The air cargo market has ushered in a new year, but there is no sign of cooling. International transportation activities usually weaken after the holiday season, but due to the unusual air transportation mode and the severe shortage of air transportation caused by the new coronavirus pandemic, demand and freight rates remain high.
The logistics company expects that the air cargo volume will not decline before the Spring Festival, because the manufacturer plans to continue operations during the traditional holidays.
The latest comprehensive statistics of World ACD and CLIVE Data Services in December show that compared with 2019, air cargo volume has fallen by only 3.7% to 5% respectively. These data show that the air cargo industry has recovered a lot since it bottomed out in May last year, when demand dropped by nearly 40%.
The demand for air transportation is largely driven by continuous inventory replenishment, the inventory-to-sales ratio of consumer goods is close to the lowest level in history, and a saturated marine container market. Analysts and logistics providers said that the congestion of ports and railways and the shortage of empty containers continue to push up shipping prices and cause serious delays, especially for main routes from Asia, which promotes a further increase in aviation demand.
The goods sought for air transportation include automotive equipment, consumer goods purchased online, and medical supplies related to COVID-19. Airplanes are also used to transport the new crown vaccine, because a large number of vaccines are transported by land, and sometimes only a few containers are needed for each flight, so it is not clear how many ordinary goods they replace. Nevertheless, when the capacity is tight, the vaccine will be given priority to board the plane.
San Francisco-based freight forwarding company Flexport said in a customer advisory update report that the remaining demand for game consoles and smartphone product releases in the fourth quarter will increase capacity constraints by mid-February.
Bruce Chan, vice president of global logistics at investment bank Stifel, said in a monthly comment that shippers are also more inclined to use air operations as an inventory buffer because their forecasting models have been completely overturned by the epidemic. He wrote: “Predicting consumption patterns and when they will stabilize is a huge fear, and the path forward is hardly linear, especially when the new coronavirus reignites and the government further implements blockades and border closures.”
In addition, many Chinese manufacturers announced that they will continue production during the Lunar New Year period from February 12 to 26. Factories are usually closed for 10 days or longer so that workers can celebrate with their families, but because the Chinese government encourages workers to celebrate the New Year on the spot, many factories will continue to operate this year. Flexport said this could create a backlog, as many freighter flights were cancelled a few weeks ago due to the expected full transport. Any backlog will depend on whether the factory continues to produce or take vacations at home.
The demand for air freight is so strong that experts predict that by the end of March the market will return to the level before the epidemic. This trend is in sharp contrast to the passenger traffic of the aviation industry, which is expected to remain sluggish until vaccination becomes more common in the second half of the year. Even then, the recovery of international travel may be slower, which means fewer aircraft for long-distance trade. Aviation industry officials said they don’t expect a full recovery until 2024.
Globally, freight rates are more than twice what they were a year ago, and freight rates from China to Europe and the United States are 2.5 times what they were a year ago. According to data from digital sales platforms, market information services and freight forwarders, the aircraft on these routes are full.
According to World ACD data, the average freight rate soared by 80% in December last year, from US$1.80 per kilogram to US$3.27 per kilogram, the highest year-on-year increase since May last year, but it fell by 10% since January this year.
Freight rates are under tremendous pressure, because although more all-cargo operators have added freighters and flights, global capacity is still about 20% lower than 2019 levels. The main culprit is the insufficient supply of wide-body passenger aircraft on international routes, most of which are still grounded due to the poor travel market. In fact, with the strict implementation of travel restrictions, airlines will reduce flights in the first quarter. For example, Air Canada and WestJet suspended 25% and 30% of their system capacity in the first quarter.
According to data from the International Civil Aviation Organization, the global all-cargo fleet increased by 22.4% to 673 aircraft in 2020. Airlines continue to increase capacity, including improved aircraft from passenger airlines, but this is not enough, because the space shortage is three to four times the decline in demand, and the gap may be even greater in the short term.
In the past month, Qatar Airways has added three Boeing 777 freighters to its fleet, and China Airlines and AirBridgeCargo have each added a factory-built aircraft. Swiss International Air Lines has added Seoul, South Korea and Lima, Peru to its cargo network. The flight from Zurich will be operated by a 777-300 extended-range passenger aircraft dedicated to cargo. The flight from Zurich will be operated by a 777-300 extended-range passenger aircraft dedicated to cargo.
In the past year, many freight forwarders have greatly increased the use of dedicated charter flights to ensure that they can provide transport capacity to their customers. German logistics giant DB Schenker significantly expanded its private aviation network last week. Now it has two routes, connecting Europe, Asia and North America for the first time. The cargo management company controls a total of 43 Boeing 747 or 777 freighter flights every week-equivalent to the space of a 135 wide-body airliner. Munich Airport is the hub for DB Schenker's intercontinental cargo between the United States and Asia.
In 2020, the new crown pneumonia virus has swept the world, and people are shrouded in the haze of the epidemic. However, with the advent of the New Year, the epidemic has not eased, but has worsened in many countries. It can be seen that the global anti-epidemic situation is extremely severe.
Current situation in China
The most severely affected area in China is Hebei Province. As of 24:00 on January 11, 2021, Shijiazhuang and Xingtai have screened a total of 364 positive cases.
Regarding the epidemic in Shijiazhuang, Zhang Wenhong, a well-known Chinese expert, said about the epidemic in Shijiazhuang: The recent epidemic in Shijiazhuang has obvious clustering characteristics, and it can be controlled within a few weeks or a month before it reaches the stage of dispersion. We are confident about this.
With the approach of China's most important Spring Festival, many people worry that the epidemic will affect Chinese suppliers. Will it have an impact?
