Sea freight prices will rise again from July 1st!
Small businesses are excited to see the “foreign”, while large buyers charter ships and open routes!
The series about shipping driving foreign traders crazy is being updated continuously.
What’s even more frightening is that some companies have given up export orders!
The current extremely chaotic shipping prices
have driven big international buyers crazy
Recently, Home Depot, one of the top three large importers in the United States, announced that under the current extreme circumstances of port congestion, container shortages and the COVID-19 epidemic slowing down transportation progress, it will rent a The ship is entirely owned by Home Depot, and the round-trip route is 100% dedicated to Home Depot to alleviate the current supply chain problems.
The ship will begin operations next month.
A UK-based NVOCC said “outrageous rates” have led to the cancellation of many orders from China, explaining : “This has had a significant impact on retailers who cannot increase prices.” Another British freight forwarder said that the current market is “chaotic.” He said: “Our customers’ imports are coming to a standstill and smaller importers will face closure. In addition, importers are said to be looking to shift production back to Europe.”
Textile foreign trade companies are also driven crazy by shipping costs
“I am almost worried to death. The sea freight for one ship costs over 200,000 yuan, which is too much. It’s too high, and the shipping company hasn’t shipped the goods yet. It keeps saying that it will take two days, two days.” Li Yu (pseudonym), head of Vinings Textile (Suzhou) Co., Ltd., told reporters that the company mainly exports anti-epidemic materials to Spain and other textile products, the order situation has been good since 2020, and the performance is very impressive.
Li Yu said that in the first quarter of this year, the company was not too busy and the gross profit margin was relatively good. However, starting from April, the company became busier. However, due to the surge in sea freight and Due to the impact of RMB appreciation and other effects, the company’s profits fell by half compared to the same period last year.
In this regard, the above-mentioned industry insiders said that textile export companies faced three major difficulties in the second quarter of this year: rising sea freight, rising exchange rates and continued rise in commodity prices.
“The surge in shipping rates is due to the outbreak of foreign epidemics, especially in India, which has greatly affected the global supply chain. Pushing the supply chain upward will affect the imbalance of global shipping. , causing the freight rates of domestic ocean routes to soar. However, due to the epidemic, other countries may have many containers piled up at the port and can be shipped quickly, so their ocean freight is relatively low.” An industry insider gave an example. , the freight cost of a container has increased from US$5,000 to US$10,000, while the entire container may only be worth US$30,000, with freight accounting for more than a quarter. “This has resulted in the competitiveness of some products with relatively low profit margins. Products from other countries are no longer competitive, so there is no need to export, because exporting will result in loss of money.”
“The appreciation of the RMB is due to the fact that the domestic epidemic has been better controlled, and the domestic imported inflationary pressure is relatively large, so the RMB has also increased significantly since the second quarter, about 2% ~3% appreciation, this part of the appreciation is a loss that foreign trade export companies have to absorb by themselves.” said an industry insider.
The peak shipping season is coming
7 Starting from July 1st, sea freight rates will skyrocket again
What is even more frightening is that from July 1st, sea freight rates, which make profits disappear, will skyrocket again! According to estimates by the American Retailers Association, container imports at U.S. ports will remain above 2 million TEU (20-foot containers) in a single month from May to September, continuing to rise from the previous forecast. This is mainly due to the gradual recovery of economic activities. However, U.S. retailers Inventories are still at nearly 30-year lows, and strong demand for restocking will further boost cargo demand.
Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation It is believed that retailers are entering the peak season for shipping holiday merchandise, which begins in August.
There are already rumors in the market that some shipping companies are planning a new round of price increases in July.
According to the latest news, Yang Ming Shipping sent a notice to customers on June 15 stating that the price of the Far East to the United States line will increase on July 15. Far East-US West, Far East- In the Eastern United States and Canada, there is an additional charge of US$900 per 20-foot container and US$1,000 per 40-foot container.
This is Yangming’s third price increase in half a month. It announced on May 26 that it would increase the GRI starting from July 1, with an additional charge of US$1,000 per 40-foot container and US$900 per 20-foot container. It again issued a notice to customers on May 28 that it would be expanded from July 1. A comprehensive rate increase surcharge (GRI) is added, which is US$2,000 per 40-foot container and US$1,800 per 20-foot container; June 15 is the latest increase.
MSC will increase prices on all routes exported to the United States and Canada starting from July 1. The increase will be US$2,400 per 20-foot container, US$3,000 per 40-foot container, and US$3,000 per 40-foot container. A 45-foot container is US$3,798, of which the increase of US$3,798 per 45-foot container is the highest single increase in shipping history!
High sea freight forces customers to stop shipping
Profits of textile companies have been squeezed again and again
Currently, it is understood that many foreign trade companies have received news that customers have stopped shipping due to high sea freight. In the future, costs will continue to rise, and profits will be squeezed again and again!
Some people have said that 2020 will be the “most difficult” year for foreign trade people, but in fact the “most difficult” period has just begun. It doesn’t matter if there were no orders or performance last year. There are orders this year, but the most terrifying thing is that the general environment is eating away at your wealth.
It will be shipped this year, ship it now and cherish it! </p
