Recently, under the influence of the epidemic, not only national logistics has been affected to varying degrees, but international logistics has also been suspended.
01Two major ports encountered epidemics and shipments were congested
Starting from 5:00 on March 28, Shanghai will implement nucleic acid screening in batches with the Huangpu River as the boundary. In the first batch, Pudong, Punan and adjacent areas will be implemented first and will be lifted at 5:00 on April 1. For the second batch, starting from 3:00 on April 1, the Puxi area will be sealed and controlled, and nucleic acid screening will be carried out. The blockade will be lifted at 3:00 on April 5.
Although Shanghai International Port Group has issued a statement stating that all production units in Hong Kong will maintain 24-hour operations, due to the impact of land traffic control caused by the epidemic, there are still a large number of ships waiting to berth in the waters near Shanghai. Data from VesselsValue shows that the number of ships currently waiting in queues near Shanghai has increased fivefold in two and a half weeks.
Chart on the number of ships waiting to be loaded/unloaded in Shanghai waters. Source: VesselsValue. The data ends on March 30
At the same time, although Ningbo Port is operating normally, many logistics companies have suspended the warehousing business of Ningbo Port, which is equivalent to reducing the business of warehousing and shipping by more than half. Congestion in Shanghai has caused “semi-paralysis” and logistics companies have suspended warehousing operations at Ningbo Port, which will bring a new wave of impact and impact to textile foreign trade companies in Jiangsu and Zhejiang regions!
02 “It’s hard to find a container” and sea freight has skyrocketed. A textile foreign trade manager revealed: “Recently there happened to be a batch of goods to be exported. They were originally exported from Shanghai, but recently even trucks can’t get in or leave Shanghai. So. We can only change to Ningbo Port, but now everyone is using Ningbo Port, and the warehouse space is also very tight, and many logistics do not go to Ningbo Port, which is also very difficult. I finally booked a warehouse space, but the shipping fee was 4 times the usual price!”
Shipping prices have been soaring for two years, but waiting for ships to arrive is still a severe situation faced by foreign trade companies. Along with repeated “no-show” shipping schedules, there are also rising freight rates. The current Ningbo export container freight index has increased by more than 74% compared with the same period last year, which is equivalent to more than four times that of the same period in 2020.
It is understood that the freight rate for a 40-foot standard container on the European route is around US$14,000. In the same period in 2021, the freight rate will be around US$8,600; for the US East and US West routes with relatively large cargo volumes, there is currently a general price increase in the market. . 03 Foreign trade textile companies are “unprofitable”, which really makes matters worse! Since the outbreak of the new coronavirus, textile foreign trade has been greatly affected, and there has been no significant improvement until 2021. Unfortunately, the domestic epidemic will break out again in 2022, which will also have a certain impact on the improvement of foreign trade orders. Textile foreign trade has been even more difficult this year. Although we have received a few orders in a very thin ice environment, there has been a series of shortages of cabinets and rising freight costs, which has caused profits to be repeatedly diluted.
We all know that since the beginning of this year, the prices of raw materials and gray fabrics have increased significantly. Although the price of fabrics has increased to a certain extent, the increase is not as high as that of gray fabrics. Therefore, the profits of fabric traders are lower than in previous years. At this time, the cost of shipping containers has skyrocketed, and the profit margins of fabrics will be greatly diluted or even lost. This will undoubtedly make the company worse, facing not only freight, but also liquidated damages arising from the goods not arriving on time. Textile companies have always operated on a low profit basis. A profit of 10%-15% is already very good. It may take several orders to make up for the loss of this order.
On the eve of every holiday, there will be a period of time in the textile market to rush for goods and deliver goods. On the one hand, downstream customers will place their orders in advance due to the upcoming holiday. On the other hand, manufacturers and traders are rushing to ship goods before customers go on holiday to avoid being unable to communicate with them immediately. Now the time has come to the eve of Qingming Festival. It is the time when trading companies are rushing to ship goods, which has once again caused congestion at the port. The poor supply chain has intensified the contradiction between supply and demand. From the perspective of shipping demand and shipping capacity supply, there is still room for shipping freight to rise.
Various places have continued to implement measures such as city closures, logistics closures, and work and school suspensions. Normal industrial production, shopping and consumption have also been hit. This has also led to a lack of confidence among terminal textile and garment enterprises, and the frequency of new orders and inquiries has been slow. Due to the epidemic, foreign trade shipping costs are easy to rise but hard to fall, and export problems have become more difficult. Downstream gray fabric factories are really suffering, so reducing their operating hours and operating in a low-key manner has become the norm.
For textile foreign traders, the recent order situation, rising freight prices, and whether they can book ships and ship goods on time are all very worrying. Now it is difficult for any trader to ignore this part of the cost, and logistics outages may push up transportation costs again. In this regard, the editor also reminds all textile foreign trade people that the shortage of containers may continue for a period of time. In order to catch up with the delivery date, we must…��Arrange in advance.
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