Industry insiders indicated that unless we see other major epidemics in mainland China, we can expect most factories to produce normally. It must also be mentioned that the Chinese government has introduced a series of measures to prevent the spread of the epidemic.
• Epidemic prevention measure 1: vaccination
According to reports, as more and more new crown vaccines around the world are approved, experts predict that the new crown epidemic will improve or be brought under control. The good news is that China's State Food and Drug Administration has approved three new coronavirus inactivated vaccines for the market, which will mean that domestic large-scale vaccination may begin quickly.
According to the national plan, the new crown vaccination plan will be divided into two steps. The first step is to vaccinate key populations, including: staff engaged in import cold chain, port quarantine, ship piloting, aviation air service, fresh food market, public transportation, medical disease control and other high risk of infection, and going to medium and high risk countries or regions People who go to work and study.
The second step is to achieve gradual universal vaccination. Based on the vaccination of high-risk groups and key groups that has been carried out and is being carried out, my country will gradually and orderly promote the vaccination of the elderly and high-risk groups with underlying diseases, and follow-up vaccination for the general population.
There may be differences in the specific plans for appointment vaccination between provinces. For example, according to the Weibo news of “Sichuan Release”, the first vaccination of key populations is expected to be completed before January 15 and all doses will be completed before February 5. Times of vaccination.
In this regard, you can explain to the customer like this:
China has begun a nationwide drive to vaccinate some 50 million front-line workers against the coronavirus before the Lunar New Year travel rush next month.
Before the peak of the Spring Festival travel season next month, China has begun to promote the anti-coronavirus vaccine for nearly 50 million priority people nationwide .
China has officially started vaccination to high-risk population since December 15, 2020, and the Chinese authorities said it has administered 9 million doses around the country, proving that the Chinese vaccines are safe. It is expected that China is highly likely to ensure a domestic vaccines capacity of more than 2 billion doses in 2021 to meet the target of at least 70 percent of Chinese get vaccinated to achieve herd immunity.
Since December 15, 2020, China has officially begun to vaccinate high-risk groups. Chinese authorities have stated that 9 million doses of vaccine have been vaccinated nationwide and these vaccines are safe. In addition, China is likely to ensure that its domestic vaccination capacity exceeds 2 billion doses in 2021, so that at least 70% of Chinese people will be vaccinated to achieve the goal of herd immunity.
In addition to vaccines, the Chinese government this year also encouraged migrant workers to "unnecessarily not return to their hometowns and celebrate the New Year on the spot."
• Epidemic prevention measures 2: Call for the New Year on the spot
As the Chinese New Year (February 12 this year) is approaching, many people who work abroad are ready to return to their hometown for the holiday. Zhu Wenzhong, deputy director of the passenger transportation department of China National Railway Group, said that during the "Spring Festival" period from January 28 to March 8 this year, 407 million trips are expected, which will be 93% higher than last year (because of the outbreak in Wuhan last year) Interrupt).
In addition, due to the fact that the local epidemic situation in my country is spreading at multiple points and local clusters are intertwined and superimposed. The State Council's Joint Prevention and Control Mechanism Comprehensive Team recently issued the "Notice on Doing a Good Job in the Prevention and Control of the New Coronary Pneumonia Epidemic During the New Year's Day and Spring Festival of 2021", pointing out that migrant workers should be guided to stay at the construction site for the New Year when conditions permit. Beijing, Shanghai, Anhui, Henan, Shandong and many other places have recently issued recommendations not to return to their hometown if they are not necessary during the Spring Festival, encourage flexible vacations, and advocate non-necessary not to leave their work place and celebrate the holidays locally.
At present, many local governments have issued notices calling on people to stay at work to prevent the spread of the virus, and the China National Railway Corporation announced that any train tickets booked before January 7, 2021 can be refunded.
In this regard, you can explain to the customer like this:
China's cabinet has also urged employers to be flexible about this year's Lunar New Year break. "In a bid to prevent transmission and control the pandemic, we encourage companies and enterprises to make flexible arrangements for the holiday and guide employees to spend the vacation in the area where they work," the State Council said in a notice recently.
The State Council of China also recently issued a notice stating that it encourages business owners to implement flexible vacations, and advocates not leaving their work place if necessary and spending holidays on the spot.
Many local governments have issued notices this week calling on people to stay home to prevent the spread of the virus, prompting China State Railway to announce that any train tickets booked before Jan.7th could be refunded.
Many local governments have issued notices this week calling on people to stay at home to prevent the spread of the virus, prompting the China National Railway Corporation to announce that any train tickets booked before January 7 can be refunded.
So, in addition to telling customers the latest information about the epidemic in China and related measures, what do foreigners need to do? That is: take advantage of the situation to remind orders.
•Use the opportunity to remind orders
According to a report by Global.com, due to the approaching Chinese New Year, companies from various European countries have recently imported Chinese goods on a large scale. They said: When the Chinese have a rest for the Spring Festival, we will not be able to buy anything even if we have money! It is worth mentioning that most of the sudden increase in orders are medical items related to epidemic prevention.
In addition, the German weekly "Der Spiegel" recently reported that as the Chinese New Year is approaching, European traders are beginning to worry about the suspension of production in Chinese factories, the bottleneck in logistics, and the continued increase in prices, and they are speeding up the booking of Chinese defense products.
Faced with such a situation, the People's Congress of Foreign Trade can take advantage of this situation to urge orders. Generally speaking, before the Spring Festival, we will send notices to our customers to inform them of the time when the factory will stop production and the time to start work after the year, so that customers can be prepared. However, this year’s situation is special. Due to the impact of the epidemic, the delivery time is longer than before, so we can advise customers to arrange their orders in advance.
