57 voyages cancelled, sellers: waiting for freight rates to skyrocket

In China, outbreaks have occurred in Ningbo, Shenzhen and other places, and cross-border traders' concentrated stocking before the Spring Festival has been directly impacted. This morning ( the 11th), Shenzhen reported 4 new crown infections, and sellers are getting restless again.

Globally, the number of newly confirmed COVID-19 cases has exceeded 2 million every day , and the epidemic has spread on a large scale in many European and American countries. In a nucleic acid test at the West Coast Terminal in the United States, 2/3 of the workers tested positive. The work efficiency of the terminal can be imagined.

Under the chain reaction, voyage cancellations and port skipping occurred frequently. According to statistics, in the next four weeks, the world's three major shipping alliances canceled a total of 44 voyages, and major routes such as the Trans-Pacific canceled 57 voyages, among which the routes to the west coast of the United States were canceled more frequently.

Last week, Matson notified that the shipping schedule on January 19 and 20 was cancelled and postponed to January 26 and 27. Matson prices rose accordingly, and cross-border sellers said they were "waiting for Matson prices to rise to the sky." The market price was chaotic, and some people received quotes returning to 30. From as short as this January to the next one or two years, sellers will be under great pressure from freight costs.

On the sales side, since Christmas, many sellers have reported poor order volumes and have just paid hefty storage fees for unsaleable products. Due to delayed shipments, slow listings, etc., front-row sellers in some categories are out of stock and have begun to raise prices slightly.

57 voyages cancelled, shipments to the West Coast of the US affected

The Shanghai Shipping Exchange's weekly report indicated that freight rates on many routes are currently maintaining high levels, including those on European and North American routes as follows:

European routes. The epidemic continues to spread on a large scale in many European countries, and the number of newly confirmed cases continues to hit new highs every day. The demand for daily necessities and medical supplies continues to remain high, driving the demand for transportation to continue to improve. The epidemic has slowed down the recovery of the supply chain system, and the space continues to be in a tight situation, and the market freight rates are hovering at a high level.

On January 7, the market freight rate (sea freight and sea freight surcharge) from Shanghai Port to the European basic port was US$7,777/TEU. On the Mediterranean route, the market situation is basically synchronized with the European route. The average space utilization rate of Shanghai Port ships remains high and the market situation is stable. On January 7, the market freight rate (sea freight and sea freight surcharge) from Shanghai Port to the Mediterranean basic port was US$7,529/TEU.

North American routes. The large-scale spread of new mutant strains has led to the worsening of the epidemic in the United States, with the number of new COVID-19 cases reaching 1 million per day . The re-emergence of the epidemic has had an adverse impact on economic recovery, and future economic recovery may be weak. Transport demand remains high after entering the new year, supply and demand fundamentals are stable, and the average space utilization rate of ships in Shanghai Port continues to be close to the full load level. This week, the market freight rates of Shanghai Port's US West and US East routes maintained a good trend.

Ocean freight prices are at a high level, but even so, transportation supply is insufficient.

According to statistics from China Shipping, the latest data released by Drewry recently showed that in the next four weeks (weeks 2-5), the world's three major shipping alliances have successively canceled a number of voyages. Among them, THE Alliance has the most canceled voyages, with 20.5 voyages canceled; 2M Alliance has 15 voyages; and Ocean Alliance has the least canceled 8.5 voyages, totaling 44 voyages.

Of the total 553 scheduled sailings on major routes such as the Trans-Pacific, Trans-Atlantic, Asia -Northern Europe and Asia-Mediterranean, 57 sailings were cancelled between weeks 2 and 5, a cancellation rate of 10%. According to Drewry's data for this period, 58% of the blank sailings during this period will occur on the Trans-Pacific eastbound trade route, mainly to the US West Coast.

The end of the year is the peak period for e-commerce sellers to prepare for stocking, and various routes have frequently been suspended and port skipping. Matsun is the first choice for many sellers, but last week Matsun notified that the 19th ship was suspended, leaving only one ship before the New Year. Matsun's price quickly rebounded strongly from the 10 yuan range.

Matson suspends flights, sellers: wait for Matson to rise to the sky

Last week, Matson issued a notice of shipping schedule changes, disrupting many people's stocking plans.

