% drop in sales volume, the revised estimate is now 5% lower than in 2019 and 11% lower than the pre-epidemic forecast. For the entire industry, we forecast the interest, tax, depreciation and amortization in the first half of the year. Pre-sales profit will drop by about 16% from 2019 and 21% lower than the forecast before the epidemic."
Most operators have taken cost-cutting measures. During the epidemic, due to the adoption of new working methods, and due to illness or quarantine requirements for workers, the terminal must pay for absenteeism, so the actual labor cost has increased.
Turkey-based operator Yildirim announced today that it will add a surcharge to cover the additional expenses during the new crown epidemic . The company said: “Since the beginning of the epidemic, Yilport Holding has taken additional measures to ensure the continuity of all business partners. However, the increased cost of additional health protection and protective equipment has made it difficult for us to balance our expenses. Since January 1, 2021 Starting today, we will charge an emergency surcharge for each import and export container ."
Martin Dixon, a shipping analyst, said: " The most important factor in the surge in ship operating costs is labor costs. Due to the inconvenience of crew changes, labor costs have soared . According to forecasts in 2019, labor costs can only increase by 1.3%, but in fact, in 2020 Labor costs rose by 6.2%."
Regarding the concealment of import and export goods, let’s look at a case first:
On August 4, a violent explosion occurred in the port area of Beirut, the capital of Lebanon, on the evening of the 4th. Preliminary statistics showed that at least 100 people were killed and more than 4,000 were injured in the explosion. The Prime Minister of Lebanon confirmed that up to 2,750 tons of explosive chemical ammonium nitrate stored in a port warehouse had exploded.
These ammonium nitrates were piled up in Beirut's port area for six years "without the necessary safety measures"!
It is understood that ammonium nitrate may explode when it is shaken or close to the fire source. The conditions of the explosion are not difficult to achieve. Nitric acid will decompose at about 180°C.
Prior to this, ammonium nitrate has caused too many major explosion accidents. Developed countries such as the United States, Britain, and France have all experienced the horror of the ammonium nitrate explosion. Bloody events are disasters for every country encountered, even for humans.
Everyone must have learned about this explosion from the overwhelming reports. However, this major accident called Lebanon’s national disaster is only one of many port and cargo ship accidents. It is not difficult to find that there have been several foreign explosions in the past. It happened in ports or in cargo ships or trains.
This is bound to be reminiscent of the safety of imported and exported goods, and under-reporting is a thing most hated by various cross-border companies.
Customs declaration: This batch of goods are toothbrushes.
Glass: Who is your name?
Customs declaration: This box of goods is paper towels.
Bath towel: You insult people!
...
These are all concealment of ordinary goods, and may only involve smuggling and other issues, but a concealment of dangerous goods is like sending an untimely bomb to freight forwarders, shipping companies, and port workers. Once an accident occurs, the consequences are disastrous.
Consequences of concealment of general cargo:
In order to evade tax, deliberately concealing part of the taxable goods constitutes smuggling. The specific legal consequences should be determined in conjunction with the amount of tax evasion.
Consequences of under-reporting of dangerous goods:
Serious accidents caused by improper storage and stowage locations; damage to the safety of the crew and the vessel; use of water guns to extinguish water damage to other containers and cargo in the cabin; delays to the entire route; huge operating costs, investigation costs, etc. Etc.; fines required by local maritime customs; customs detaining boxes for several years; may be classified as criminal smuggling and other crimes; pollution to the environment...
Measures to prevent false reports
1. Strengthen professional and safety knowledge education
As a cross-border industry practitioner, we must strengthen the training and education of hazardous materials and safety knowledge, and improve our professional service capabilities.
2. Strengthen the credit review of shippers
Strengthen the credit review of the shipper, and find out the actual source of the goods for the goods whose factory address and name are relatively acceptable. In many foreign ports, concealment of goods is a criminal responsibility, so practitioners must take it seriously.
3. Ensure clear declaration of product name
Make sure that the shipper’s declaration of the cargo brand is clear. If the declaration of the cargo name is vague and general, you must ask clearly. Some chemicals are suspected of being dangerous goods, and the shipper must be required to provide chemical safety instructions and corresponding test reports.
4. New customer information is true
In addition, you need to pay attention to whether the information of new customers is true, especially those new customers who do not need to provide customs declaration, warehousing, and towing services.
5. The product name is inconsistent with the bill of lading
If the product name is inconsistent with the bill of lading, the freight forwarder Yaao will take the initiative to check the customs declaration product name to ensure that the three orders of this batch of goods are consistent.
The US Federal Maritime Commission (FMC) threatened to use all its possible powers to overturn the decision of international shipping companies to abandon the export of American agricultural products and relocate empty containers instead.
The shortage of containers and market forces have caused some shipping companies to cut the container quotas of traditional American exporters to alleviate some serious problems in the supply chain. This has had a huge impact on US agricultural exports. Reports say that some cargo owners’ quotas have been reduced from 300 containers per month to three.
Under the vigorous lobbying of the U.S. Agricultural Transportation Union and its partners, FMC announced that it would investigate these measures.
"Some shipping companies have already stated that they will no longer deploy empty containers to inland agricultural areas of the United States. Instead, they are speeding up the delivery of empty containers back to Asia." FMC Chairman Michael Khouri said at the Global Maritime Conference.