In this regard, we can say this:
The delivery date might be longer, so we suggest you placing order at an earlier date, then we can occupy the production line for you and deliver goods at an earlier time. In addition, you can grab the market share earlier. Now we are still receiving orders every day, if you have pending orders, please hurry up.
Due to the impact of the epidemic, the delivery time is longer than before, so it is recommended that you place an order in advance. So we can help you arrange production as soon as possible and deliver as soon as possible. After you receive the goods as soon as possible, you can occupy the market share in advance. In addition, many customers are placing orders now, so if you have a demand, please place an order as soon as possible.
In addition to the three main orders of "equipment handover form", "station receipt" and "handover record", container transportation usually includes the following 10 types of documents.
(1) Booking form
The booking list is prepared by the shipping company or other carrier when accepting the shipper's (or shipper's) booking, according to the shipper’s verbal or written application, recording the cargo consignment, and used to arrange container cargo transportation. The main contents of the documents and booking list include: cargo name, number of packages, packaging style, mark, weight, size, port of destination, settlement period, transshipment period, whether it can be transported in batches, transshipment, etc.
(2) Booking list
The booking list is a list of the delivery and loading places of different goods drawn by the shipping company or its agent according to the contents of the booking form.
(3) Packing list
The packing list is the only document that details the name, quantity and stowage of the goods in each container. When the container is used as a unit for transportation, the container packing list is an extremely important document. It is the basis for cargo declaration, handover, etc. The weight of the cargo and the container recorded on the document is used to calculate the ship’s draught difference and stability. Basic data of sex. When cargo damage or cargo difference occurs, it is also one of the original basis for handling accident claims.
(4) Annotation list
When the container terminal yard or container freight station receives goods, if the goods are found to be abnormal, the content and extent of the abnormality should be recorded in the remarks column of the station receipt, and then a document is compiled based on these contents. This document is called the endorsement list.
(5) Shipping order
The bill of lading is a document signed and sealed by the carrier or its agent. It is not only a certificate for consignment of the goods, but also a certificate for notifying the ship to accept the shipment of the carried goods.
(6) Loading list
The loading list is the cargo consigned by the carrier or its agent according to this voyage. The goods of similar nature are classified according to the order of arrival at the port, and then a summary list of loading orders is made.
(7) Bill of lading
The bill of lading is a certificate issued to the shipper or shipper by the container transport operator or its agent after receiving or taking over the goods, proving that the transported goods have been received or loaded on the ship, and are to be transported by sea. The port delivers the goods to the legitimate bill of lading holder. It is also a kind of transportation contract between the transportation company and the owner, which reflects the right of the recorded direction of the goods. It is usually circulated by endorsement, which is a pledge. The main ancillary documents of the remittance bill are divided into the bill of lading and the bill of lading for receipt.
(8) Empty container handover order
The empty container handover form is a document filled out when the shipper uses the shipping company's container, and the shipping company instructs the container custodian to deliver the empty container to the holder of this document.
(9) Guarantee
In the process of container transportation, the carrier’s responsibility is calculated from the time of receiving the goods. Therefore, the goods and container damages that have occurred before the goods are received are recorded in detail on the station receipt, and this record is transferred to the bill of lading. In fact constitutes an unclean bill of lading.
(10) Cargo Consignment Form
A container cargo consignment note is a written certificate issued by the shipper (consignor or freight forwarder) to the carrier or its agent in accordance with the relevant clauses in the first contract and the letter of credit.
Poorly packaged containers, coupled with the shipper’s misunderstanding of the dangers of certain non-dangerous goods, may cause more than $6 billion in losses to the supply chain each year.
The well-known freight and transportation insurance company TT Club stated that “analysis consistently shows that two-thirds of accidents related to cargo damage are caused or exacerbated by bad practices when packing cargo into containers.”
And explained: "This misconduct in the supply chain has caused millions of dollars in losses, including the death of seafarers and major delays caused by container ship fires. Based on known data, all such incidents are estimated to cause economic losses of more than 6 billion US dollars each year. ."
TT Club Loss Prevention Manager Michael Yarwood added: “The danger is not limited to chemical cargoes such as paints, cosmetics, cleaning products, fertilizers, herbicides and aerosols.
"A wide variety of consumer products and parts used in the manufacture of industrial products, household white goods and automobiles, if handled improperly during transportation, could cause major disasters."
"The list is long, and often surprising-barbecue charcoal, battery-powered electronics, fireworks, hand sanitizer, wool, cotton, plant fibers, marble, granite and other building materials, fish meal, seed cakes, etc."
He said: "Enterprises involved in purchasing, importing, storing, supplying or selling such goods should ensure that their procurement and logistics standards reach the highest level."
He urged shippers to refer to the "Code of Practice for Cargo Transport Unit Packaging" ("CTU Code") jointly published by the International Maritime Organization, the International Labour Organization and the United Nations Economic Commission, which is the industry's closest regulation on container packaging.
Mr. Yarwood said: “It provides comprehensive information on all aspects of packaging and securing goods in freight containers and other modes of transportation under sea and land transportation. It can not only guide the personnel responsible for packaging and securing the goods, but also guide the collection Cargo and unpacking personnel."
He added: "This also solves the crucial issue of correctly describing and declaring goods, including any specific information about the handling of dangerous goods."
He said: "In addition to the serious health and safety risks already described above, poorly packaged containers may also cause damage to adjacent cargo in the event of an accident and cause significant consequences to the shipper."
After the freight rate in the trans-Pacific market has remained stable for a period of time, it has recently started a rising mode.
