Sea shipping costs rising creazily, how this would influence Prepainted steel coils, Color coated aluminum coils, PPGI, PPGL internation trade?
With the recent surge in China's exports, international shipping capacity is in short supply and the problem of skyrocketing prices has become more and more serious. During the survey, foreign trade companies reported that the freight rates of some routes have increased 3 to 10 times compared with the same period last year.
The continuous increase in international freight rates has made foreign trade companies miserable. Many companies have accused international liner companies of deliberately creating a nervous atmosphere, sitting on the ground to raise prices, and deliberately "throwing cabins", putting the contradiction between foreign trade companies and liner companies in the spotlight again. The continuous increase in international freight rates is due to objective reasons such as the increase in export orders and the decline in the efficiency of overseas terminal operations. However, the behavior of international liner companies using their monopoly advantages to charge foreign trade companies in addition to the recorded freight rates has also magnified to a certain extent. Market tensions have increased transportation costs for companies. Freight rates have soared, and the international capacity is "unprecedented" Starting from November 2020, the tight capacity of routes from China to North America, the Mediterranean, Europe, South America, and Southeast Asia has been intensifying. It was difficult to book shipping space, and international freight prices have soared. Some routes have doubled in December alone. According to data from the Shanghai Shipping Exchange, as of the end of 2020, the freight rates of Shanghai's exports to the Western and Eastern U.S. basic ports have increased by 145.67% and 68.4% respectively from the beginning of 2020; the freight rates of Shanghai's exports to Europe and the basic port markets in the Mediterranean have respectively increased by 145.67% and 68.4%. Increased 264.0% and 261.7% from the beginning of the year. Among them, the increase in December was as high as 95.6% and 93.2%; the freight rate from Shanghai to South America`s basic port market increased by 274.4% from the beginning of the year. Among them, in the last three weeks of December, the market orders The freight rate has increased at a rate of USD 1,000 per container almost every week. Before September last year, international freight rates generally maintained a moderate increase. In October, although the company received the news that the international freight rate may rise sharply, the booking was still smooth, and the booking could be made a week in advance. In November, the problem of difficult bookings became prominent. The company booked the shipping space in early January this year in November, but was notified by the international liner company to cancel the shipping space a few days before the shipment. "International freight rates are now rising almost daily. Take the shipping company Maersk as an example. The price to Miami in October last year was approximately US$2,800-3,300/container, and in December it has risen to US$6,760/container." Zhang Hui said. The person in charge of a paint company in Tianjin said that in order to get the space, the company booked 3-4 space at the same time each time, which objectively increased the popularity of the market. After booking the space, it is necessary to grab the container by paying the intermediary "favorable fee", which increases the cost of the enterprise. "Our freight to the United States has tripled, and the freight to Central and South America has doubled 10 times faster." A company official said. A person in charge of an international logistics company in Ningbo told reporters that the ocean freight for exports from China has risen to a historical high, and international liner companies are so enthusiastic that they will immediately pull containers to China as soon as they become empty. "Now ships from all over the world are heading to China, even the local export goods are not pulled anymore." According to reports from foreign trade companies, after the skyrocketing shipping prices, rail transport has also seen blowouts. Due to the large increase in ocean freight rates, the prominent cost-effectiveness of railway transportation, and the significant increase in demand, warehouse explosions are extremely serious. LCL is even more difficult to find, and even "lottery" bookings are required. At present, Zhengzhou-Europe trains are 6-7 trains per week, and the warehouses are bursting seriously. The Hefei China-Europe train has only one train a week, and the Chongqing China-Europe train only has two trains a week. Both of these two trains have the phenomenon of warehouse explosion, domestic port pressure, and suspension of services. Why is it difficult to alleviate the shortage of international capacity of container? First, the epidemic has caused a decline in port operations and a large number of containers have been stranded. The global epidemic has rebounded. A large number of dockers at overseas ports have been isolated due to positive or close contact with the Covid-19 virus. The labor force in the port has been drastically reduced. After custom cleared at an overseas