Matson Lines said that the recent surge in global COVID-19 infections caused by the Omicron COVID-19 variant has made the already affected global supply chain situation even more severe. After the past two weeks of holidays in the United States, the number of positive cases has increased significantly, and there is an increasing shortage of dock workers at the Port of Los Angeles /Long Beach. It is expected that the shortage of dock workers will remain very serious in the coming weeks.

(Notice of change of Meisen shipping schedule)

Despite the advantages of a dedicated terminal, Matson still faces severe challenges. The previously uninterrupted weekly route from China to the United States has also been disrupted. Matson has adjusted its shipping schedule for the next few weeks:

Ningbo-Shanghai sailing schedule update in the next few weeks:

Kaimana Hila 033E will stop calling at China due to some reasons

Matson Molokai 020E will sail one week later due to delays caused by ongoing port congestion

Maunawili 220E berthed as planned, the ship schedule remains unchanged

Matson Molokai 020E berthed as planned, the sailing schedule remains unchanged

In addition, it is expected that the CLX and CLX+ routes will call at Shanghai and Ningbo as scheduled every week during the Chinese New Year holiday without stopping.

As soon as the news came out, freight forwarders rushed to inform customers. Sellers said that there were not many ships that could be dispatched before the New Year. There was only one ship on the 26th before the Spring Festival. Everyone was trying to catch the last ship of Matsushita, waiting for Matsushita to rise to the sky. One seller said: "I asked several companies, and they said there were no ships. Matsushita's price has risen to 30." The more objective time-limited quotation has also risen to 26.

A Shenzhen logistics company said that the price of Matsun has fallen in December, and there are quotations starting with 1 in the market. However, this week, it has no plans to accept Matsun because of the suspension of flights and the chaotic prices. "Some prices are extremely high, while others are still very cheap. However, there are only so many cabinets and so many spaces. Now we have to carry two weeks of cargo, and there will definitely be some that cannot be loaded in the end, and they will be left behind and shipped after the New Year."

In Ningbo, the epidemic has had a significant impact on sea freight shipments, but the epidemic has gradually eased this week. A local logistics company employee said: "Personally, I feel that most of the mainstream of Meisen is LCL from private warehouses in other places, and it is actually OK to enter the port. If the warehouse is in Beilun, the voyage was directly delayed last week." During the period when Beilun was under risk control, the logistics prices in Shanghai rose significantly.

For the last water ship of Matson before the New Year, the prices of the company's Matson scheduled ships above 100kg in the West Coast/Central/East Coast of the United States are 23.5/24.5/25.5 respectively.

A freight forwarder said earlier that a large number of general ships have stopped sailing, and the shipping prices will rise in the future. Since December, the prices of general ships have risen to 15/16/17. After the Matsun suspension, some people thought that general ships would be "full", but the total supply of transportation was tight before the New Year, and sellers were likely to pay for the high freight.

In Shenzhen, the development of the epidemic has also affected the delivery and daily work of many sellers. On January 11, Shenzhen reported 4 positive cases of new coronavirus infection. The relevant situation is as follows:

Case 5. Male, 51 years old, an employee of a company in Longgang District, living in Building 64, Hewei Village, Caopu West Community, Qingshuihe Street, Luohu District.

Case 6. Female, 72 years old, lives in Building 64, Hewei Village, Caopu West Community, Qingshuihe Street, Luohu District.

Case 7. Female, 77 years old, lives in Building 64, Hewei Village, Caopu West Community, Qingshuihe Street, Luohu District.

Case 8. Female, 27 years old, an employee of a company in Longgang District, living in Lane 5, Qiaolian East, Bantian Street, Longgang District, and a close contact of Case 2.

Logistics prices have risen ridiculously, and orders are so low that I doubt my life

The high logistics prices are due to the rush to stock up before the Spring Festival. As the holiday approaches, many cross-border sellers stock up to ensure sufficient inventory in their stores. Some sellers concentrate on shipping in the month before the New Year because they are afraid that the freight forwarders will take a holiday.

At this time, due to the sudden increase in demand, logistics prices remain high, and various pitfalls also arise, such as delays, container abandonment, etc. An industry insider summarized some precautions for shipments at the end of the year:

1. Never ship goods in the last two weeks before the New Year. It is common for companies to drop containers and delay shipping. No matter whether they are large or small, they cannot avoid this.

2. We will try to ship out all the goods before the 15th. Prices will skyrocket in the last two weeks, so much so that you will question your life.

