From February, prices for goods from China may rise significantly
From February, goods from China may rise significantly. This was reported in the group of logistics companies ZAMMLER.
The increase in prices is projected due to rising costs (more than three times) of sea transportation from China. There are several reasons for this.
The first is the lack of empty containers for export goods.
In China, exports now prevail over imports. Due to the fact that goods are imported to China significantly less than supplied from China, there is a catastrophic shortage of containers for shipping.
Sea lines are forced to bring empty containers from other countries, cancel ships from feeder ports and move them to the main, or cancel ships altogether due to unprofitable flights. Such actions lead to additional costs for long-distance transportation of goods. It also leads to an increase in transit time for the delivery of goods to the port of destination and, as a consequence, a shortage of goods.
“For example, one of our customers, an electronics supplier, found himself in a situation where instead of 9 containers of equipment from China, he received 5 containers for the planned shipment. There were no more empty containers in the sea line. Since in most lines the shipping takes place once a week, we had to send 4 more containers to the next week at a higher rate. We also could not try to book these containers with another line, because there is such a thing as a “cancellation fee”. It used to be 250-300USD / for a 40-foot container, now this figure sometimes reaches 2000USD. We and our client have become hostages of the situation, ”says Kateryna Boboshko, Head of Sales (FS, FA) of the ZAMMLER logistics group.
The second is the peak of the season.
New Year’s holidays in Ukraine in January and Chinese New Year in February. Traditionally, during this period, sea lines introduce a surcharge of $ 500-700 per TEU (one 20-foot container). This year, this amount is three times higher – from $ 1,500. In China, for example, they want to compensate for the losses they suffered in the same period last year due to the beginning of the COVID-19 pandemic and a hard lockdown.
According to Kateryna Boboshko, if in May the delivery of one forty-foot container cost about $ 3,000, then in January the price for such a container from the main ports will fluctuate between $ 9-10,000. Many low-cost goods have stopped being shipped at all. For example, food supplements. Now they are faster and safer to buy in Europe, and the price is now equivalent to delivery from China. Many Ukrainian producers and suppliers, who do not have the opportunity to reorient from the Chinese market, have stopped purchasing some goods altogether.
All these problems in sea freight will begin to stabilize gradually from March. Meanwhile, many customers are reorienting their freight traffic from sea transportation to rail delivery, according to the ZAMMLER group of companies, which is now the official partner of the Chinese operator of the direct container train to Kyiv-Lisok.
ZAMMLER notes that the main advantages of delivering cargo from China to Ukraine by rail are reliability, attractive transit time (now, at the peak of the season, 20-25 days) and, to date, identical, compared to sea, the cost of transportation.
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