As logistics costs continue to rise, some companies have set up their own shipping companies

Since the conflict between Russia and Ukraine, many Western countries have introduced corresponding policies to sanction Russia. As a major oil exporter in the world, Russia's oil exports have naturally been affected to a certain extent, and the problem of rising global oil prices has followed.

For ordinary people, rising oil prices mean more expenses for daily transportation, and the luxury of filling up #92 and #95 is gone forever. For the cross-border e-commerce industry, rising oil prices mean higher logistics costs in operating costs and lower profits, which is closely related to fuel surcharges.

Costs rise, many logistics companies raise freight rates

ups

Starting this week, users of UPS's U.S. Ground services will pay a 16.75% fuel surcharge, which will apply to the base freight rate and most additional services (surcharges) for each shipment. This week's fuel surcharge is up from 15.25% last week and 15% the week before.

Meanwhile, for UPS international customers shipping to and from the United States, data from Monday showed that outbound shipments will be subject to a 23.5% fuel tax, while imports will be subject to a 27.25% fee.

FedEx

FedEx raised its surcharge by 1.75% on March 17. At the same time, starting from Monday this week, it will impose a surcharge of 17.75% on each US package handled by ground, a surcharge of 21.75% on domestic air and ground packages shipped by its express units, a tariff of 24.5% on all US exports, and a surcharge of 28.25% on US import transportation.

USPS

At the end of last year, USPS issued a new policy to charge additional fees for packages exceeding a certain length. The policy officially took effect on April 3 this year. The specific content of the policy is:

USPS will introduce new fees for certain packages, which will add an additional $1.50 for packages that are over 1 cubic foot, or over 22 inches, and for which exact dimensions have not been provided.

At the same time, a surcharge of $4 will be added for packages longer than 22 inches; a surcharge of $15 will be added for packages longer than 30 inches; and a surcharge of $15 will be added for packages with a volume exceeding 2 cubic feet.

However, according to foreign media reports, USPS submitted a new price increase plan to the Postal Administration Commission. USPS now adjusts rates twice a year. Starting from July 10 this year, new rates will be implemented for some products and services.

Among them, the cost of mailing letters and sending packages through Media Mail will increase, and the rate of First Class Mail will increase by 6.5%. It also increased the rates of certain services, including mailbox rental (6.8% higher) and money orders (14.4% higher). In addition, USPS also plans to adjust the prices of insurance and certified mail.

Other price adjustments are mainly as follows: On July 10, the price of a Forever stamp for ordinary mail will increase from 58 cents to 60 cents; the additional price per ounce for a Single Piece letter will increase from 20 cents to 24 cents, and under this condition, the price of a 2-ounce letter will increase from 78 cents to 84 cents; the cost of sending a 1-ounce letter to other countries will increase from $1.30 to $1.40.

In announcing the market-led rate increase, USPS said, "With inflation and continued increases in operating expenses , these price adjustments will help deliver on America's delivery plans , including a $40 billion investment in core postal service infrastructure over the next 10 years . USPS will continue to offer the lowest letter and mail postage rates in the industrialized world , giving full play to its transportation value. "

As global oil prices rise and many express logistics companies continue to raise freight rates, sellers' logistics costs continue to rise. Coupled with global supply chain congestion and shipping crises, some retailers have begun to enter the logistics field and establish their own shipping businesses.

Lidl launches shipping company - Tailwind Shipping Lines

To solve supply chain problems, German retail giant Lidl, a subsidiary of the Schwarz Group, is setting up its own shipping business , Tailwind Shipping Lines . Based on the current ship leasing agreement, observers expect Lidl to start Tailwind Shipping Lines operations in the coming months.

It is reported that Lidl will operate its ships jointly with major shipping companies and will continue to work with carriers to meet some of its transportation needs. Lidl said that in the future it plans to transport some of its goods on its own ships, with a weekly transportation volume of approximately 400 to 500 TEU.

Consulting firm Alphaliner said that Lidl has purchased the 5,527 TEU Panamax freighter Talassa from shipowner Peter Dohle Schiffahrts. The ship is equipped with 500 refrigerated plugs and has a deadweight of 68,288 tons.

In addition, Lidl has chartered three broad-beam vessels, including sister ships Wiking and Jadrana , both built in China, each with a capacity of 4,957 TEU and a deadweight of 58,000 tonnes. Another vessel confirmed for charter is the 3,868 teu Merkur Ocean, built by FA Vinnen in Bremen , with a deadweight of 51,000 tonnes.

Michael Vinnen, manager of FA Vinnen & Co., has confirmed media reports , writing on his LinkedIn account: “We are very much looking forward to working with Tailwind Shipping Lines and are proud that they have chosen our ships. So to keep our ships full , do n’t forget to shop at Lidl markets.”

Lidl declined to provide details of its shipping plans, but Alphaliner speculated that the vessels would operate between Asia and Europe , with the first Tailwind Shipping Lines operations expected to begin this summer.

Lidl is not the only company that has chartered ships to build shipping operations amid continued port congestion and supply chain disruptions . Long before this, a series of US retail companies such as Walmart, IKEA, Costco, Home Depot, etc. directly chartered ships to transport goods from Asia to fill the gap in container transportation capacity caused by the supply chain crisis .

In addition to retailers entering the shipping business, existing shipping companies are also making multiple arrangements to expand their freight business.

Maersk Launches Maersk Air Cargo

To meet the diverse logistics needs of its customers, freight giant Maersk has announced the launch of Maersk Air Cargo , an air freight business to enhance the company’s comprehensive integrated logistics service capabilities.

Maersk will take over the existing business of aircraft operator Star Air and select Billund, Denmark's second largest airport, as the air cargo hub for Maersk Air Cargo . In addition to taking over Star Air's existing business, Maersk Air Cargo will gradually deploy and operate another five aircraft - two new B777Fs and three leased B767-300 freighters. It is reported that three new B767-300 freighters will be added to the US-China route , and the new aircraft are expected to begin operations in the second half of 2022.

As an independent service, Maersk Air Freight can help customers transport goods by air to their destination in the shortest possible time . In addition, Maersk combines air freight with sea, land , warehousing and customs services to provide users with a variety of logistics options.

For cross-border e-commerce practitioners, the increase in logistics and freight costs will indeed bring certain difficulties to operations. Sellers can try to layout multi-faceted logistics channels to optimize operating costs to the greatest extent.

logistics

Cross-border e-commerce market

Shipping