As of August 27, the latest data of the Freightos Baltic Index launched by the Baltic Shipping Exchange and Freightos showed that the US China shipping price once again broke the US $20000 mark after a short-term decline of one week. In addition to the routes between China and the United States, the global container shipping prices have risen gradually since December last year, and accelerated in April this year.
The shipping price is hard to find compared with the value of goods and one warehouse of containers. These pain points have become a commonplace topic in the international shipping market this year. However, in the nearly out of control competition in the shipping market, there is also a different situation of several happy and several sad.
The freight rate of popular routes rose nearly six times year on year
"Now I dare not guess whether the shipping price will fall or not, and I don't want to face whether it will rise tomorrow. It is already numb." Yang Zhonghua, a freight forwarder in Guangxi who has worked for more than ten years, said in an interview with the surging journalists.
Among the world's popular routes, the surging news reporter inquired Freightos Baltic Index and found that, as of August 27, the latest data, the previously high sea freight price from China/Southeast Asia to the east coast of North America fell back a week from the high of $20636 per FEU (40 foot standard container) at the beginning of August, and returned to the $20000 mark again. At present, the price is $20057 per FEU, an increase of 5% over last week. The freight rate of the route from China/Southeast Asia to the west coast of North America also continued to rise after the fall, with the freight rate of US $18425 per FEU, up 5% from last week.
Although the freight rate of China US routes has dropped in a short period, it has increased by about five or six times compared with the price of more than 3000 US dollars per box in August last year.
The freight rate of the routes from China to Northern Europe and the Mediterranean Sea has also risen since December last year, and rose again after a slight drop in early April this year. As of August 27, the freight rate of the route from China to Northern Europe was US $13889 per FEU, and that from China to the Mediterranean was US $12902 per FEU.
In addition, when the surging journalists inquired about the data on the official website of the Shanghai Shipping Exchange, they found that the comprehensive standard rate index of global trunk routes in July was 18.90%, down 4.44% year on year, which means that the capacity of international routes continues to be insufficient.
At present, Vietnam, Malaysia and other Southeast Asian countries have closed their cities due to the epidemic situation, and some ports are prohibited from operation. Among the world's popular ports, the ports of Houston, Miami, Los Angeles and Baltimore in the United States, Hamburg and Rotterdam in Europe are particularly congested, resulting in a significant reduction in the number of container ships that the global shipping companies can turn over normally compared with those before the epidemic.
As for the upsurge of the international shipping market, Yin Jingbo, an associate professor of the Department of Transportation Engineering of Shanghai Jiaotong University, said to the surging journalists, "The shipping market freight rate has a great relationship with the market supply and demand and the transport market structure."
On the supply and demand side, Yin Jingbo analyzed that under the unstable global epidemic situation, international retail enterprises in Europe and the United States often place orders in advance to store large quantities of goods in order to ensure that they can successfully catch up with the peak consumption season. In addition, with the significant growth of personal consumption expenditure in the United States this year, the rise in demand has also brought about a substantial increase in container transport demand. However, the route, schedule and capacity structure of container ships are relatively fixed, and it is difficult to increase short-term capacity, which leads to a decrease in the actual supply of container capacity at the original fleet scale level, and a large increase in freight rates on individual routes.
In terms of the container transport market structure, Yin Jingbo analyzed that, at present, the transport capacity of the global liner company CR8 (the eight largest enterprises occupy the relevant market share) reached 79.82% in August this year. Under this market structure, the transport price is not completely determined by market supply and demand, and the shipping companies have the ability to regulate the transport price. When the shipping capacity is insufficient, some shipping companies will increase the freight rate.
The scalper's "frying box dumping" has intensified
"Now the market price of international shipping is soaring, partly because scalpers continue to 'fry boxes', and the price of container ships released by shipping companies is not exorbitant, which has seriously affected livelihoods." Xie Ning, a Shanghai shipping agent, said to the surging journalists.
Xie Ning expressed that, "Some of the first generation scalpers who have a good relationship with the ship owner get a lot of boxes and resell them to the second generation scalpers. After several turnover, the price of the same industry keeps rising. Now the business of reselling boxes is much better than that of directly acting as freight forwarders. Now, freight forwarders like us can not get boxes at normal prices, and they are willing to pay for them, but they are not necessarily able to seize positions. Moreover, they have no chance to see the real face of the ship owner. They can only be on the ship East agents or peers in the resource circle look for luck to wash boxes. "
Xie Ning also said that, "At present, there is a shortage of warehouses. Originally, a ship could put 3000 boxes, but it claims to put 6000 boxes, so as to attract more people to raise the price of the warehouse. It has become the norm in the circle that the goods can not match the warehouse. Now, no matter how high the price of the containers is, as long as there are 'boxes', it is the most popular. Freight forwarders used to be direct passenger companies (that is, without middlemen, they directly connect with ship owners' agents, domestic manufacturers or foreign customers) Now, some of them have turned to scalpers for scalping. "
Some are happy and others are sad in the shipping market
The continuous high floating of shipping prices is an opportunity for leading shipping enterprises to turn their net profits from losses to profits.