According to the Freightos Baltic Daily Index (Freightos Baltic Daily Index), on December 28, 2020, the freight rate of the Asia-US West Coast route reached US$4,189/FEU, a record high, an increase of 8% from December 25, which is the year of 2019. 3 times over the same period.
At the same time, the freight rate of the Asia-US East Coast route also reached an astonishing US$5397/FEU, a 9% increase from December 25 and twice the rate of the same period in 2019.
According to data from the Shanghai Shipping Exchange, on December 25, 2020, the freight rates (sea freight and ocean freight surcharges) for exports from Shanghai to the basic port markets of the West and the East of the United States were 4,080 USD/FEU and 4,876 USD/FEU, respectively. The US West route rose 4.6% from the previous week.
Analysts of the Shanghai Shipping Exchange said that the average space utilization rate of ships on the Shanghai Port to the West and East U.S. routes maintained at a level close to full load. However, the U.S. epidemic has blocked the turnover of containers, and a large number of containers are stranded at the local terminal. The congestion of the port is increasing, and the shortage of containers has not been alleviated.
In addition, a number of shipping companies including CMA CGM, Hapag-Lloyd, Evergreen Shipping, HMM, ONE, Yangming Shipping, and Star Shipping have announced that they will start on the trans-Pacific route from January 1, 2021. , Charge a comprehensive rate increase surcharge (GRI) ranging from US$1,000 to US$1,200/FEU.
The market predicts that the upward trend of freight rates will continue until January 2021.
In contrast to the fast-growing transportation demand, after a fully loaded ship arrived at the US West Port, it faced the dilemma of nowhere to stop.
According to a report released by the Marine Exchange of Southern California on December 28, 2020, a total of 24 container ships are anchored in San Pedro Bay, and another 5 ships are about to arrive.
According to the report, the local conventional anchorages are full of ships, and some emergency anchorages have also been occupied.
Marine Traffic uses an automatic identification system to draw a map that shows the extent of the accumulation of container ships in San Pedro Bay, which has deteriorated in recent weeks.
According to statistics, 26 additional ships called at the Port of Los Angeles in November and 31 ships in December. A port manager said that it is expected that in January 2021, more additional ships will call.
The loading and unloading capacity of the Port of Los Angeles and Long Beach has already faced serious shortages. The Port of Los Angeles will import 116,500 TEU containers this week, and it is expected to increase significantly to 150,000 TEU per week by January 2021.
The continuous increase in freight rates and the severe congestion at the US West Port have caused shippers’ costs to hit unprecedented highs, and shippers have to reassess their transportation cost budgets for 2021.
According to the news on December 29, it is reported that due to bad weather, coupled with the epidemic and holiday packages, there has been a surge in packages. According to statistics, about 6 million packages are piled up in warehouses in the United States every day . Data in the third week of December showed that UPS's on-time delivery rate has dropped from 93% to around 86% .
Pei Jiahua, president of FedEx Asia Pacific, Middle East and Africa, said in a statement that the epidemic has disrupted the supply chain and production lines, and has had an impact on reliability delivery, but this peak freight season will be one of the busiest seasons in history.
It is reported that recently, many express companies such as Amazon and UPS in the United States have announced the suspension of aging guarantees and price increases.
Foreign media reported that retailers said that due to the squeeze of demand, FedEx FedEx is restricting the number of retailers' delivery, and retailers are now restricted from sending 75 packages a day .
According to the CEP-Research website, FedEx will increase most of the U.S. express and ground freight charges by 4.9% from January 4, 2021 ; in addition, from December 27 this year, United Parcel will charge for the use of its ground in the United States. Non-contractual customers for aviation and international services charge an average of 4.9% more.
It is understood that the U.S. Postal Service is also considering increasing the price of transportation services after obtaining approval from relevant price management agencies. According to the plan, the U.S. Postal Service will increase the prices of various transportation services by 1.2%-20% from January 24, 2021 . Among them, priority mail will increase prices by 3.5%, and priority mail express will increase prices by 1.2%.
The shipping industry in 2020 can be said to be half winter and half summer.
Affected by the epidemic, China's exports declined in the first half of the year, and the shipping industry was cold and "overwintering" ahead of schedule. In the second half of the year, the neglected shipping industry directly entered the "midsummer." As the epidemic situation in China stabilizes and the economy recovers steadily, goods from all countries are transferred from Chinese ports. For a time, China's shipping industry is showing a busy scene.
“It’s too difficult to order containers now!” A reporter from the Securities Daily could see vehicles transporting containers coming and going at the Shanghai port. A foreign trade official who did not want to be named told the reporter: “At present, I want to order a container. The price can be said to be one price per day. Not only that, even if the container is booked, I still have to worry about the availability of the cabin."
"Shanghai SIPG, Ningbo, and Shenzhen are all major ports in the world. In 2018 and 2019, the container throughput of Shanghai Port was ranked first. Recently, the container shipping market is very hot, and many boxes cannot be returned after they go out." People from listed companies commented on the reporter of "Securities Daily".
In this regard, Liu Wang, chairman of Shanghai Tianhui International Logistics Co., Ltd., told reporters: “The price of container transportation has been rising. Because shipping companies have fewer ships, they often suspend voyages, and the lack of boxes is common, even if the price increases. It cannot fundamentally solve the problem of missing boxes."
• One price a day, "boxes" are crazy
"The most exaggerated time in the past 10 years." Speaking of the current shipping industry, Ms. Xie, who is engaged in the foreign trade industry, told a reporter from the Securities Daily. Ms. Xie is mainly responsible for the freight of Guangzhou Nansha Port and Shenzhen Port. She told reporters that taking a 40-foot container as an example, the highest sea freight to the Middle East at this time last year was about US$3,000. It costs almost US$5,000 now. Last year, it was US$2,800 to US$3,200 to Europe, and now it is US$6,000 to US$7,000. This year, the freight is almost twice the same period last year.
