Source: Economic Daily
The picture shows the busy container terminal of Dongguan Port. Photo by Ye Jiajian (China Economic Vision)
data shows that from January to July, my country’s foreign trade continued to maintain a rapid growth momentum. However, the situation of foreign trade companies is somewhat worrying. Recently, shipping prices have continued to rise. Container freight rates on some popular routes have exceeded US$20,000 per TEU. The Shanghai Export Container Freight Index, which reflects spot market prices, has reached new highs. Export containers are “hard to find”, and some companies even fall into the dilemma of “containers are more expensive than goods”, “they dare not accept orders if they have orders, and exports are not profitable”. Why is it difficult to "ship" by sea? How to relieve the difficulties of foreign trade enterprises? The reporter conducted an investigation in Guangdong, a major foreign trade province.
Export pressure at the port
The large quay crane equipment at the front of the terminal is constantly lifting containers, and trailers are constantly shuttled back and forth in the yard... The busy scene at the docks of Dongguan Port Group is the epitome of the booming exports of "Made in Guangdong". According to statistics from the Guangdong Branch of the Customs, as of July, Guangdong's foreign trade import and export has been growing for nine consecutive months; in the first seven months of this year, Guangdong's container exports increased 4.6 times.
However, strong international demand combined with the impact of the overseas new coronavirus epidemic has caused continued "obstruction" in maritime logistics and freight rates have risen step by step.
"As exports become more prosperous, since the fourth quarter of last year, the shortage of containers and the difficulty of finding a cabin have appeared throughout South China. In the first half of the year, affected by factors such as congestion in the Suez Canal, the European and American route hub ports With the continued port congestion, the shortage of supply in the international container shipping market has become more obvious. "Zhuang Zhiyong, deputy general manager of the Dongguan Branch of COSCO South China Container Lines Co., Ltd. (South China Container Lines) analyzed that the contradiction between supply and demand is due to the epidemic, on the one hand, and European and American consumers." The demand for "Made in Guangdong" furniture, electrical appliances and other products has increased, and cross-border e-commerce sales have surged. On the other hand, the spread of the epidemic has significantly reduced the operating efficiency of many ports, yards, and trailers around the world, resulting in port congestion and poor container turnover. .
Reporters learned from a number of foreign trade companies that "obstructions" transmitted from overseas and occasional domestic epidemics have caused over the past few months to cause cargo pressure, ships jumping to the port, and boxes being picked up and returned in many ports in the Guangdong-Hong Kong-Macao Greater Bay Area Difficulties and other problems, large and medium-sized enterprises are plagued by "difficulties in shipping" and high costs of shipping.
Those most affected are a large number of processing trade companies that rely on seaborne exports. "It's a headache! The orders received by overseas headquarters are constantly being transferred. One-third of our printers and copiers cannot be shipped out. There has been a backlog of more than 100 containers in the past two months." Kyocera Office Equipment Technology (Dongguan) Yuan Xiji, the head of customs affairs of the company, told reporters that since the terminal yards in Shenzhen Yantian and Shekou are already full of containers, there are also long queues outside the terminals. In the past, it only took one week for goods to be shipped from the factory to shipment, but now it takes nearly a month. ; After arriving at European and American ports, it used to take only three or four days for customers to pick up the goods, but now they have to wait several weeks.
Faced with a backlog of goods, the dilemma for processing trade companies is that they receive orders at their overseas headquarters and can only produce according to orders. "If we do our own marketing, we can temporarily suspend work or reduce production, but we have to do it after receiving the order and cannot stop work." Yuan Xiji said that in order to cope with the dilemma, the company had to choose the more expensive China-Europe freight train, but it is not easy to book , can only solve 1/10 of the original sea freight volume, and for a small amount of urgent customer needs, expensive air freight can only be used instead. "Although freight is the customer's burden, it will eventually affect sales."
Mechanical and electrical products account for nearly 70% of Guangdong's exports. Overseas orders for manufacturing companies are booming, but profits have been thinned by high freight costs. "The cost of the entire maritime logistics chain has increased sharply." Liu Qizhen, customs affairs manager of Dongguan Chuangji Electrical Products Co., Ltd., said that 70% of the company's exported power tools were sold to the United States, and orders increased by 30% in the first half of the year. However, due to the shortage of containers, only 80% of the products can now enter the terminal. Those who cannot enter will have to spend one to two million yuan per month to rent a warehouse and wait for the containers. When goods go to Shenzhen Yantian Terminal, land transportation costs have increased by 30 to 40%. ; Sea freight has increased even more dramatically. It used to cost only more than 2,000 US dollars to ship a 40-foot container to the United States, but now it costs more than 10,000 US dollars.We bear the bulk of the freight. Fortunately, the products have high added value and will not be in a situation where "boxes are more expensive than goods".
Compared with the worries of large enterprises, small and medium-sized enterprises feel the chill of life and death. Industry insiders in the shipping industry told reporters that in an environment where "a cabin is hard to find", large companies have the resources to obtain relatively more shipping slots from shipping companies and the funds to withstand rising freight rates, while small and medium-sized enterprises often hand over their shipping services to shipping companies. Freight forwarders either cannot get space or have to bear higher freight rates. South China Container Line recently investigated small and medium-sized enterprises and found that some companies are facing the risk of suspending production due to warehouse backlogs, delayed delivery, and inability to withdraw funds.
