supply chain Archives

December 11, 2020 / By TJ China Freight / Shipping

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

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.

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

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.

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.

December 11, 2020 / By TJ China Freight / Shipping

Severe congestion and long waiting time, Vietnam’s largest deep-water port is waiting for a berth 50 kilometers

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.

December 11, 2020 / By TJ China Freight / Shipping

The monthly volume of 300 boxes has been reduced to 3, and the shipping company has suspended the delivery of American agricultural products and is warned by the FMC investigation

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.

December 9, 2020 / By TJ China Freight / Shipping

Space booking is suspended, freight rates continue to soar

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".

Truck drivers "grab the box" are popular! Space booking is suspended, freight rates continue to soar, analysis agency: the peak season of the Chinese New Year container shipment may end

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%.

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.

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."

December 8, 2020 / By TJ China Freight / Shipping

The freight rate in Europe and the land will continue to rise after the soaring

After a further surge last week, the spot freight rate for containers from Asia to Northern Europe is now 130% higher than the beginning of the year, up 200% year-on-year. The Far East-Europe trade route is still under tremendous pressure, and the freight rate will continue to rise further.

In the current peak season, the influx of imported goods from Asia into the United States does not seem to have eased. Los Angeles and Long Beach are still in a state of collapse and paralysis. There are as many as 20 ships lining up near the west coast, waiting for the empty space in LA Long Beach Port to unload.

Australian ports remain congested, with more than 75,000 teu stranded in Sydney.

Freight rates in the Asian intra-route market remained stable, but from the same period last year, freight rates across Southeast Asia have increased by a staggering 390.5%.

The freight rate in Europe and the land will continue to rise after the soaring, and the shipping companies will continue to gather wool! Congestion in West America, 20 ships in Long Beach Port line up for unloading

Europe-to-land route : The North European spot freight rate of the Shanghai Container Freight Index (SCFI) just released by the Shanghai Shipping Exchange increased by 13.5% to US$2,374 per TEU, and the Mediterranean freight rate increased by US$165 to US$2384, spot The freight rate increased by 7.4%. It is worth noting that the year-on-year growth rate in Northern Europe was 196.8%, and the year-on-year growth rate in the Mediterranean was 209.2%. But in fact, the market freight rate is much higher than this.

A Shanghai-based non-vessel carrier said that several shipping companies are currently offering more than US$6,000/40-foot container to Rotterdam and more than US$8,000/40-foot container to the UK.

A freight forwarder in China stated that the carriers on this route are now purely focused on maximizing freight revenue, regardless of all other agreements. He said: "Shipping companies only give priority to higher-priced spaces-whoever pays more will get the space."

Christoph Baumeister, senior trade manager for Flexport Asia/ISC-Europe, said the situation for Asian shippers was “worse than week after week”. He added: "The Far East-Northern Europe/Southern Europe trade route is still under tremendous pressure, and freight rates will rise further this week."

Moreover, according to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe of three months or less is 200% higher than a year ago, at $4,831 per 40 feet.

Although Xeneta’s long-term contract freight data showed an increase of 28% to US$1,648 per 40 feet, it pointed out that despite the peak contract season, few deals have been concluded because shippers and carriers think it’s not the time.

In the trans-Pacific region , the spot freight rate remained basically unchanged last week and stabilized at a record level. According to SCFI data, the spot price on the west coast of the United States rose by US$68 to US$3947 per 40 feet, while the port price on the east coast fell by US$8. To $4,700 per 40 feet. The year-on-year growth rates of the West Coast and East Coast of the United States were 161.6% and 78.2%, respectively.

Since mid-September, due to the intervention of Chinese regulatory agencies, the spot market on this route has remained stable, and shipping companies hope to obtain guaranteed income from their premiums.

As the influx of merchandise imports from Asia into the United States during the peak season did not seem to ease, the Port of Los Angeles data confirmed that the port's imports in the 50th and 51st weeks increased by 37% and 54% year-on-year respectively.

The continued growth of imports has put tremendous pressure on the San Pedro Bay ports in Los Angeles and Long Beach. Freightos Chief Marketing Officer Eytan Buchman said: "There are reports that as many as 20 ships are lining up near the west coast, waiting for the unloading of empty spaces in the Port of Long Beach, LA. Retailers are eager to put these goods on the shelves before the holidays."