By the end of the year, the lack of positions became a true portrayal of the operation industry.
“Nowadays, there is a shortage of containers and high freight rates. The supply exceeds demand. During the epidemic, there was a large backlog of foreign containers that could not be arranged for delivery, and no one carried the goods. Almost all customers were looting containers. Under current market conditions, there are few freight forwarders. When looking for new customers, they are basically priority old customers.” Ms. Xie told reporters that the new year is approaching, and major suppliers are fully shipping. It is expected that the shortage of containers will continue.
"First of all you have to have a position, then you have to line up the truck to get the container, and finally you have to wait for the port to open before you can enter the port. Every day, you have to go through five hurdles, and you have to face customer soul torture. It's late, can't you figure it out?" A shipping forwarder complained about the tightness of the current export containers.
Liu Wang revealed to the "Securities Daily" reporter: "Many forwarders who have no boxes sometimes look for scalpers. Now forwarders are looting positions. The positions have to be booked in advance. Many people robbed and reselled them. In the past, they did not lose their shipping fees. Now that the shipping companies are recovering their losses, the shipping companies are about to usher in a wave of market conditions this year. After the merger and reorganization last year, it is estimated that all the money lost in the past will be made back this year."
Liu Wang said: “In the past Christmas and the Spring Festival, there will be a wave of liquidation market, this year is particularly fierce because of the epidemic. South American container boxes were the lowest in history at 50 US dollars a small container, and now basically it costs more than 5,000 US dollars, and a large box 10,000. U.S. dollars, if $5,000 this week is too expensive for you, you may not be able to order $6,000 next week, basically one price a week."
In fact, the current container price has been upgraded to a daily basis. A person in charge of an international logistics company said: “In Qingdao Port, the price of a second-hand 40-foot container in previous years was about US$2,000. On November 27 this year, the price rose to US$2,850; by November 30, the price of a second-hand container rose to US$3,200. ; On December 3, it rose to 3,400 US dollars again, almost one day."
According to data from the freight benchmark company Xeneta, the current average price of short-term market contracts in Asia and Europe for three months or less is 200% higher than a year ago, at $4,831 per 40 feet. But from the same period last year, freight rates across Southeast Asia have increased by an astonishing 390.5%.
The relevant person in charge of COSCO SHIPPING Holdings told reporters: “As the volume of goods continues to rise, the demand for export containers has greatly increased, and the domestic guarantee for container use has become tighter. However, the turnover of overseas empty containers has generally slowed due to the continuous impact of the epidemic situation in various places. Transfer back to China to meet demand."
"The whole industry is looking for boxes everywhere, and some merchants are beginning to hoard boxes to speculate on prices." In the eyes of industry insiders, the current situation of foreign trade companies being difficult to find a box is not only because of the slow operation of containers, but also because of the reduction of some routes. .
"There are few ship lines, and most of the cabinets shipped abroad can't return. This is the root cause of the skyrocketing price of the domestic container transportation market." Liu Wang explained to the reporter: "It's not that foreign cabinets are not coming back. It is the epidemic situation abroad. The impact is that the workers do not go to work and the speed of transportation is relatively slow. Now everyone is sharing the warehouse."
According to Liu Wang, the container ships now and the alliance has been formed since last year. Originally, it used its own ships to transport the goods. Now four or five shipowners or five or six companies form an alliance, and use the same ship. warehouse. "It turns out that there may be several shipping companies arranging several shifts to go to sea in a week. Once we formed an alliance, the shifts decreased in a week. This started last year. Now shipping companies often stop once a week, which objectively leads to a shortage of ships. ."
A person in charge of the Shanghai Maritime Logistics Company introduced to a reporter from the Securities Daily: "At present, the proportion of import and export trade by sea is imbalanced. There are few boxes coming in and many boxes going out . In addition, China has quickly prevented and controlled the epidemic, and overseas orders have continued to surge. , Increasing the pressure on shipping. Overseas, affected by the epidemic, the operation cycle of containers shipped out due to business environment problems has been lengthened, the arrival process has increased, and the operation efficiency has slowed and lengthened the circulation cycle. Due to the early outbreak of the epidemic, major shipping The company has reduced many routes, resulting in uneven distribution of global container volumes."
The industry believes that with the increase in market demand, the current effective capacity is obviously insufficient.
The relevant person in charge of COSCO Shipping Holdings revealed to the reporter: "As the global epidemic prevention and control has become normalized, global trade has been rapidly repaired since the third quarter of this year, and the demand in the container shipping market has recovered beyond expectations. In order to meet the growth of transportation demand, market capacity has gradually returned to normal. , The idle capacity has dropped rapidly from the record high of more than 2.7 million TEU (international standard unit units) in May this year. At present , there is no airworthy effective capacity to rent in the market. "
In the context of uneven global container deployment, container prices on different routes have also risen at different rates.
"Since November, the price of the U.S. line has increased by about four times compared with the beginning of the year, and the European line has risen to the highest price last year. From the perspective of the distribution of China’s export routes, the U.S. container accounts for 25%, Europe accounts for 25%, and Southeast Asia , Northeast Asia adds up to 50%, the US route is now hard to find a box is the norm, followed by the European route, freight is also very tight. The price of Malaysia route in Southeast Asia has also doubled recently." The person in charge of the aforementioned logistics company added.