"This approach is to keep U.S. agricultural exports out of the global market. We are investigating and possible response measures, including reviewing whether the actions of these shipping companies are in full compliance with the Shipping Act, and more specifically, the Act. "Prohibited Acts" clauses in the "Prohibited Acts"," he said.
At the end of October, the shipping company Hapag-Lloyd has decided to suspend export bookings for soybeans and other agricultural products from the United States in order to return empty containers to Asia to load imported goods from the United States instead of shipping containers to the inland United States.
Earlier this month, the Special Soybean and Grain Alliance (SSGA), a US agricultural transportation organization, stated that the lack of containers and its members’ inability to load exported goods is prompting Asian customers to investigate other food buyers.
SSGA Executive Director Eric Wenberg said: "Our members have heard from Asian customers that they doubt that the United States and its agricultural exporters will continue to be reliable suppliers based on the difficulties of today's multimodal transportation."
"Marine shipping companies need to work with us to solve these transportation problems and ship our goods back to Asian ports. Otherwise, the United States has been a reputation for exporting high-quality food to foreign customers and we must take action." He added.
Magic 2020, the shipping industry has breaking news every day, and it always affects the hearts of foreign trade forwarders.
Today, the Moments of Friends screened the video of the driver grabbing the box. Truck drivers flocked to "queue" to pick up the cabinet. You earn and I grab one box, and they are almost "fighting".
This is a real response. Even if the shipping company normally releases the cabin, there is no guarantee that there will be boxes. It is difficult to find a box in China.
Another heavy news is that CMA CGM will directly stop accepting bookings from Asia to Europe in the next three weeks, and temporarily stop bookings on the Asia-Northern Europe route in the 49th, 50th and 51st weeks. The European route has basically ended this year. Booking.
In recent months, due to the uneven recovery of the global economy, the rebound of epidemics in many countries, and the arrival of traditional transportation seasons such as Christmas and New Year, congestion has occurred in many European and American ports, but many domestic ports are extremely short of containers.
Under such circumstances, many large shipping companies impose additional charges such as congestion surcharges, peak season surcharges, and shortage of containers.
Following the further surge in freight rates on the European and Mediterranean routes last week, data shows that this week, China’s export container shipping market performed stably, and transportation demand remained stable. The freight rates on most shipping routes rose, which led to a rise in the composite index.
The largest increase was the year-on-year growth rate in Northern Europe of 196.8%, the year-on-year growth rate in the Mediterranean Sea was 209.2%, and the year-on-year growth rates in the West and East of the United States were 161.6% and 78.2%, respectively. 390.5%.
Shanghai Export Container Freight Index
As Christmas approaches, shippers and their freight forwarders in Europe and North America continue to generally face the problems of container shortages, port congestion, declining capacity and soaring freight rates. Many people in the industry are talking about the current "peak season" in the container industry. "When will it end?
According to the latest analysis conducted by Lar Jensen, CEO of shipping analysis agency SeaIntelligence, on behalf of the Baltic Exchange, the answer is likely to be around the Lunar New Year holiday in February, because the options available to supply chain stakeholders are very limited.
Chinese New Year will mark the end of the "peak season" of the container industry
The root cause of the current problem is the unexpected demand for container cargo due to the global social blockade.
Jensen said that there are three key issues in meeting higher levels of demand: container, ship and port capacity constraints. He wrote: "If demand decreases, the problem will be resolved immediately."
"However, shipping companies may show their determination to reduce capacity again in order to cope with the downward trend in demand. This means that very high spot freight rates will drop, and new equipment available surcharges will disappear, but the interest rate will not It's too likely to crash." He added.
In these strange years, it is difficult for the industry to reach a consensus, but there are few signs that consumer demand will decline in the short term.
Jensen said that for many shippers and freight forwarders, the most pressing problem is the serious shortage of containers, but as China's container manufacturing plants are in full production, this problem may be alleviated before the Chinese New Year on February 12.
"This problem can be solved within a few months." He said: "The solution is that the empty containers are shipped back from Europe and North America faster, coupled with the full work of China's container factories... The current situation can be After the Spring Festival, it ended peacefully."
However, it will take longer to solve the problem of global ship and port capacity. When the capacity is insufficient, the traditional approach of shipping companies is to turn to the leasing market. However, due to the surge in demand, only a few boats are available for hire.
"As a result, the time scale for increasing capacity has changed from weeks to years now, because it will require the construction of new ships. Moreover, since the peak demand may be temporary, this solution will not help solve the problem." He wrote.
Another option for shipping companies is to increase their ship speed. Faster service can free up the structural capabilities of the shipping group, although this does increase costs.
"In general, considering the optimization of fuel, when modifying or building these ships, they cannot sail as fast as ten years ago, but there is still a certain degree of additional capacity that needs to be activated. However, this also comes at a cost. , Including the sharp increase in carbon emissions."
Finally, there is the issue of port inventory, which he admits is almost powerless in the short term.
"The surge in demand and the increase in ship arrivals have not only affected the number of containers that the port can handle, but also the number of ships that can be berthed and served."
"In addition, the surge in demand has caused larger ships to arrive with more cargo than originally planned, which means longer berth stays, a chain reaction, and subsequent ships will be delayed."
"The expansion of the port's capacity can only be measured in a few years at most. In some areas, large expansion projects can take up to 10 years."