As for Australia and New Zealand routes , with the gradual improvement of the epidemic situation and the continuous growth of transportation demand during the traditional peak season, the market freight rate has increased. According to the SCFI index, the freight rate (sea freight and ocean freight surcharge) for exports from Shanghai to the basic port of Australia and New Zealand was US$2490/TEU, up 2.5% from the previous period. But the Australian shipping business is currently in a "state that has never been so bad."

The continued "chaos" in the Australian container supply chain will mean that some retailers' shelves will be empty during Christmas.

The impact of supply chain delays caused by the Maritime Union of Australia (MUA) strike in early October continues. The shipping company stated that the disruption of shipping schedules caused a backlog of "8 to 10 weeks" delays (8 weeks of delay means that retailers will not have inventory "until January of next year"), but the union denies that this is the reason. Rather, it points to the increase in demand during the peak season.

According to the Freight and Trade Alliance (F&TA), trade imbalances, resulting in a large surplus of empty containers and lack of storage areas for storing these containers, are still the main problems hindering the supply chain. F&TA Director Paul Zalai said: “Currently, it is estimated that the imbalance of containers is 75,000 teu, which is stranded in Sydney’s empty container yard and operator’s warehouse. The surplus of empty containers will cause Sydney’s logistics to fall from the current congestion state to an unsolvable situation. deadlock."

The peak season demand has increased the spot freight rate from China to Melbourne to US$2490, compared with US$1648 in mid-October. Paul Zalai believes that the country’s shipping industry has “never seen such a bad situation.” He explained: “Our ports are congested, services are limited, freight prices are at record highs, detention, congestion and terminal access surcharges continue to increase. "At the same time, similar shipping delays have also affected importers in the Tasman region. Due to the chain reaction caused by port congestion in Australia, the Port of Auckland in New Zealand experienced delays this year.

The market freight rates of intra-Asia routes also remained stable last week, but from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%.

Although these are eye-catching figures, it is important not to forget that 65% to 75% of all goods are transported on the basis of contract freight rates rather than spot market freight rates. However, due to the exhaustion of the number of contracts (many contracts are in unexpected periods when consumer demand is out of control) the rest tends to the spot freight market. When contract negotiations restart next year, the strong bull market will also benefit shipping companies.

Andy Lane of CTI Consulting in Singapore commented: “There is still one month before the new Asian-European contract. This is under the background of record-breaking spot freight rates. Prices may rise sharply, which will have a real impact on the market."

December 4, 2020 / By TJ China Freight / Shipping

Where did the empty containers go?

In the past few months, due to the severe shortage of available empty containers, the global supply chain has been hit, causing exporters to have a headache. However, new research shows that there is an obvious problem in the container supply chain-empty containers stay in warehouses for an average of 45 days, while in China, the average time for each idle container is more than two months.

The research project of German company FraunhoferCML and Container xChange shows that although China and the United States urgently need containers, the average residence time of empty containers in warehouses is 61-66 days, which is much higher than the global average of 45 days.

The east coast of the United States is usually the location of surplus container equipment (the 40DC container availability value was 0.7 last year), but the container availability rate dropped to 0.43, indicating that there are actually fewer containers than needed.

The researchers said that compared with the Middle East (21 days on average) and Europe (23 days on average), the high standard deviations of 85 days in North America and 129 days in Asia indicate that in many cases, containers stay in warehouses longer than average. Much more.

Container xChange is a platform that connects users and suppliers. The platform stated that the availability of containers across China is still at a record low, while the surge in shipping containers from Asia has overwhelmed US ports, and retailers are eager to put their products on the shelves.

Not only is there a serious shortage of 40-foot tall containers (hc) in the shipping market, but there is also a shortage of 40-foot standard containers, and even 20-foot containers are sometimes in short supply.

The container availability rate of 40HCs is only 0.05 CAx (container availability rate) points, compared with 0.63 in the same period last year.

Asia's container manufacturing industry is working overtime to produce, which accounts for 45% of the global container manufacturing market. China International Marine Containers, the world's largest container manufacturer, announced an increase in its orders.

The factory is stepping up container building, and container orders have been scheduled to the first quarter of next year. Even so, the demand for millions of containers has made it impossible for container manufacturing to quench its thirst. The world's three largest container leasing giants have issued a warning that the shortage of containers will continue for four months.

Chinese shippers and freight forwarders all over the world "seeking" empty containers, but where did the empty containers go? The answer is simple, it is blocked in other ports.

