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From a quarterly reduction to a weekly increase, it is hard to find a shipping company
2020-12-17
From a quarterly reduction to a weekly increase, it is hard to find a shipping company
(Source of the first image: Evergreen Shipping )
(Source of the first image: Evergreen Shipping )
The increase in shipping costs is not news, but how exaggerated is the increase?
Since the second half of this year, the price of ocean freight has continued to rise. According to the latest news from the industry, the cost of a container of US$1,000 last year has now reached US$4,000, and the counter continues to be tight. "Ask the price" policy, traders can only grit their teeth.
According to the source, in the early years, shipping companies’ freight rates were reported quarterly or semi-annually to the company responsible for the contract, that is, the customs broker. The contracting staff shall provide traders' service fees accordingly. However, starting from the second quarter of this year, it was first changed to a monthly quotation, and then to a bi-weekly quotation. At present, it is already a weekly quotation, in order to increase prices more quickly to reflect demand.
Looking back at the beginning of 2020, when the epidemic began to raging, it not only hit the tourism industry, but the WTO also predicted that international trade would shrink significantly. In fact, from February to March this year, the volume of freight was really reduced, and shipping companies launched a policy of austerity. The actual method is "combined transportation."
Unexpectedly, starting from the second quarter of this year, with the recovery of production capacity and the explosive growth of e-commerce shopping, the demand for freight was instantly full. Only the front foot reduces the freight volume, and the back foot orders are bursting. Sea freight is not as fast as air freight. A ship can go out for as long as several weeks or as long as several months. The continuous shortage of space, coupled with the cumulative demand for shipments, has created the present A difficult situation for shipping.
According to the internal quotation information provided by the customs broker, the shipping cost from Taiwan to North America 12/14 is US$3,195 for a standard small container and US$4,410 for a large container. "At this time last year, a cabinet was up to US$1,000.
In other words, the cost of an original shipment for an SME has skyrocketed from NT$30,000 to NT$120,000. If the price is not raised, it will directly earn 90,000 yuan less per container. For high-unit-price products or large companies, it may be affordable, but small companies and low-margin products are complaining.
Some traders choose to dock their tails to survive and directly default and do not ship the goods. Others that are still struggling, are already brewing price increases.
The scary thing is that this increase has not yet stopped. By January next year, it is expected to increase by another 1,000 US dollars (Taiwan-US shipping).
It is difficult to find space, and so is the container. This interlocking situation may not gradually ease until after the Chinese New Year. In the case of various products being out of stock, I am afraid that we will not be able to ship normally until the freight rate stops rising.