According to the semi annual report released by China International Shipping Container (Group) Co., Ltd. on the evening of August 27, the net profit attributable to shareholders of listed companies in the first half of the year was 4.297 billion yuan, and the net loss in the same period last year was 236 million yuan, turning losses into profits. In addition to the rapid growth of container business, affected by the imbalance between shipping supply and demand, the price of new containers of CIMC increased significantly in the first half of the year. During the reporting period, the container manufacturing business of CIMC achieved an operating income of 27.451 billion yuan, up 224.91% year on year, accounting for the highest proportion of the overall operating income, 37.51%. The net profit was 4.394 billion yuan, up 1739% year on year. The gross profit margin was 24.19%, up 13.97% year on year.
Compared with foreign trade manufacturers, export orders that can capture containers at high prices are often characterized by high value and large demand. However, those traditional factories that produce low value goods have to struggle to death or even withdraw from the market in the face of shipping charges of comparable value.
"Our freight forwarders are really worried about the long-term card list, but we can't afford to wait for what kind of prices will be accepted." Xie Ning said that many foreign trade companies he worked with had to accept high freight shipments to sea in order to support workers and maintain factory operations. For some orders whose freight rate is equal to the value of goods, the factory chooses to resell them to the mainland market.
Yang Zhonghua said that the total number of export orders received by the current cooperative factories is increasing, but the data of manufacturers' successful export is not ideal. For factories that can't get boxes and orders can't go to sea in time, we need to talk with foreign customers about liquidated damages. However, some manufacturers that do not need to bear the freight according to the FOB terms will face the continuous cutting of orders from foreign customers, and the manufacturers will still be affected by the backlog of goods and the inability to ship in time, resulting in the rise of warehousing fees and labor costs.
The person in charge of a company with export business of outer packaging in Shanghai told the surging journalists that the unloading price had risen seriously due to the reduction of foreign port staff during the epidemic. Some foreign customers have appointed freight forwarders or internal channels, so although the delay of delivery time has little impact on export orders, it requires the purchase and sales partners to spend more time on multiple negotiations.
Xie Ning said that e-commerce and WeChat businesses that use Amazon and other platforms to deliver goods may be due to the large number of shipping orders, convenient docking forms and other reasons, and the shipowner's agents have more cooperation with them, thus squeezing out the number of containers required by many traditional foreign trade factories. "As far as the traditional foreign trade manufacturers that I cooperate with are concerned, many of them have been shut down this year."
Yang Zhonghua also said, "At present, some foreign trade enterprises will consider taking some bulk carriers for some orders when they can't get the boxes. This has also led to the growing demand for bulk carriers. Among them, the difference between the freight rates of bulk carriers and containers on the China US route is about $2000 to $3000 from the past, but now the difference is only $500 to $700."
As for whether other transportation routes can be used, Yang Zhonghua said that the freight volume of sea transportation is much higher than that of air transportation, and sea transportation is used to transport large and heavy goods, while air transportation is more suitable for small goods such as spare parts or valuable goods. Therefore, changing from sea transportation to air transportation has high requirements on the goods ordered by the manufacturer.
International freight forwarders are under constant pressure
International freight forwarding has almost become a job that can only be "played" with abundant funds. In order to continue to maintain the normal operation of the work, freight forwarding agents have to face the pressure of huge advances.
A number of freight forwarders told reporters that the terminal often informs the freight forwarder that the ship is late, but in fact, this is because the port is congested or the route is delayed, and the ship has not come in yet. However, freight forwarders usually have to transport goods to the port early, resulting in various additional costs during the period when the goods are detained at the terminal, such as budget overrun costs, overdue container charges, container drop fees, accrued fees and other complex costs, ranging from 1000 yuan to more than 100000 yuan. Small surcharges shall be borne by the freight forwarder, while large surcharges shall be shared by foreign trade manufacturers, freight forwarders and foreign customers through negotiation.
Yang Zhonghua also said with emotion, "The order goods from the factory to the foreign customers successfully received the goods. Some routes used to take only about 20 days, but now due to various reasons such as port congestion, it may take at least two months to arrive at the port. Then the pressure on us to advance the funds has changed from 20 days to several months, and the funds are withdrawn very slowly. And because of the hot box frying, we usually go 200 containers a month before the epidemic, only need to advance about 300000 yuan, now we need to advance about 5 million yuan at a time."