While the Asian port and shipping industry is desperately desperate for empty containers, although there is a shortage of shipping capacity, price increases can be used to push shipping companies to cancel suspending, refilling, and increase shipping capacity; however, a large number of containers full of cargo are seriously stranded in European and American ports and warehouses. , Unable to move.

In order to alleviate the serious imbalance in equipment, shipping companies have adopted an active strategy for exports to Europe and the United States, suspending orders, and preferring to use as many empty containers as possible to fill return ships.

In fact, in order to prevent all but the most expensive goods, European exporters to Asia are required to pay more than $5,000 per 40-foot container to ensure shipment in December. A British freight forwarder said that many shipping companies now refuse to accept export orders before mid-January. "Our customers are willing to pay such a high freight, but due to port congestion, we are still working hard to get the boxes away. Some boxes have been on the dock for more than four weeks and still don't know when they will be shipped."

At the same time, the urgently needed empty containers in Asia are scattered in warehouses across Europe, especially in the United Kingdom, where troubled ports have to restrict container delivery to already overcrowded terminals.

The current shortage of containers is a once-in-a-century problem in the history of the global supply chain, and it is basically unsolvable in the short term.

November 27, 2020 / By TJ China Freight / Shipping

The port in South Asia is in chaos and congestion.

It is reported that the Port of Colombo has a backlog of 50,000 teu of cargo, causing South Asian transshipment cargo into chaos.

In the past few weeks, the Sri Lankan capital has been locked down due to the epidemic, and since the beginning of October, the city’s container terminal labor shortage has caused serious congestion.

Today, this dilemma is affecting the supply chains of neighboring India and Bangladesh.

According to Rohan Masakorala, CEO of Shippers' Academy Colombo, the Port of Colombo has reduced the number of employees by about 30%, which has dealt a major blow to the efficiency of crane production and trucking between freight stations.

"The backlog of orders and goods is very large, and it may take six to eight weeks to clean up."

"Colombo International Container Terminal (CICT) mainly focuses on transshipment, while the other two terminals are responsible for feeder ships, so there is an urgent need for transshipment between terminals." He said.

"The lack of truck drivers means that containers are starting to accumulate in the storage area of the port. This also means that it affects feeder ships, sometimes waiting for more than a week, and then even the mainline ships have to be delayed by one to two days."

▲Colombo port congestion: a backlog of 50,000 TEUs caused delays and increased freight rates

Masakorala said that given that Colombo handles approximately 600,000 TEUs per month, regional feeders and connectivity are being severely damaged, and carriers are forced to ship containers to India, Singapore and Dubai.

He added: “Of course, Colombo is not the only port affected by the new crown epidemic, but as a transshipment hub, the impact is much greater and the entire region will be affected. Even now, there are still 23 ships waiting for berths, and Usually the port receives 12-16 ships every day, so there are quite a lot of ships waiting at the window."

He explained that it is inevitable that Colombo’s freight has doubled, and shippers need to book eight weeks in advance to get a seat.

Masakorala said: “Some shippers have been waiting in Colombo for four weeks and two weeks in Singapore.” “Freight forwarders have been severely affected, so some urgent cargo must be transported by air or to a third port, which increases Cost and shipping time."

He added that, given that ports in India, Bangladesh and Pakistan are fully operational, there are now concerns that the port’s reputation may be damaged. Sri Lanka is ambitious and hopes to become a global shipping and logistics hub as famous as Dubai and Singapore. However, Mr. Masakorala said that the LCL loading and unloading and customs clearance and consolidation operations of FCL have been "seriously affected."

Recently, foreign trade forwarders who transshipped through this port have mainly paid attention to it, for fear of delays and additional costs.

Colombo handled 7.2 million TEUs in 2019, but Mr. Masakorala believes that the port’s throughput will drop by 10-20% this year.

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Tag: <span>supply chain</span>

Refrigerated container transportation is tightening, not only in China, shipping companies also suspend receiving cold container space bookings for these 5 European countries

Severe congestion and long waiting time, Vietnam’s largest deep-water port is waiting for a berth 50 kilometers

The monthly volume of 300 boxes has been reduced to 3, and the shipping company has suspended the delivery of American agricultural products and is warned by the FMC investigation

Space booking is suspended, freight rates continue to soar

The freight rate in Europe and the land will continue to rise after the soaring

Where did the empty containers go?

The port in South Asia is in chaos and congestion.