Facing the increase in demand for containers, the above-mentioned relevant person in charge of COSCO SHIPPING Holdings stated: “The company will strengthen scientific forecasts for container use, actively coordinate dual-brand superior resources, and make every effort to guarantee the use of containers during peak seasons. On the one hand, internally tap the potential and accelerate overseas heavy container Demolition speed, increase empty container callback domestic and Far East efforts to promote container turnover; on the other hand, close communication with container manufacturers and container leasing companies to seek more container sources. Through two-pronged and multiple measures, to guarantee domestic container use Provide effective assistance and try our best to meet the shipping needs of customers."
In order to meet the development needs of the container market, SIPG has launched a number of effective measures to promote container volume growth in response to the market. At the beginning of this year, the Group launched seven special measures for container growth, through the implementation of preferential international transit loading and unloading fees, extension of the international transit container storage exemption period, and sea-rail intermodal customs clearance container preferential projects. In the first half of the year, the Group established three major container areas: Yangshan, Outer Harbor, and Domestic Trade, striving to achieve overall planning and agglomeration effects.
According to SIPG’s official announcement, in October, each terminal of Shanghai Port set a new record. The monthly throughput of Shengdong Company exceeded 820,000 TEUs for the first time. Among them, 33068 TEUs and 12899.75 TEUs were updated on October 25. Class record; Guandong Company broke through 720,000 TEU, setting a new record again.
• How long can the "shortage of containers" last? What is the future prospect of the shipping industry?
"The first half of the year was affected by the new crown epidemic. Ports and shipping fields did suffer a relatively large negative impact, so the first half of the year was basically a negative growth state. In the second half of the year, especially after the third quarter, normal operations resumed to a certain extent, plus China The epidemic has been controlled to a certain extent, and most of the economic activities have been resumed first. Therefore, compared with the first half of the year, there is indeed a big sign of a bottoming out." said Liu Dian, a research assistant at the Chongyang Institute of Finance of Renmin University of China.
In the first two months of this year, my country's foreign trade imports and exports dropped significantly. According to China Customs data, from January to February 2020, my country's total import and export value of goods trade was 4.12 trillion yuan, a year-on-year decrease of 9.6%. Among them, exports were 2.04 trillion yuan, down 15.9%; imports were 2.08 trillion yuan, down 2.4%.
Although the current domestic epidemic situation is under control, the global epidemic is breaking out, and exports are still under certain impact.
It can be said that in the first half of this year, people in the shipping industry were mainly pessimistic about my country's export prospects. In the second half of the year, the industry was generally optimistic about the future development of the shipping industry.
Insiders analyzed to the "Securities Daily" reporter that this round of container freight price increases began in the middle of this year. At that time, after the domestic epidemic was brought under control, foreign countries were greatly affected by the epidemic, and many overseas orders were transferred to the domestic market. When shipping from China, the shipping price began to rise. According to Liu Wang's prediction, this round of price increases will continue until the first quarter of next year.
An unnamed person in charge of maritime logistics said: "As the epidemic stabilizes, this hot market will continue into the first half of next year, or even longer."
"This wave of increase in container shipping prices has driven the adjustment of the entire foreign trade sector, breaking the laws of the past decades in the industry. Not only ocean freight, air freight and land transportation have different levels of influence and changes. The epidemic has accelerated the entire large trade sector. The consolidation and adjustment of the shipping sector will gradually move towards intensive development. Shipping companies have become monopolistic after years of integration and mergers. The aviation sector and the land transport sector are also rapidly integrated, and a new chapter will emerge in the future foreign trade field." People say so.
According to Huang Tianhua, chairman of the China Container Industry Association and vice president of CIMC, predicted that the shortage of containers may continue for about six months . He said: "We have monitored that if there are 500,000 new containers in China normally, they are in a completely healthy state if they are ready for use in the docks or ports, but the current tighter inventory is about 300,000 new containers. I expect it to be possible. In the next three months to six months, this slightly tense balance will continue. This is probably a trend in the current industry."
Although the industry is generally optimistic about the shipping industry, Liu Dian believes that the total global trade volume in 2020 will still drop a certain percentage from the previous year, but from the perspective of the shipping industry, it will definitely be from the third quarter to the fourth quarter. There will be a better market.
Liu Dian said: “Affected by the epidemic in the first half of the year, the uncertainties slowed down in the second half of the year, and the overall trend showed a relatively large rebound. Therefore, from a macro perspective, global international trade has rebounded to a certain extent. China is the first to resume the rebound led by the next."
" At present, the shipping industry is mainly affected by three factors :
Di Yi factor is that the global economy is expected to have a recovery, so after the third quarter, international trade has been warmer, led the field of shipping industry as a whole for the better, whether it is from container or just have some trade from the sea to pick up case .
The second factor is that with the signing of the RCEP agreement, a series of regional economic integration cooperation relations in East Asia and Southeast Asia will improve, which will benefit the import and export trade of China and related countries.
The third factor is that although the epidemic has not been eliminated on a global scale, all countries are in short supply, such as medical supplies, production supplies, and living supplies. China is now the world's largest trade surplus country. Under such circumstances, China's export trade, including part of its import trade, will also get a relatively large rebound in demand, and at the same time promote the rise of a series of shipping-related industry indexes in related fields, including the container shipping index. "Liu Dian said.
Ocean freight has been very developed in the 21st century. How to choose the container used in freight transportation ? The following editor will analyze it.
The emergence of containers is for the safety of the container and the ship, but before packing, it is necessary to know the volume, nature, type, and shape of the goods to choose a suitable container. Of course, some goods cannot be transported, and also The cargo will be damaged due to the wrong container.
As for how to choose the right container for the goods, let's talk about them one by one below.
How to choose the container used in sea freight ?