3. In the last two weeks, the sellers will look for freight forwarders to ship the goods, instead of freight forwarders looking for sellers to ship the goods, so the service quality will be greatly reduced. Some freight forwarders will even raise the price sharply in order to receive the goods, thereby reducing the seller's profit.

Currently, another reason why sellers are in a hurry to ship products is that many products are out of stock. One seller said that he saw that the sellers at the top of the category were seriously out of stock and everyone was raising prices slightly.

However, the products that sell well have been receiving orders continuously, while the orders for most of the products that sell poorly have been declining sharply, especially after Christmas, when there has been a sharp downward trend. The sellers are hoping that the downward trend will be reversed in January and the sales will pick up. However, according to the feedback from most sellers, the orders are still declining.

One seller said, "I wonder if everyone will get COVID-19 after Christmas, and the orders have dropped a lot compared to the same period last year." Another seller said that this year's sales have fallen even more than last year. Even with more new products, the sales are still lower than last year. It is estimated that there are too many new sellers entering the market in 2021, and there is less cake to share.

There are also sellers who compared the order situation with specific data. They said that our data showed that orders in January this year decreased by 30% compared with last year, and there was no obvious recovery trend.

Just like the problems encountered by sellers, many Amazon sellers reported that their sales on Amazon were so low after Christmas that they doubted their lives. At first, everyone was able to remain calm, after all, it was just after Christmas, but by January, there was still no sign of improvement in orders, and their mental defenses were completely broken.

In this regard, an experienced seller analyzed that, except for a few seasonal categories, the overall market capacity has fallen after Christmas, which is a consumption trend. In the United States, it is the same whether online or offline. After Black Friday, Cyber ​​Monday, and Christmas promotions, the overall market capacity has fallen and will not recover soon. Even if there was no epidemic in previous years, the entire market capacity would have fallen after Christmas. This is the real consumption trend.

A seller in the accessories category said that sales began to decline after Christmas, and fell even more sharply on New Year's Day. Current sales are even lower than those in May and June. Looking at the category rankings of several main products, the category rankings have increased, but the number of orders has declined, so the market has cooled down.

An old seller compared the categories and came to the conclusion: From the perspective of categories, perhaps because of the strong demand for some categories, the impact was not obvious and the trend of the peak season continued; but most categories were not so lucky. Currently, they are in a continuous decline and the situation is terrible. Some sellers even joked that they would go home to raise pigs or go to Shenzhen Bay to pick up mineral water bottles.

Based on past consumption trends, some veteran sellers have summarized a pattern: there are fewer orders in January, and February may be even less than January. The situation will gradually improve in March or April.

In fact, many sellers are aware that this period is the off-season for sales. The reason why they are so focused on orders is that they are more worried about the business for the whole year of 2022.

The "cake" is reduced, and sellers need to prepare stocks carefully before the festival

In view of the current decline in orders, experienced people have given suggestions for coping. Combined with the current situation, we should pay more attention to stocking up at this time. If we stock up too much, it will definitely be uncomfortable. If we stock up too little, the pressure will not be too great. There are so few cakes in a short time, and no matter how hard we try, we can only eat so much.

As the market pie shrinks, the top sellers will have less to eat, leaving even less for the waist and tail. Sellers need to consider this deeply when preparing their stock.

The grand scene of sellers preparing goods before the Spring Festival in previous years is still vivid in our memory. At that time, due to the surge in shipments, the Yantian Port was seriously congested and almost paralyzed. Many cross-border sellers stayed up all night to queue up, and some even queued up to more than 2,000 and were unable to enter the warehouse for several days. In order to ease the congestion, the Yantian Traffic Police Brigade also adopted temporary traffic control.

The recent Shenzhen epidemic has caused sellers who were preparing for the end of the year to panic, resulting in a mentality of preparing for the peak season. However, considering the current overall market industry, sellers need to be cautious in preparing for the peak season. After all, some sellers who were preparing for the peak season are still clearing their inventory, and some are exhausted by the storage fees during the peak season.

It is understood that the December storage fees have been released recently , and some sellers were shocked. How many people have been working for Amazon during the peak season?

One seller said that he had been overstocked throughout the fourth quarter, and the excess storage fee was more than 200,000 RMB. Another seller lamented: Amazon has started to deduct storage fees for December again . I just received the payment a few days ago, and the balance in my account is almost not enough to cover the deduction!

