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Aug 31,2021

Collapse! Congestion on China-Europe railways has increased! Freight rates hit record highs

Under the impact of the new crown pneumonia epidemic, the global shipping industry is facing its biggest dilemma in 65 years. Affected by the epidemic, some domestic flights have been cancelled, and foreign flights will also have varying degrees of delays such as temporary cancellations of goods. Recently, the prices of express and Air freight services have risen rapidly!


Congestion at the West Coast of the United States has become a well-known secret. In the past few months, the congestion of major ports on the West Coast of the United States has eased and ship turnaround times have improved. However, at present, the level of congestion has not only rebounded from the previous recovery nearly half of the time, but also set a new record. At the same time, market demand exceeds supply, and US shipping prices have soared!


European railways also ushered in delays of varying degrees. Due to high transportation demand, railway maintenance, severe weather, port border epidemic prevention and control, port congestion and other reasons, abnormal car plate circulation, manpower shortage, reduced railway reloading capacity, and serious train delays.


1. Polish railway maintenance, Malašević, Brest station is full, Belarusian congestion: 8. 4-8. 20, Polish Malašević border railway maintenance has been completed, and there are still some parts of this line at present The backlog of trains in Belarus is heavily congested. Some trains are in Brest. Belarus keeps them and even extends to the border of Kazakhstan, Chinese ports and the territory. It is expected that the congestion will take several weeks to ease. Railway repairs elsewhere in Poland will continue until November.


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2. Port of Hamburg maintenance: The Port of Hamburg will be closed from August 30, 2021 to September 06, 2021, and the return train to the Port of Hamburg will be affected. At present, some trains have planned to bypass the port or change their routes.

3. There was congestion at the Zameng Ude port, and a large number of trains lined up for reloading.

4. The storage time of containers is long, and the cargo volume of China-Europe trains is large. The storage of containers in major European stations has reached the upper limit, squeezing the normal loading and unloading of trains. Cannot afford to provide loading and unloading plans for the following trains. Resulting in cyclical delays on the return journey.


1. The global port of plug and freight forwarding increase the price to push the freight rate to record highs


Recently, at the monthly economic talks on the theme of "International Logistics and Shipping Situation" held by the National Economic Center, Jia Dashan, the deputy dean of the Institute of Water Transport Sciences of the Ministry of Communications, pointed out that in terms of tonnage, compared to 2019, it is expected to be 2021. Global shipping demand increased by 4.4% in the year, while container demand increased by more than 5%.


In terms of capacity, compared with 2019, the size of the global maritime fleet will increase by 4.1% in 2020 and is expected to increase by 3% in 2021.


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He pointed out that compared with 2019, global shipping demand this year is expected to increase by 1%, container growth by 5%, while the size of shipping capacity and container supply will grow by 7.1% and 7.4%, respectively. There has been a significant rise.


In his view, the rise in container ship rentals, seafarer costs, intermediary fees, and oil prices have all contributed to the surge in shipping costs.


Data shows that the shipping price of 40-foot standard containers on the China-US East route has exceeded US$20,000, a five-fold increase over the same period last year.

The Shanghai Export Container Freight Index, which was announced on August 27, representing the spot price, was recorded at 4385.62 points, which continued to hit a record high. Compared with last year's lowest point, the increase was more than 4 times.


Song Xiaoming, deputy general manager of Guangzhou Port Group, introduced that the current global container shipping capacity is 24 million TEU, and the container reaches 48 million TEU. In the first half of the year, the capacity from China to North America and Europe increased by 55% and 30%. However, the “difficult to find one cabin, and the difficulty of finding one container” continued to intensify.


In Song Xiaoming's view, the fundamental reason for the lack of capacity lies in the inefficiency of the capacity caused by the port clogging and the shortage of seafarers.


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At present, the average congestion time of basic ports in Europe is 3 to 5 days, that of US West ports is 10 to 12 days, and US East ports is about 7 days. Recently, Asian ports such as Yantian Port and Ningbo Port have also experienced congestion.


In addition, he emphasized that it is necessary to be alert to the problem of freight forwarders' price increases, which push up the entire shipping price.


Since the Ministry of Transport of China has strict management of shipping prices, the prices of all routes and various surcharges need to be reported to the Shanghai Air Exchange, so the basic charges of shipping companies are not too high.


However, the layer-by-layer price increase of the intermediate freight forwarding companies has doubled the price, which has caused considerable pressure on the logistics cost of Air freight services for the export of manufacturing enterprises.


2. The freight rate has skyrocketed, and the Ministry of Commerce: Measures have been taken


Since the outbreak of the epidemic, the logistics cost of related shipping has soared by more than 10 times. In addition, the second half of the year is the peak season for shipping, with strong demand and insufficient capacity, and shipping prices have soared. Some sellers said that comparing the overall cross-border logistics freight rates in July and August, the increase has been close to 50%.


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High shipping costs squeeze seller profits. Some sellers said that due to the soaring freight, they have already issued a single loss, even so, it is still "hard to find a box." At present, some freight forwarders have refused to accept low-value goods.


According to the analysis of many industry insiders, the situation of high ocean freight rates is very likely to continue until next year.


A few days ago, at a regular press conference held by the Ministry of Commerce, the spokesperson of the Ministry of Commerce Gao Gao said: “The Ministry of Commerce has worked with the Ministry of Transport, the Ministry of Industry and Information Technology, the State Administration of Market Supervision and other units to increase container supply and enhance shipping Active measures are taken in terms of transportation capacity and strengthening international cooperation."


Local governments have also increased their shipping service guarantees for small and medium-sized enterprises to help them reduce costs and losses.


According to the Zhejiang Daily, in response to shipping problems, Zhejiang has launched the “one thing” for international containers to collect the needs of foreign trade companies and feed them back to shipping companies and freight forwarders one to two months in advance. To


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According to the collected enterprise demands, the Zhejiang Provincial Department of Commerce has cooperated with the Provincial Department of Transportation and the Provincial Seaport Group to increase capacity and open e-commerce express routes.


In the first half of this year, Ningbo Zhoushan Port opened 18 new foreign trade routes, including 8 ocean trunk routes, increasing the total number of routes to 272. To


In addition, the Zhejiang Provincial Department of Commerce also organizes foreign trade companies to communicate with shipping companies. Promote 1,580 key foreign trade companies in Zhejiang Province to sign cooperation agreements with shipping companies in the form of "quantity and price mutual guarantee", and the contracted freight rate will be reduced by at least 30% on average.


The Ministry of Commerce also stated that it will continue to work with relevant departments and localities to further study targeted measures, do a good job in stabilizing foreign trade and smooth international logistics, strengthen cooperation with various trading partners, and work together to cope with challenges.


The Ministry of Commerce has stated that it is believed that other local governments will also take action in the future.

However, high shipping prices and port congestion have become a global problem, and sellers still need to be more prepared.