You can choose sundries containers for valuables and cleaning items; ventilated containers for perishables and dirty goods; refrigerated containers for refrigerated and dangerous goods; livestock (animal) containers for animals and plants; platform containers for bulky items, and bulk The cargo can choose bulk containers.
When we are shipping, it is very important to know how to choose the shipping container, and it is also to ensure the safe arrival of the goods to the destination.
When the overseas epidemic has not been effectively controlled, telecommuting and home isolation have become the norm. The suspension of offline transactions in the past has accelerated the shift of international trade to online. In this context, China's foreign trade exports have accelerated recovery, especially the rapid increase in cross-border e-commerce orders.
Recently, the "home economy" related products represented by furniture, home appliances, toys, and daily necessities have continued to explode. China’s small commodity export orders have surged, and many manufacturers’ orders have already been scheduled to 2021.
Correspondingly, due to the imbalance of China's import and export trade, container shipping export freight rates remain high, and containers are "difficult to find". These problems have become more prominent under the stimulation of huge transportation demand.
The explosive growth of export orders and thorny transportation problems have put Chinese exporters facing tremendous pressure and challenges.
Export orders soared, shipping costs soared
"This time of the year is the peak season. In previous years, the factory was very busy and the number of offline purchases was countless. This year, affected by the epidemic, almost all of them have adopted online ordering." Wan Rufang, general manager of Zhejiang Fengfan Stainless Steel Products Co., Ltd., told China A reporter from Aviation Weekly said.
Ju Jianshuang, general manager of Shanghai Jiesheng Furniture Co., Ltd. also introduced: "Compared with last year, this year our company's export orders have increased by about 10%."
But the headache for these exporters is that although the volume of export orders has exploded, their profits have not risen but fallen. The main reason is that the increase in shipping costs is even more alarming.
At the beginning of this year, the outbreak of the new crown pneumonia epidemic caused most Chinese companies to stop work and production, leading to the cancellation of many orders and a decline in freight volume. Shipping companies have also adopted measures such as reducing capacity and reducing voyage density in response to market changes. However, shortly afterwards, the epidemic in China was effectively controlled, and companies gradually resumed work and production, exports basically recovered, and freight volumes rebounded rapidly.
However, judging from the market reaction, the shipping company's capacity increase did not match the cargo volume, which caused the freight rate to rise all the way. The direct reason for the recent sharp increase in freight rates is that the overseas epidemic has affected the efficiency of port loading and unloading. At the same time, the logistics turnover is not smooth, the shortage of containers is very prominent, and the supply and demand are seriously mismatched. For this reason, shipping companies have begun to levy congestion surcharges, peak season surcharges, and lack of containers surcharges.
Latest SCFI data
According to the Shanghai Export Container Freight Index (SCFI) released by the Shanghai Shipping Exchange, on December 18, the market price of Shanghai’s exports to European basic ports (including maritime surcharges) was US$3,124/TEU, an increase of 6.0% from a week ago. Compared with the US$1,508/TEU a month ago, it has doubled.
The price of US$3,124/TEU on the Asia-Europe route is the highest ever since SCFI was released in 2009.
During the same period, the market prices (including shipping surcharges) for exports from Shanghai to basic ports in the West and East of the United States were 3,900 US dollars/FEU and 4874 US dollars/FEU, which were also at historical highs.
Cai Jiaxiang, vice chairman of the China Association of Foreign Trade and Economic Cooperation Enterprises, said bluntly: "Sometimes, the sum of various surcharges even exceeds the freight."
Exporters' profit shrinking affects foreign trade stability in the long term
It is understood that about 80% to 90% of foreign trade export enterprises in China sign the FOB clause in the export contract, that is, the buyer pays for the freight.
Cai Jiaxiang analyzed: "In a short period of time, because Chinese exporters who sign FOB clauses will pay the freight by the buyer, it will not be greatly affected in the early stage of the price increase. But from a long-term perspective, if the freight continues to rise, the export The business is bound to be affected to a certain extent."
He took the US importer as an example. If the buyer needs to pay up to 5,000 US dollars in freight per box for a long time, the buyer's import cost will be greatly increased, and the Chinese exporters may be required to share the high freight.
Even if the Chinese exporters who sign the FOB clause do not need to bear the ocean freight, they still have to pay for the transportation costs of the goods from the factory to the dock. At present, affected by the lack of containers, exporters can only obtain empty containers by waiting for empty containers or raising the price. In order to ensure shipments, most exporters will choose to increase the price to pick up the box, which also increases the export cost of Chinese exporters.
More importantly, the continued high freight rates will also affect the purchasing power of overseas consumers. Due to the increase in costs and the substitutability of some commodities, importers may consider whether to use substitutes when choosing commodities.
Wan Rufang said: “Our company’s order volume from August to October was relatively large. Compared with March to June, it has doubled. But starting from November, some countries have adopted closed measures and freight Excessively high, to a large extent affect the customer's purchase volume."
On the other hand, the Chinese exporters who signed the CIF clauses, as they directly bear the export freight, have a deeper understanding of the pain points of high freight, and it has effectively affected their own profits.
Ju Jianshuang's company faced this situation. He reluctantly said: "Our company is mainly based on signing CIF contract terms. In most cases, the ocean freight of exported goods is borne by us. The recent rapid increase in freight has caused the company's costs to rise sharply, and the monthly profit is about reduced. 600,000 yuan."
Ju Jianshuang said that the high freight rates are too burdensome for companies that "small profits but quicker sales" and mainly out-of-stock volume. "We will consider negotiating with customers to postpone shipments or raise prices appropriately. But the main solution is to give up some profits by the company itself to maintain normal operations."
