The problem is about the cost of shipping

Be vigilant: Crazy sea freight rates are disrupting the supply chain made in China

Since the second half of last year, the ocean freight for exported goods has been rising like a roller coaster, and has soared to about five times the price before last year's price increase, and even almost ten times for some routes. All kinds of signs indicate that this price increase is entirely a posture of shipping companies to take advantage of the epidemic to looting wildly, and to drain foreign trade companies. According to the report, the monthly profit of a shipping company in November last year exceeded the sum of the past ten years, and the current ocean freight rates are no longer the same as in November last year. As the world's second largest economy, my country is bound to become the most important source of customers for shipping companies because of the better epidemic control that can meet production and supply. For well-known reasons, most of the products exported by our country are middle and low-end products, which originally have low added value. After several monopoly international logistics companies have frantically increased their prices, shipping costs have accounted for more than 15% of the value of the goods (this is still just me As far as the industrial machinery processed products are concerned, it is even more unimaginable for products similar to some initial raw materials such as wood and steel). In this case, if relevant companies continue to insist on production and sales, they will have to face losses!

If things go on like this, my country’s export supply chain will be cut off due to the crazy price increases of these shipping companies. Because such a high transportation cost will make our "Made in China" lose its competitive advantage, and it is possible that a group of new suppliers will be born in the importer's local area to replace China's manufacturing. This is exactly what Trump wants to achieve in a trade war against China. What Trump failed to accomplish is being done by several international logistics monopolies! This is definitely a shocking big issue related to the national economy and people's livelihood, and I hope it will attract attention.

Throughout the overwhelming speculation, the reason for supporting the reduction of sea freight is nothing more than the shortage of containers caused by the epidemic. If you calm down and think about it, you will find that this is a false proposition. Since it was the epidemic that caused the unloading of seaborne cargoes to reach the destination port, the container was tense, and the shipping company was unable to collect sufficient quantities of goods exported from abroad to China (also known as "back-and-forth"). , Then it is reasonable for the shipping company's revenue to decline, but the situation is just the opposite. Every shipping company makes a lot of money in this situation. According to the third-quarter financial report of Evergreen Shipping, which was pushed to the forefront due to the blockage of the Suez Canal, its single-quarter after-tax net profit reached 8.185 billion yuan, an annual increase of 5937%. Yangming Shipping’s single-month after-tax net profit in December last year It was NT$5.007 billion (approximately RMB 1.163 billion), a year-on-year increase of 3229.38%. COSCO Shipping Holdings has disclosed its first quarter performance forecast for this year. During the period, the company has a pre-profit of 15.450 billion yuan.

Anyone who has booked a space knows that when there is a shortage of goods in the off-season, the more they are told that the space is tight and the freight has increased. Why? Various shipping companies are tacitly aware of this---adjust the capacity and reduce the number of ships that are normally put into operation by half. Naturally, there is no need to worry about running out of goods, and it can also create the illusion of "prosperity" with tight capacity, and the freight will follow It grows up. As a result, the investment in transportation capacity is reduced, and the amount of cargo is reduced, but the money is not lost. The blockage of the Suez Canal a few days ago caused considerable losses to the relevant consignees and consignors. The shipping company should reflect on its own faults and improve its transportation capabilities and services in order to obtain customers’ forgiveness, but no one can think of it. However, this incident has become their reason for accelerating price increases. On April 9th, the Ningbo Container Freight Index (NCFI) in Northern Europe and the Mediterranean rose 8.7%, almost the same as the 8.6% increase in the Shanghai Container Freight Index (SCFI). This makes the export companies that have been squeezed to desperation by high freight rates even worse.

The current shipping market is dominated by so few Big Macs. One raises its price, and other companies silently follow suit, and everyone tacitly makes a fortune together. In this way, the meager profits created by the manufacturers who worked hard day and night on the front line of production were completely taken away by these shipping companies. Everyone knows that the profit of the general manufacturing industry in my country is no more than 10% at most, but the price increase of shipping companies far exceeds 15% of the value of the goods. If it is produced, it will lose money, and it will face unemployment if it does not produce. However, for export companies, sea transportation is the only mode of transportation in the production supply chain, and there is no longer a second way to go.

According to the latest data, as of December 1, 2020, among the top 100 global liner companies, Maersk Line ranks first, Mediterranean Shipping ranks second, and COSCO Shipping Lines + Orient Overseas Container Lines ranks third. This shows that Chinese shipping companies still have a certain right to speak. It is hoped that while strengthening anti-monopoly investigations and cracking down on driving up freight rates in accordance with the law, the relevant departments will coordinate with Chinese shipping companies so that they will focus on the overall situation of Made in China and break away from the price alliance of the monopoly group. In this way, the price alliance will inevitably be self-defeating.