Join forces to relieve difficulties
In order to alleviate the difficulties of enterprises, since this year, Guangdong Customs , ports, shipping and other departments and enterprises have joined forces to implement precise policies to target the congestion points in all links of the maritime chain, flexibly innovate models, open up green channels, and do their best Alleviating the adverse impact of poor international shipping logistics on corporate exports.
Inventory backlog is an urgent problem for foreign trade companies. For this reason, the customs department has launched the "off-factory warehouse" business for processing trade companies.
"Recently, the phenomenon of "explosion of cabins" and "dumping of containers" in maritime exports has occurred from time to time. The waiting time has been significantly extended, and the inventory capacity of enterprises is limited. Many processing trade enterprises' original places registered with the customs cannot meet the demand. At this time, they can apply for a factory "External warehouses are added to store goods. As long as the application is submitted online, the customs will approve it immediately," said Yue Xinyan, chief of the third integrated business section of Dongguan Customs, which is affiliated with Huangpu Customs. "Thanks to Dongguan Customs for helping us to set up multiple off-site warehouses, more than 100 standard boxes of goods were stored, which greatly eased the inventory pressure." Yuan Xiji told reporters.
Exports are "difficult to book space". The port and customs department have joined forces to support chartered ships of cargo in the Greater Bay Area to "go out to sea".
Recently, Dongguan Port has officially opened charter shipping routes to Europe and the United States, opening up a direct channel for Dongguan foreign trade companies to fly to Europe and the United States. "With the support of Shatian Customs, a subsidiary of Huangpu Customs, we have introduced European and American charter shipping routes and can ship nearly 10,000 TEUs of goods every month." Sun Cheng, head of relevant business of Dongguan Port Group, said. Compared with companies feeding goods to surrounding hub ports through Dongguan Port, the shipping cost of European and American charter routes can save US$3,000 per box and alleviate the shortage of space. "Shatian Customs provides us with all-weather customs clearance services and handles ship customs clearance, health quarantine and other procedures immediately, saving nearly a week and saving US$1,500 per container." said Zeng Junhai, manager of the Dongguan Branch of Guangzhou Hangshang Shipping Agency.
Port congestion has also caused export companies to face difficulties in picking up and returning trailers, and land freight rates have soared. Since June, Dongguan Port has joined forces with Guangzhou Nansha Port, Shenzhen Shekou and Yantian Port to launch a barge express service, replacing the original trailer pick-up and return solution with barges, which reduces logistics costs while ensuring the smooth delivery of containers. Catch the big ship. At present, this service has effectively ensured the normal operation of the supply chains of many foreign trade companies such as Huawei , TCL , VTech , etc.
For small and medium-sized enterprises in urgent need of help in times of crisis, China Ocean Shipping Group and its subsidiary South China Container Lines have played their role as central enterprises and implemented precise policies for small and medium-sized customer groups. "The company has formulated a space supply plan for international container routes to make plans in advance and lock space for small and medium-sized customers. We have successively launched the 'U.S. line small and medium-sized customer service line', the European line special flight for small and medium-sized customers, and the 'Australia-New Zealand premium express flight' We provide "one-stop" services for trailers and shipping, and have created a new dedicated e-commerce line for small and medium-sized customers," Zhuang Zhiyong introduced.
Working hard to practice "internal strength"
It is difficult to predict when international shipping will return to normal, and foreign trade companies are still struggling to find good strategies to deal with challenges.
In this regard, South China Container Line suggested that companies should strengthen the coordination of production and logistics, pay attention to the real-time dynamics of the shipping market, adjust the production rhythm according to the space situation, and reduce inventory backlog as much as possible; at the same time, maintain close communication with the shipping company, and solve the problem of shipment in a timely manner problems encountered.
Industry insiders suggest that since the pressure on shipping costs will be difficult to alleviate in the short term, traditional foreign trade companies should promptly consider making new plans for future development. For example, a considerable number of companies that ship by sea are processing companies with supplied materials. They have no pricing or logistics rights, and cannot control the production and shipping cycles. In the current situation where traditional offline supply chain logistics is relatively sluggish, if you can try to create your own brand and open a store on cross-border e-commerce platforms such as , Amazon , etc., you will be able to control supply chain logistics more flexibly.
Foreign trade companies with independent brands and channels have shown obvious advantages over traditional processing trade companies. Dongguan Chuang Electrical and Mechanical Industry, which owns multiple self-owned brands and undertakes a small number of OEMs, feels this deeply. "You can only get a little processing fee for OEM for overseas brands. Under the heavy cost pressure, you can only try to maintain production. After all, it is better to lose 1 yuan than to lose 10 yuan. But private brands have greater profit margins, so you can earn more. , at least we won’t lose money,” Liu Qizhen said.
Since the outbreak of the epidemic last year, more and more foreign trade companies have been actively trying to transform. With their efforts to enhance independent development capabilities and expand living space, Guangdong's foreign trade risk resistance and development resilience are gradually improving. In 2020, general trade accounted for more than half of Guangdong's total import and export value for the first time, occupying a dominant position; while processing trade accounted for 28.2%. In the first seven months of this year, Guangdong's general trade accounted for 52.5% of total import and export value, and the foreign trade structure has been further optimized.
Industry experts believe that the current vigorous development of new foreign trade formats represented by cross-border e-commerce has provided new opportunities for foreign trade companies. The vast number of foreign trade companies should seize the opportunity, improve their "internal strength", and reduce costs, increase the added value of products, and enhance their ability to withstand the storms of the international market through measures such as actively expanding brands and sales channels, enhancing R&D capabilities, and improving automation levels. (Economic Daily reporter Zheng Yang)
