Russia-Ukraine negotiations continue! International freight rates may rise

Russia-Ukraine negotiations continue! International freight rates may rise

As the war escalates, the people will be the most hurt.

Since the beginning of last year, the situation between Russia and Ukraine was tense, and many cross-border sellers were deeply affected, with the number of orders plummeting. Now that the tension between Russia and Ukraine has escalated again, sellers are feeling the chill. With cargo ships being blown up, the number of orders decreasing, logistics costs rising, and traffic being suspended, many sellers who have already received orders are in trouble.

Yesterday, the Russian-Ukrainian negotiations ended. The meeting lasted for 5 hours, and the two sides clarified the plan on the issue of ceasefire and cessation of military actions in Ukraine. In order to finally sign and implement the plan, the two sides will hold talks again in the near future, hoping to bring good news.

The seller was hit by an airstrike and 30,000 tons of goods were blown away

As the war between Russia and Ukraine escalates again, many sellers are affected.

"My goods were blown up by the Russian army in Ukraine," a seller said in the seller group. 30,000 tons of rapeseed oil were really blown up. At that time, many people in the industry did not take it seriously and thought it was a joke, but when the news of the start of the war came in overwhelmingly, they realized the seriousness of the matter.

According to official information, several cargo ships have been attacked by bombs, including Russian civilian cargo ships, Turkish cargo ships, Japanese cargo ships, etc. , which not only caused the loss of cargo, but also some casualties. Attacks on merchant ships are endless, and the risks of the commodity carrier industry are gradually increasing under the conflict between Russia and Ukraine.

A container ship named "Joseph Schulte" from Hong Kong, China, is still docked at the Odessa port due to the war between Russia and Ukraine, but several shipping companies have announced that they will stop working at the port. It is understood that the ship has previously called at ports such as Shanghai, Ningbo, Xiamen, and Shekou in China. Cargo owners and freight forwarders with cargo on board this ship need to communicate with the shipping company in advance about the latest status of the cargo to avoid losses due to cargo delays or other factors.

In addition, due to the escalation of the Russian-Ukrainian conflict, most of Ukraine's ports have been closed and rail transportation has been suspended. Not only that, the Ukrainian military has also issued an order to suspend all commercial activities in Ukrainian seaports, including blocking access to the Sea of ​​Azov.

Under the situation between Russia and Ukraine, many sellers have felt a deep chill.

"From December last year to now, the number of orders has been decreasing. It used to be common to sell 100,000 yuan a week, but now it can't be sold that much in two months," said a seller. It is understood that since the tension between Russia and Ukraine last year, sellers have had a hard time, especially since the first week of this year, Ukraine's orders have been zero.

But in reality, sellers without orders may be lucky, and having orders will only make things worse for them.

A seller posted on a social forum that his factory still has orders from Ukrainian customers, and the full payment is required before shipment, without a deposit. Now the materials are in place and they are ready to start production, but the war between Russia and Ukraine broke out suddenly, and they don't know whether to stop production.

There are also manufacturers who have received the final payment for the goods and said they are ready to ship the goods, but there are news reports that the Odyssey Port, which is where the goods are received, has been controlled, and they are worrying about whether they should ship the goods.

Regarding the seller's experience, many people suggested that for new orders, the seller should first contact the customer to inquire and confirm the actual situation before deciding whether to continue production. Goods waiting for shipment after the final payment has been made should not be shipped for the time being. After all, the reality is there, and the seller can only hope that the dark clouds above Russia and Ukraine will dissipate quickly.

Freight rates may rise! International logistics and transportation will be affected

The conflict between Russia and Ukraine has led to a significant drop in order volume, which is a direct impact. Also affected is the international logistics situation, which has attracted the attention of practitioners in many industries.

On the 24th local time , the Ukrainian administration announced the closure of its entire airspace. However, before that, many airlines including KLM Royal Dutch Airlines, Lufthansa under the Lufthansa Group, and Swiss International Airlines had also suspended flights to and from Ukraine.

Things are still developing. Several shipping companies including Mediterranean Shipping Company, CMA CGM, Maersk Line, Hapag-Lloyd and others also issued announcements on February 24 , stating that they will no longer dock at Ukrainian ports from now on and will stop accepting new cargo bookings to and from Ukraine. The resumption time will be notified separately.

On the other hand, as the largest port on the northern coast of the Black Sea, Ukraine's Odessa port has been taken over by the Russian army. Will the subsequent transportation of goods be affected?

The head of a logistics company in Shenzhen said that nearly one-third, or even half of the cargo transportation will stop at the Port of Odessa. The most worrying thing is that when the goods arrive at the port, no one picks them up for a long time, resulting in huge demurrage fees, warehouse rents and container rents. At that time, the insurance company may refuse to pay compensation on the grounds of "force majeure" such as war . At the same time, some partners of the Port of Odessa may even leave at any time, resulting in service interruption.

Based on the above situation, the goods in transit are very likely to be delayed. For safety reasons, sellers must be cautious in the near future and respond in a timely manner according to future changes in the situation and notifications from shipping companies.

At the same time, under the influence of various factors in the domestic logistics market, the situation of being hard to find a cabin in the past no longer exists. As the supply of cabin space exceeds the demand, many freight forwarders have begun to reduce freight rates, and many sellers are eager to ship goods. However, some sellers also said that if they put new products on the market because of low freight rates, there will inevitably be a backlog of goods in the later stage, and clearing the goods will be a big problem at that time, so they still need to be cautious!

Some industry insiders believe that this round of price cuts is likely to be temporary. When factory production returns to normal, sellers' shipping demand will increase and prices will inevitably rise accordingly. This week, a freight forwarder said that the prices of sea and air freight will increase after March, and reminded sellers with shipping needs to arrange shipments as soon as possible.

Nerijus Poskus, vice president of global ocean shipping at digital freight forwarder Flexport, has warned that 2022 will likely be another period of congestion and high freight rates, and freight rates will remain high. In light of the above, the editor recommends that sellers with recent shipping plans should pay attention to freight rate changes in a timely manner, and also control the volume of new models, and make decisions after testing the order volume to avoid cargo accumulation.

On the other hand, as the main land freight channel between China and Europe, the safety of China-Europe trains has also attracted attention. According to reports, as of February 25, based on feedback from multiple parties, China-Europe train transportation is still stable and train operations are not affected for the time being, but how it will go in the future and whether it will change depends on how the situation develops next.

In general, the drop in freight rates is only temporary, and it is expected that they will rise again. The war between Russia and Ukraine is likely to cause freight rates to rise earlier than expected. For sellers with shipping plans, logistics costs are a key point, but the safety of the goods is even more important. Therefore, a comprehensive consideration should be made before making a decision when shipping.

logistics

Russia and Ukraine

freight