port, the cargo discharged to the destination, then the containers were turned back to the terminal. Now because of the decline in operating efficiency, after the container arrives at the overseas terminal, it may not be able to return for a month. For example, the international shipping company Maersk used to be able to turn around 6 or 7 times a year, but now it can only turn around 2 or 3 times. Second, the price of chartering ships and container making cost has soared, and the willingness of international shipping companies to expand capacity is insufficient. Although the hot market conditions have driven some shipping companies to increase container orders to a certain extent, due to the continuous increase in iron ore prices and rising international freight rates, the chartering prices and container construction costs have also "increased." At present, the rent of container ships has approached 40,000 US dollars per day, while the price was only 12,000 US dollars per day 6 months ago. The cost of containers has also doubled several times. The person in charge of a logistics company in Ningbo said that some of the ships of international shipping companies are owned and some are leased. In other words, if shipping companies want to expand their capacity in the short term, they can only rely on chartering ships. "Shipping companies do not have any incentive to increase chartering and container building. Shipping companies can increase prices without increasing capacity, if they increase capacity, they may lose money if they invest too much." Yang Jing, director of Tianjin Shipping Business Technology Service Center, said that the current market conditions are not normal, but a domino-like chain reaction caused by the epidemic. At present, the price of chartering vessels has doubled several times, and the charter period is more than 8 years; the price of new containers has also doubled, and the charter period is 5 years. "Now that chartering ships under the current market conditions, high rents will continue for many years, and the market conditions affected by the epidemic may not last for 5 or 8 years. In addition, due to the epidemic, crew members cannot change shifts. The captain, chief mate, and the cost of ship management for various supplies are rising." Third, the shipping industry is highly concentrated, and international liner companies have the right to negotiate prices. More and more shipping companies have formed alliances to maintain a tacit agreement on prices. With the survival of the fittest in the market, the entire market has gradually formed three alliances of 2M, THE, and OCEAN. These alliances pay close attention to and control the capacity to maintain high freight rates and seek higher returns. "There are too few players in the market, and shipowners do not need to conspire to achieve price increases. Everyone is tacitly aware." said Liu Xunliang, general manager of Tianjin Dongjiang Ship Asset Management Co., Ltd. Strengthen supervision and industry calls for strengthening the long-term construction of shipping capacity During the survey, many foreign trade companies reported being "slapped" by international liner companies. For example, a company reported that it has signed a long-term price agreement with the international liner company Maersk. The company booked the space in early January in mid-December last year, but was notified to temporarily cancel the space before shipment. Companies try to book space at the "negotiation price", but in any case they can't book the space and can only book at the "market price". Some foreign trade companies told reporters that in addition to international freight, companies often have to pay for order modification fees, booking cancellation fees, and congestion fees. In addition, a "facilitation fee" needs to be paid to the intermediary to book a space. The international liner industry is highly concentrated. In order to protect trading companies, many countries, including China, implement a freight rate filing system. Some countries require shipowners to file all charges for public notice in advance, and price discrimination cannot be carried out. Once a charge item that exceeds the contents of the record is found, a large amount of penalties will be imposed. Industry insiders pointed out that liner companies` arbitrary charges have amplified market tensions to a certain extent, and suggested that relevant Chinese authorities increase penalties. Experts also said that China should speed up the building of a maritime power. The person in charge of a shipping company in Guangdong said that China is the largest country in the trade of goods and the most important ship supplier. However, the current number of ocean freighters and the international influence of shipping companies in my country are not related to its own trade volume and status. Matching, the development of the upstream and downstream industrial chain of ships and maritime transport and the derivative service market is relatively lagging, and there is a real demand for further improvement and improvement.
Shandong Wofeng New Material Co., Ltd is manufacturer of Prepainted Steel coils, color coated aluminum coils, PVC film laminated steel sheets, Printech steel coils, Matt Ppgi Coils, matt Aluminum Roofing coils, etc.
Shandong Wofeng New Material Co., Ltd.