Previously, some Amazon sellers stated that storage fees during the peak season account for a high proportion of sales. Some sellers have to pay excess fees of 7,000 yuan every half a month , and some sellers have to pay monthly excess fees of up to 180,000 yuan.

The fees of overseas warehouses are also a headache for sellers. One old seller said that he had a lot of goods piled up in the UK overseas warehouse, and the storage fees were unbearable. He planned to destroy them directly, and he couldn't find a way to clear the inventory offline. Other sellers felt the same way. There were a lot of goods in the overseas warehouse, and the storage fees were too expensive.

As one of my colleagues lamented: Every time I step into a pit, it is to stand up better! Considering the backlog of inventory and high storage fees, sellers must rationally prepare goods based on sales and market conditions. Don't blindly follow others in shipping large quantities before the Spring Festival.

Freight rates will remain high in 2022, and congestion and chaos may continue

As far as the market environment is concerned, the epidemic in the United States is still in dire straits. As of 6:21 am Beijing time on January 11, 2022, the cumulative number of confirmed cases of COVID-19 in the United States has reached 61,136,962, and the cumulative number of deaths has reached 838,962. In the past 24 hours or so, the United States has added 1,074,885 new confirmed cases and 1,458 new deaths.

With the arrival of the year-end and New Year holidays, coupled with the accelerated spread of the Omicron strain, the epidemic in the United States is surging. More than 1 million new confirmed cases were reported in a single day . Something that we can hardly imagine is happening in the United States.

Previous reports have said that the impact of the epidemic on consumer behavior is rapid and huge: more than 40% of Americans said that household spending has decreased, and consumers have begun to shop differently from before. Under the epidemic, American middle-class consumption began to decline, and they lost fixed spending, thus affecting their overall consumption capacity.

Domestic sellers feel this deeply. Some Amazon sellers have observed that some Americans may really be out of money. Specifically, the sales of some high-value products are cooling down, while lower-priced products are becoming more and more popular.

When asked about the reasons for the recent decline in orders, some sellers believe that it has a lot to do with price. One seller said frankly that the decline in orders was mainly due to price adjustments. Due to the sharp increase in freight costs this year, profits were pitifully low, and the boss issued a death order to increase the price of each product by nearly 20%, resulting in a sharp decline in orders.

Another seller said that the epidemic in the United States is rebounding, with the number of confirmed cases increasing by as much as 1 million per day , which will have a certain impact on orders. In addition, the price of logistics and delivery will increase again in the future. For the sake of profit, sellers may need to raise prices.

Obviously, the epidemic is affecting the business of cross-border sellers from two aspects: consumption and logistics. At present, the ongoing COVID-19 situation is a great challenge to logistics and transportation. On the one hand, the demand for freight before the holiday is strong, and the freight volume will remain at a high level. On the other hand, the global epidemic will still have a certain impact on the supply chain. At present, the capacity of the container industry is still limited, and port congestion has also greatly reduced the efficiency of ship capacity turnover.

According to data from the Southern California Marine Exchange, there were 105 container ships waiting at the ports of Los Angeles and Long Beach last Thursday , setting a new record. Of these, 16 were parked in port waters and 89 were lingering or sailing slowly in designated areas. According to ship positioning data from Marine Traffic, most of these ships gathered near the Baja Peninsula.

Today, the number of container ships waiting at the ports of Los Angeles and Long Beach is more than three times that of the same period last year, 11.6 times that of June 24 last year , and 31% more than that of October 24 last year.

Even more frightening is that the COVID-19 positive diagnosis rate for dock workers and office workers at the ports of Los Angeles and Long Beach is rising rapidly. About 150 dock workers on the West Coast were tested recently , of which about 100 were positive, with a positive rate of almost 67%. About 80% of the positive cases were in Southern California, and the positive diagnosis rate has been rising day by day since then. The congestion at the West Coast ports is undoubtedly adding insult to injury.

Due to the epidemic situation at the destination port in the United States, the ships were unable to return in time, so some ships were suspended. When the suspension of voyages coincided with a large number of shipments before the Spring Festival, the entire US line continued to be tight, and the market demand and space supply and demand were seriously unbalanced, and freight rates will usher in another wave of increases.

Based on the current logistics situation, logistics practitioners in the industry analyzed that freight rates will most likely remain high in 2022, and it is certain that congestion and chaos will continue.

Stocking

Ocean Freight

Price increase