Affected by multiple effects such as the epidemic, the continuously rising ocean freight rates have recently regained a frenzied upward trend. Among them, the spot price of 40-foot standard containers from China to the United States hit a record high of more than US$20,000.
On August 11, a positive case of COVID-19 was found at the terminal of Ningbo Port (601018), the world's largest port, which triggered the emergency closure and suspension of operations in the Meishan Port area that day, which made the already tight international capacity worse. Affected by multiple effects such as the epidemic, the continuously rising ocean freight rates have recently regained a frenzied upward trend. Among them, the spot price of 40-foot standard containers from China to the United States hit a record high of more than US$20,000. In addition to high prices, "a box is hard to find" has forced a large number of foreign trade products to be backlogged in warehouses and cannot be shipped out in time. Products piled up in the corners of warehouses and factories
Referring to the recent frenzied increase in ocean freight, Zhu Xinchun, general manager of Yiwu Hanlin Electronics Co., Ltd., which sells more than 10 million clock products to the world every year, said frankly that "the impact is particularly great." He told CBN reporters that the sea freight from China to the Mediterranean Sea had risen to US$12,400 in July and exceeded US$13,000 in August. Before the epidemic, the price was only around US$2,000, which is equivalent to a six-fold increase. In addition to the substantial increase in costs, what’s even more difficult is that not only are the prices expensive, but it’s also difficult to reserve space and containers. Imaginative". “Generally speaking, we need 100 cabinets (containers), and we can only get 10-20 cabinets." Zhu Xinchun estimates that at least 30% of the products are forced to be stacked in the warehouse and cannot be shipped out because they cannot be ordered. Li Yanting, deputy general manager of Xuzhou Highland Sauna Equipment Co., Ltd., told China Business News that the craziness of shipping fees and the “hard to find a box” caused their export products to “not only the warehouse, but also all the places in the factory. full". For clothing products with seasonal characteristics, the impact of not being shipped out is even more serious. Meng Zhuo, manager of Anhui Garment Import and Export Co., Ltd., told China Business News that recently it is the last stage of peak shipments, and bulk orders for autumn and winter clothing will be shipped out before the end of August as much as possible to catch up with those in North America in early October. Listed. However, it was difficult to overcome the challenges of high cost and epidemic situation and completed the order in time. If it can't be shipped out, "Once the season is over, no matter how good customers are, they won't ask for these goods." Raw material price increases and out-of-stock risks are still in addition to soaring ocean freight, high raw material prices and out-of-stock risks are also affecting the profits and subsequent orders of foreign trade companies. Zhu Xinchun said that the current electronic components industry is in short supply of materials, often unable to get the goods in time when ordering, and "can only be given to you at the price of the delivery date, and some have increased by two or three times compared with the price of the order." As a result, it is difficult for them to estimate production costs, and it also affects their profits. Although the ocean freight is borne by the customer, Zhu Xinchun said that the uncertainty caused by multiple factors such as the epidemic, the increase in ocean freight and the shortage of raw materials has affected at least 30% of orders. It is expected that 40% of customers are in the wait-and-see stage. Or the order may be cancelled. For Li Yanting, the general rise in raw materials allowed them to reduce their profits by 20% to 30% when their revenue increased by 20%. Sea freight is also borne by customers, but with the loss of profits and the backlog of goods, they dare not let the factory run at full capacity and have to "selectively produce". In Meng Zhuo's view, the order quantity in the second half of the year may decrease, especially the "normal price order quantity." In the face of rising raw material and transportation costs, consumer prices in overseas markets have not risen accordingly, so orders suitable for both parties will naturally be reduced accordingly. The China Chamber of Commerce for Import and Export of Textiles pointed out that in the first half of this year, with the recovery of demand in the international market, coupled with the return of orders caused by epidemics in other supplier countries and the turmoil of the situation, my country's clothing exports have shown a good recovery trend. Looking forward to the second half of the year, as the US$2 trillion cash subsidy effect fades, the three major obstacles of the superimposed exchange rate, freight and raw material prices, there is still uncertainty about the growth of my country's clothing exports in the second half of the year. Regarding the growth rate of apparel exports in the second half of the year is expected to be significantly lower than that of the first half of the year, the China Chamber of Commerce for Import and Export of Textiles believes that there are three reasons: the export base in the second half of last year is relatively large; the US fiscal stimulus policy is gradually weakening, and the stimulus effect on consumption is limited, and the EU and Japan, etc. The market recovery is weak; the main international market procurement trend is to gradually reduce the proportion of procurement in China and increase procurement from neighboring countries.
