Last year, affected by the overseas epidemic, Christmas orders suffered a serious impact. This year, Christmas orders for many foreign trade companies have increased significantly, but they generally face shipping difficulties.
Feng Feng, spokesperson of the Ministry of Commerce, said at a press conference on the 26th, June to August every year is the peak period for the shipment of Christmas supplies. However, this year, considering the risk of shipping delays in the port, overseas customers generally place orders in advance by viewing the goods and signing orders online. Some orders have been shipped and delivered earlier than in previous years, and some orders have been backlogged in domestic warehouses due to difficulties in booking space or high freight charges, putting pressure on business operations.
Christmas orders arrived early
Zhejiang Yiwu International Trade City is home to hundreds of Christmas supplies merchants, and two-thirds of the world’s Christmas supplies come from here.
Zhang Zexing has been in the Christmas supplies business in Yiwu International Trade City for more than ten years . This year, he originally planned to stock up at the same pace as previous years, but unexpectedly, overseas customers placed orders 2 to 3 months earlier. “This year’s Christmas orders, customers placed their orders much earlier than in previous years, and now they have entered the shipping stage.” Zhang Zexing said.
Global Christmas supplies are mainly supplied by China, and Yiwu plays an important export base in China The role of “barometer”. Statistics from the Yiwu Bureau of Commerce show that in May, there were more inquiries from foreign investors in Yiwu for various new Christmas pendants, Christmas stickers, Christmas ornaments, etc., and orders increased.
Dongguan is another important base for Christmas orders. Xu Boyang, general manager of Dongguan Fuliju Home Gifts Co., Ltd., said, “This year, customers are indeed placing orders earlier than in previous years. We mainly produce mid-to-high-end products. Affected by the epidemic, the consumption power of European and American countries has also been affected, which has a great impact on our Christmas orders have had a certain impact, and our orders this year are relatively stable.”
Orders are stuck and “shipwrecked”
For many foreign trade business owners, although Christmas orders have increased, they generally face the reality of goods being shipped to sea. trouble.
Since the second half of 2020, European and American ports have been affected by the epidemic, resulting in the return of empty containers Slow, coupled with strikes, ship delays, port congestion and other conditions in some foreign ports, the shortage of containers has become more serious. Affected by multiple factors, shipping prices have been rising.
Some foreign trade companies said that international logistics prices have skyrocketed and congestion is overwhelming, with hundreds of Tens of thousands of Christmas trees cannot be shipped overseas in time, and a company with an annual export volume of about 150 million yuan has to spend 2 million yuan to rent a 10,000-square-meter warehouse specifically for stacking Christmas trees.
The tight transportation capacity and high freight rates have attracted the attention of relevant national departments. Gao Feng said at a press conference on the 26th that the Ministry of Commerce, together with the Ministry of Transport, the Ministry of Industry and Information Technology, the State Administration for Market Regulation and other units, has actively taken measures to increase container supply, enhance shipping capacity, and strengthen international cooperation. Local governments have also increased shipping service guarantees for small and medium-sized enterprises to help them reduce costs and losses.
Profits eaten
In addition to facing the difficulties of going overseas, due to the impact of multiple factors such as the epidemic, many domestic Christmas supplies companies are facing a situation where order profits are eaten up this year.
Gao Feng said at a press conference on the 26th that rising raw material prices, global Many unfavorable factors such as rising freight costs and poor transportation have affected the Christmas product exports of Chinese foreign trade companies. Many companies reported that they faced a situation of “business but no profits” during this year’s Christmas export peak period.
Many heads of foreign trade companies introduced that the price of this year’s Christmas orders is the same as in previous years. There is not much change compared to the previous year, which means that companies have to absorb the increase in raw material costs themselves. For many export-oriented manufacturing companies, on the one hand, the prices of upstream raw materials have soared, and on the other hand, the actual prices of downstream finished products cannot be raised, which has greatly squeezed the manufacturing profits caught in the middle.
In addition, the appreciation of the RMB has also significantly eroded the profits of export companies. Xiao Wendian, the person in charge of Yinhui Toys, calculated that due to the impact of the overseas epidemic this year, overseas orders have been fluctuating, and coupled with the sharp rise in the RMB exchange rate, the company is expected to have about 8% of its profits swallowed up.
Another headache for companies is the recruitment problem. At its peak, Fuliju Company had 500 workers. Today, there are only dozens of workers. “Now the cost of recruiting workers is getting higher and higher, and young people are not willing to work in the factory.”
Under the influence of multiple factors, many foreign trade companies have placed Christmas orders. Profits were almost eaten away.
