Shipping Prices Continue To Skyrocket! The Freight Has Exceeded The Value Of The Goods By 60%! Shipping Companies Continue To Add Surcharges!

  "It's really out of control now." In the face of strong demand for overseas orders, in order to ensure export capacity, Mr. Zhou, the person in charge of a foreign trade company in Tianjin, just visited a circle of shipping companies, but he still could not get more space, so he could only ask for help from the freight forwarding company at a high price. The price of a 40-foot container from Tianjin to the US East will rise to RMB 17,000-RMB 18,000 in the second half of the month.

  "Some freight forwarders even offer more than 20,000 US dollars," Mr. Zhou sighed.

  "The freight is now more than 60% of the value of our goods. If we add 25% of the tariff, there is almost no profit at all." Mr. Zhou said, there are already companies with lower value in the market facing higher value. Freight, in desperation can only abandon the contract.

  To make matters worse, there are rumors in the market that from July 1st, shipping companies will add another round of surcharges. Prior to this, on June 1st and June 15th, shipping companies have already added two rounds of surcharges. Some markups increased by nearly $5,000 from May.

  Stimulated by the strong increase in freight rates, the Hong Kong and A-share shipping stocks rose across the board on June 10. As of the close, the leading company COSCO Shipping Holdings (01919.HK) rose 11.63%, and the stock closed at the daily limit in the A-share market.

  Foreign shipping companies give priority to the allocation of space to foreign companies

  For containers from Tianjin to the East of the United States, the price of a 40TEU container in May was 13,000 US dollars. Before the epidemic, the freight of the same specification on the same route was less than 3,000 US dollars.

  In the first half of June, the cost of a 40 TEU container from Tianjin to the eastern United States was US$14,000 to US$16,000, while in the second half of June it rose to US$17,000 to US$18,000.

  On the other hand, shipping companies also lack space. Due to the surge in demand in the entire market, shipping companies are also picking up customers and providing accommodation in accordance with the VIP level. Mr. Zhou revealed that several foreign-funded shipping companies have expressed to him that they are unable to help. Even for companies such as CMA CGM, which have long-term cooperation with them, the allocation of space has been collected at the group level, and the Chinese branch has been unable to select customers. According to CMA CGM staff, the group issues a list of priority customers to shipping companies. There are multiple levels from VVVIP to VIP. Usually at the top of the list are companies in the country where the shipping company is located and large multinational companies. Companies like Mr. Zhou's companies rank relatively low and can hardly be allocated a space.

  According to Mr. Zhou, this kind of client selection is currently prevailing in foreign shipping companies. For example, the company’s long-term partner, Japanese ship-owner ONE, preferentially provides limited space to Japanese companies and other large multinational companies. Even if they have cooperated for many years, it is very Difficult to get one and a half cabins. Sometimes there is a shortage of containers, and a large number of shipping companies have a backlog of containers in the United States and European ports.

  Mr. Zhou reluctantly went to a Chinese-funded shipping company. Although COSCO SHIPPING was willing to help, it did not have enough space. In the end, Mr. Zhou could only ask the freight forwarding company to cast a net extensively for help, biting the bullet and accepting the market freight rate.

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