He believes that a balance should be maintained between production companies and transportation companies to ensure the living space of both parties.
However, even in the current era of "hard to find a box" and frequent freight charges, seaborne export is still the first choice for Chinese exporters.
There are two main reasons for this. One is the export destinations of some exporters, such as the United States, Canada, Malaysia, Singapore and other countries. These destinations cannot deliver goods by means of transportation other than sea or air, and air transportation has certain transportation restrictions and the freight rate is too high. , Most exporters will not consider; second, although shipping costs have risen sharply, they are still lower than road, rail, air and other transportation methods. At the same time, shipping has greater advantages in capacity and can better meet the needs of Chinese exporters.
Cai Jiaxiang further explained: "In the early days, shipping goods to Europe via the China-Europe Express train cost about US$10,000 per TEU. At present, although the freight rate of the China-Europe Express train has been lowered to US$7,000-8,000 per TEU, the price is still higher than that of ocean freight. From the perspective of many Chinese exporters, price is more important than speed."
Chinese and U.S. regulators frequently call for exporters to restore capacity
In response to the current difficulties faced by Chinese exporters, the Ministry of Commerce of China has paid close attention and responded publicly.
Gao Feng, spokesperson of the Ministry of Commerce, said at a recent press conference that many countries around the world are facing similar problems in foreign trade logistics due to the impact of the new crown pneumonia epidemic. The mismatch between supply and demand of capacity is the direct cause of the increase in freight rates. Factors such as poor container turnover have indirectly pushed up shipping costs and reduced logistics efficiency.
Gao Feng, spokesperson of the Ministry of Commerce
He further emphasized: "The Ministry of Commerce will work with relevant departments to increase capacity allocation, support accelerated container return transportation, improve operational efficiency, and support container manufacturing enterprises to expand production capacity. At the same time, it will increase market supervision and strive to stabilize market prices. Provide strong logistics support for the stable development of foreign trade."
Prior to this, the regulatory authorities of China, the United States and other countries have also stated that they will pay close attention to issues such as rising freight rates in the shipping market.
In September of this year, the Ministry of Transport of the People’s Republic of China interviewed all shipping companies operating China-US liner routes, emphasizing that it will strengthen the supervision of China-US routes, requiring that the capacity, routes and schedules must be filed, and freight and all surcharges must be regulated. reasonable.
Also in September, the US Federal Maritime Commission (FMC) also issued a warning to shipping companies that it would crack down on potential violations of competition laws. Soon after, FMC also announced the toughest measures to increase the supervision of the three major shipping alliances in response to issues such as freight and demurrage. It is required that shipping alliances must submit specific trade data to FMC every month, whereas previously it was only required to submit every quarter.
In this regard, Cai Jiaxiang said that the European and American regulatory policies are relatively timely. The EU has the most stringent anti-monopoly issues, and the United States is not inferior. These areas have achieved certain results in freight control, and prices are relatively stable.
Regarding the domestic export trade market, Cai Jiaxiang believes that “restoring the original normal capacity and flight density is the top priority to solve the problem.”
He further stated that the voice of the Ministry of Commerce can improve the current market conditions to a certain extent, but it still needs to increase efforts. "Call on the Ministry of Transport to interview shipping companies to restore normal capacity and flight density, and the State Administration for Market Supervision and Administration will use anti-monopoly laws reasonably and adopt legal weapons to cut the root cause of shipping problems." Cai Jiaxiang said.
It is reported that the Port of Los Angeles, the largest port in the United States, is currently under continuous pressure from a large number of containers entering the port.
Workers are picking out Christmas presents from piles of containers to ensure that these goods can appear under the Christmas tree of American families in time.
According to data released by the Port of Los Angeles on Tuesday, the port handled a total of 889,746 20-foot standard containers in November this year, a 22% increase year-on-year.
Factors such as rising consumer spending, holiday gifts and restocking have contributed to an unprecedented surge in freight volumes in recent months.
Gene Seroka, executive director of the Port of Los Angeles, said that the average monthly container throughput since August has been close to 930,000.
It is rare to be so busy at this late in the year, but 2020 itself is not a normal year.
Seroka further stated that as consumers continue to stay at home and shop online instead of going out to consume services, it is expected that the busy port will continue for at least a few months.
To help shippers manage the influx of goods, the port has introduced new data tools and provided more places to stack containers.
The logistics pressure at the end of the year was mainly due to the impact of the epidemic in the first half of this year. As of mid-December, the annual freight volume of the Port of Los Angeles was still 3% lower than the same period in 2019. The main reason was the 19% drop in freight volume in the first five months.
Since the second half of the year, containers from Asia have poured in at a record rate.
The Port of Los Angeles stated that the imported 20-foot standard containers reached 464,000 in November, an increase of 25% year-on-year; the export standard containers fell 5% to 130,000;
At the same time, empty container transportation with strong demand in Asia increased by 34.2% year-on-year to 294,000.
According to media reports, the surge in container imports has also caused traffic congestion in the port, making it more difficult for trucks and trucks to transport goods from the port quickly, which has also caused a slowdown in the speed of cargo ships entering the port.
According to Seroka, 50 of the 88 ships that arrived at the Port of Los Angeles in November waited 2.5 days at anchor before unloading.
By December, 80% of arriving ships had to wait an average of four days.
The congestion of port transportation has also made the US toy industry worried. There is currently less than two weeks before the industry's most important Christmas.
Isaac Larian, CEO of MGA Entertainment, said that as of Tuesday, the company had a backlog of 250 containers at the port, which had been delayed by three to four weeks before the scheduled delivery date. Currently, it can only get some of them every day with the help of the port.