Expanding domestic sales has become a new option
For export-oriented manufacturing companies, this year, in addition to finding ways to maintain foreign trade orders, expanding the domestic demand market has become a new choice for many companies.
Experts believe that external demand may continue to be affected by trade frictions and recurring epidemics in the future. Due to periodic disturbances due to factors such as my country’s foreign trade import and export data, it may be difficult to return to the normal range of previous years in the short term. The huge domestic consumer market has created broad room for maneuver for foreign trade export companies to adjust their development layout and respond to external challenges. Faced with such opportunities, many foreign trade companies are actively exploring ways to switch from export to domestic sales.
However, a practical problem is that for foreign trade companies that are accustomed to the export market It is not that easy to expand the domestic market. Usually, when foreign trade companies engage in the domestic market, they lack experience in channels, brands, pricing, etc. These factors become the main obstacles for companies to expand the domestic market.
The person in charge of a foreign trade company said frankly that in the past, the company was only engaged in manufacturing. In the middle stage, the domestic market is still relatively unfamiliar. Companies lack domestic sales channels, talent teams, and market awareness, and are full of doubts about how to switch to domestic sales.
Extended reading
Buyers issue out-of-stock warning! US ports are out of control, import volume is still growing, urge customers to ship quickly!
From the number of ships at anchorage to the number of ship arrivals, shipping bookings, inventory and sales Volume-by-volume, all the latest data paint the same picture: America’s congestion crisis has never been worse, and it’s getting worse.
The U.S. import system has reached its limit, but as retail goods sell faster than inventory Replenishment is fast and it is expected to have to deal with higher import volumes next month.
At the same time, this shopping season, consumers need to pay for more expensive products Price, longer arrival times and be prepared. Some big buyers, including Adidas, Crocs, and Hasbro, even issued year-end stockout warnings.
Los Angeles/Long Beach Port is blocked again, import volume next month Will still grow
According to the latest news from foreign media, two iconic ports with global port congestion, the Port of Los Angeles and the Port of Long Beach on the West Coast of the United States, are blocked again. exploded! The number of container ships queuing up outside the port waiting to berth has once again hit a new high!
It is reported that ships berthing at the ports of Los Angeles and Long Beach, including Including container ships waiting to be berthed at the anchorage and drifting near the port, there are 76 container ships, 4.8 times the number before the outbreak. There are now almost 60% more container ships waiting to berth at anchorages than there are berthing.
“It’s very chaotic right now,” Niels Larsen, head of DSV’s North American sea and air business, recently said Regarding the situation of the container market, he admitted frankly to Danish business daily Børsen: The current market is out of control!
The Port of Los Beach’s WAVE report estimates the number of ships that will arrive at the port , container import volumes are expected to rise in the coming weeks. The agency predicts that container imports will be 89,980 TEU next week and will increase by 34% to 120,928 TEU by the last week of September.
The Port of Los Angeles’ planning tool Signal also shows the same upward trend. Container imports for the week from September 12 to 18 will reach 178,426TEU, an increase of 49% from the expected import volume for this week of 120,070TEU.
At the same time, according to Moody’s Investor Service ) predicts that sea freight rates will remain at record highs this year. Shipping consultancy Sea-Intelligence also said that the surge in container freight rates may continue until the spring of 2022, and freight rates on U.S. routes may increase by another 25%.
Retail goods sales exceed inventory replenishment speed, causing port congestion and ship accumulation
Despite record imports in the first eight months of the year, U.S. retail sales continue to accelerate faster than inventory replenishment. Assuming sales don’t collapse and companies try to reach pre-pandemic inventory-to-sales ratios, imports still have a long way to go due to the need to replenish inventories.
Jason Miller, associate professor of supply chain management at the Eli Broad College of Business at Michigan State University, provided experience Inflation-adjusted BEA data, retail inventories are now well above pre-COVID-19 levels, but sales are so high that the inventory-to-sales ratio is well below pre-COVID-19 levels.
This also explains to a certain extent why goods continue to pour into U.S. ports and why An unprecedented accumulation of boats anchored near Los Angeles/Long Beach.
In this regard, buyers who are still reluctant to ship goods should hurry up Ready to ship.
According to inflation-adjusted BEA data, retail inventories are now well above pre-COVID-19 levels, but sales are so high that the inventory-to-sales ratio is well below pre-COVID-19 levels.
This also explains to a certain extent why goods continue to pour into U.S. ports and why An unprecedented accumulation of boats anchored near Los Angeles/Long Beach.
In this regard, buyers who are still reluctant to ship goods should hurry up Ready to ship.
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