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
It has driven big international buyers crazy
Recently, Home Depot, the top three large importers in the United States, announced that in the current Under the extreme circumstances of port congestion, container shortages, and the COVID-19 epidemic slowing down transportation progress, we will rent a completely own freighter, and the round-trip route will be 100% dedicated to Home Depot to alleviate the current supply chain problems.
The ship will begin operations next month.
A UK-based NVOCC says “outrageous rates” are causing many from Orders from China were cancelled, explaining: “This has had a significant impact on retailers who are unable to increase prices.” Another British freight forwarder said the current market was “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 ocean freight for one ship costs more than 200,000. It’s too high, and the shipping company hasn’t shipped the goods yet. It keeps saying that it will take two days or two days.” Li Yu (pseudonym), the head of Vinings Textile (Suzhou) Co., Ltd., told reporters in Shengze Oriental Textile City. The company mainly exports anti-epidemic materials and other textile products to Spain. Since 2020, the order situation has been good and the performance is very impressive.
Li Yu said that the company was not too busy in the first quarter of this year and the gross profit margin was relatively good. However, starting from April, the company became busier, but due to shipping Affected by the surge in fees and the appreciation of the RMB, the company’s profits fell by half compared with 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 sea freight is due to the outbreak of foreign epidemics, especially in India, which has greatly affected the global supply chain. Pushing up the supply chain will affect the world. The imbalance in shipping has caused the freight rates of domestic ocean routes to soar. However, due to the epidemic, other countries may have many containers piled up at ports and can be shipped quickly, so their ocean freight rates are relatively low.” For example, industry insiders said that the freight cost of a container has increased from US$5,000 to US$10,000, while the entire container may be worth only US$30,000, with freight accounting for more than a quarter. “This has led to the decline of some products with relatively low profit margins. The competitiveness is no longer competitive compared with products from other countries, so there is no need to export, because exporting will lose money.”
“The appreciation of the RMB is due to the fact that the domestic epidemic has been better controlled, and domestic imported inflationary pressure is relatively large, so the RMB has also increased significantly since the second quarter. There is an appreciation rate of about 2% to 3%, and 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
July Starting from July 1st, sea freight rates have skyrocketed again
What’s even more frightening is that from July 1st, the bulk of sea freight rates that have made profits disappear will once again rise Skyrocketing! 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, believes that retail sales Businesses 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 Far East to the United States line will increase prices on July 15, Far East-US West, Far East-US East and Canada, an additional US$900 is charged for each 20-foot container, and an additional US$1,000 is charged for each 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 and US$2,400 per 40-foot container. US$3,000, 37 per 45-foot container98 US dollars, including an increase of US$3,798 per 45-foot container, setting a record for the highest single increase in shipping history!
High sea freight forces customers to stop shipping
The profits of textile companies have been squeezed again and again
At present, it is understood that many foreign trade companies have received customers due to high sea freight. News of stopping shipments, and the future trend, costs are still rising, profits are being squeezed again and again!
Someone said before that 2020 will be the “most difficult” for foreign trade people, but in fact it is “the most difficult” 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 and cherish it!