Yang Zhonghua said, "The seized boxes themselves are no longer cheap. In order to maintain long-term cooperation with foreign trade manufacturers, we dare not raise prices too much for old customers, and the profit margin of freight forwarding is lower than before. Now the volume of containers can only give priority to ensuring the shipping demand of high-quality customers and long-term cooperative customers, and those customers with small orders or slow payment collection will be gradually eliminated."
Under the downturn of shipping agency business, it is normal for small international logistics companies to basically maintain their livelihood. Yang Zhonghua revealed that in order to maintain the enterprise's operation, the company has now adjusted its business structure, re established the network freight enterprise, and focused on the domestic trunk line transportation business.
How to alleviate the "high price box worry"?
Recently, Maersk released the latest market information on the supply chain in the Asia Pacific region in August. The report predicts that the container demand in the second half of 2021 will increase by about 2% - 4% year on year.
In terms of the industry development trend and market outlook, CIMC Central News pointed out that the container transport market is expected to enter the seasonal peak season in the second half of the year, and the demand for container transport will remain strong. Under the epidemic situation, the global port congestion and supply chain imbalance will be difficult to fundamentally solve in the short term, and the continuous high landscape of the container transport industry will make customers willing to buy containers. It is expected that the container demand will remain high in the second half of this year.
When will shipping prices peak in the future when container demand continues to grow? Yin Jingbo said to the reporter, "At present, it is difficult to predict the changes in international shipping market demand and the occurrence of uncertain events, so it is difficult to determine when the freight rate will peak. Although the profits of container transport companies and shipping companies will increase in the short term, in the long run, the surge in freight rates is no different from fishing without water, which is not conducive to the stable development of shipping companies in the future."
On July 22, the relevant person in charge of the Ministry of Commerce, in view of the pain points of the shortage of containers and high freight rates in the current marine logistics market, prompted the business associations in the fields of shipping and freight forwarding to further strengthen industry self-discipline and urge enterprises in the industry to operate legally and in compliance.
Yin Jingbo said that container transport is an international transport mode, and the role of a government in the whole system is relatively limited. The stability of the market mainly depends on the market rules, self-discipline of the industry and associations. The uncontrollable factors such as port congestion and reduced efficiency caused by the epidemic in some foreign countries need to be adjusted more by the market.
"Increasing the supply of containers and improving the efficiency of container turnover can further alleviate the challenges of the shortage of empty containers and the hot speculation." Yin Jingbo said that domestic container manufacturers have increased their production capacity, which will gradually increase container supply. In addition, the government can further improve the turnover efficiency of containers through the improvement of the port collection and distribution system, thus alleviating the problem of empty containers.
Since this year, the global orders for new container ship construction have exploded. Up to now, Jiangnan Shipbuilding, Hudong Zhonghua Shipbuilding and Waigaoqiao Shipbuilding, the three largest shipping companies in Shanghai under China Shipbuilding Group, hold nearly 60 container ship orders including the world's largest 24000TEU, dual fuel power 15000TEU and 13000TEU, as well as 7000TEU. Shanghai has become a global container ship research and development center.
According to the latest report released by Maersk in August, the overall supply of 20 foot dryers and 40 foot dryers in China, Vietnam, Cambodia and Indonesia is in shortage. Maersk has invested in the construction of more 40 foot container containers this summer, and has made every effort to transport empty containers back to Asia. In addition, in order to improve the ship's scheduled rate, Maersk will successively cancel some port affiliations on specific routes, and launch SOC (Shipper's Own Container) and NOR (Cold Dry Container) services to mitigate the impact of container shortage.
On August 4 last year, the National Development and Reform Commission issued the Notice on the Action Plan for Clearing up and Standardizing Sea Port Charges (FGJG [2020] No. 1235). The notice pointed out that by the end of 2021, it will standardize and guide the charging behavior of shipping companies, give play to the leading role of large state-owned shipping enterprises and the self-discipline role of industry organizations, promote shipping companies to reasonably adjust the structure of shipping charges, standardize and simplify charging items, eliminate unreasonable surcharges, and strictly implement the freight rate filing system.
In terms of agency business and customs business, the notice pointed out that it would continue to strengthen the supervision of shipping agents and freight forwarders' charges, promote the standardization of the name and service content of shipping agents and freight forwarders' charges, promote the simplification of charging items, and further standardize the pricing behavior of shipping agents and freight forwarders. We will continue to reduce the compliance time of import, export border and documents at maritime ports, improve customs clearance efficiency, and improve the digital level and intelligent management capability of import and export trade.