html will take effect from May 1st!
shipping surcharge is increased by US$2,000 at one time!
At present, the impact of the epidemic has become more and more profound. Logistics and transportation is still a problem that cannot be ignored. Logistics are not smooth and production progress cannot keep up!
Land transportation:
As of 24:00 on April 20, 2022, a total of 104 toll stations were closed on expressways in various provinces (autonomous regions and municipalities). Beijing, Tianjin, Fujian and other provinces have no closed expressway toll stations and service areas.
At present, highways in Jiangsu, Hebei, Zhejiang and other places still have control measures. It is reported that , Wuxi, , Shanghai and other places cannot get off the expressway, resulting in long-term stranded trucks. Not only that, ship prices are also rising recently. Now that land transportation is not working, it is also very painful to choose shipping.
Shipping:
As Shanghai enterprises resume work and production one after another, it is expected that the volume of shipping will increase rapidly in May.
Recently, many shipping companies announced that they would increase the "comprehensive rate surcharge" (GRI) for trans-Pacific routes from Asia to the United States from May 1, and shipping companies such as COSCO, ONE, Evergreen , Yangming, HMM are all among the price increases!
This time, the price adjustment will be charged a surcharge ranging from 1,000 to 2,000 US dollars. Based on the estimated increase in freight rates, it is equivalent to about one to 20%.
For foreign trade manufacturers, on the one hand, the risk of default has increased, which has led to the company's "dare not to take orders"; on the other hand, it is worried that the loss of suppliers will bring greater losses to the company, which is a dilemma.
Some companies are not unwilling to resume work, but are afraid of making mistakes and taking responsibility. Therefore, even if it has been listed on the whitelist for resumption of work, it has chosen not to resume work because it is afraid of cases and will be suspended again. Although work and production have gradually resumed, there is still a long way to go to solve problems such as personnel on duty, supply chain, and road closure.
Another wave of shutdowns and holidays are on the road
Will textile companies "lay flat"?
At the same time, domestic textile production and operation have also been relatively sluggish due to various factors. Since this year's Spring Festival, the demand for textile market has continued to decline, and the problems of difficulty in shipment and profitability of textile companies have come one after another. Some problems such as high international crude oil fluctuations, global food crisis, financial market inflation, and economic recession concerns have also brought different degrees of impact to the normal operation of the domestic and foreign textile industries. Residents travel less, and the elastic demand for clothing and clothing has declined, which has made terminal demand extremely weak. Over time, the inventory of yarn and cloth indices of textile companies has continued to rise, and the pressure of losses has increased. In addition, some textile companies have made plans to take a long holiday.
During the May Day holiday in previous years, textile enterprises will mostly implement phased adjustments according to their own production conditions, and the market may be more common this year's holiday. In addition, before the holiday, whether it is upstream or downstream markets, expectations for the market situation in May are not optimistic. It is understood that the pressure faced by textile companies in the second quarter of this year has increased compared with the first quarter. Energy prices have soared recently and food prices have risen sharply. However, the bargaining power of textiles, clothing, etc. is relatively weak, and it is difficult to increase the price. Coupled with factors such as the continued conflict between Russia and Ukraine, the negative news for textile companies has gradually emerged. The recent outbreak and spread of the epidemic has made the prevention and control situation in the second and third quarters of 2022 extremely severe, and the impact of " dynamic zeroing " on textile enterprises cannot be underestimated. According to feedback from some textile companies in Shandong, Jiangsu, Zhejiang and other places, when the May Day holiday is approaching, a certain proportion of personnel will be required to adjust the holidays or appropriately delay the holidays according to current production needs.
This year, the pressure of poor demand in the textile market does exist, but last year, most textile companies have made great profits, and some even purchased new production equipment. The goal of expanding production capacity and increasing efficiency is a long-term plan. At present, some companies have taken measures to deal with short-term difficulties by reducing load and shutting down production. The textile industry chain is long, and short-term difficulties are not necessarily a hurdle that cannot be overcome. Therefore, the epidemic situation in some parts of the country has been controlled. With the acceleration of the pace of resumption of work and production, textile enterprises have not yet reached the situation of lying down, and I believe that any enterprise will not be willing to lying down. Therefore, with the expectation of domestic consumption backward, the market may turn around in May.
Source: Shipping Network, China Cotton Storage, Material Viewpoint, Fabric Factory
