Rising again and again! Air freight prices may exceed 110 yuan/KG, Amazon warehouse outages intensify

Shanghai Airport canceled a large number of flights, and American airlines also canceled a large number of flights, causing air freight prices to rise sharply . DHL and other companies are also adjusting the emergency surcharge (ESS), which adds another cost to sellers. "Last year's freight could only pay the down payment for Pingxiang, but this year's freight can pay the down payment for Guangzhou," Amazon sellers joked helplessly.

ZIM, China Shipping and others responded to the port detention fees. The third quarter financial reports of these shipping companies have been released, and they all made a lot of money. Freight is often expensive and the logistics experience is poor during the peak season. In addition, Amazon’s warehouses are overwhelmed and the warehouses are too divided, so sellers are complaining. Many freight forwarders also said that the capital chain is tight this year and the pressure of advance payment is unprecedented.

Shanghai Airport cancels a large number of flights, air freight prices rise again

According to Yien.com, recently, several freight forwarders issued notices saying that because the 4th China International Import Expo will be held in Shanghai from November 5 to 10, the East China Administration has decided not to allow new cargo flights in Pudong, so a large number of flights have been cancelled. In addition, according to feedback from the East China Administration, due to the impact of the Shanghai International Import Expo, no passenger-to-cargo flights will be approved before November 13.

A freight forwarder also notified that due to this impact, all air freight rates in mainland China and Hong Kong will skyrocket from November, and may very likely exceed the historical high point in May last year. We have already received price increase news from several airlines , so sellers should pay attention to adjusting their shipping plans.

Since all passenger-to-cargo flights before November 13 will not be approved, passenger-to-cargo charter flights previously signed with airlines will face the risk of cancellation. A freight forwarder said: "From the current situation, the impact of flight cancellations on air transportation is too great. Not only will prices rise, but it will also cause a backlog of cargo."

The logistics situation this year has not been very optimistic. The price of sea freight has soared, and the delivery time cannot be guaranteed. In addition to sea freight, the delivery time of railways will also be delayed. Nowadays, a large number of flights have been cancelled, resulting in a surge in the price of air freight.

The editor interviewed a freight forwarder, who said: "Recently, the price of air freight has skyrocketed, flights have been reduced, and passenger-to-cargo conversions have been canceled. Now the price of air freight to the US is already 80 or 90 yuan, and some have exceeded 90 yuan/kg. The price of express delivery is around 80 yuan/kg. "

Regarding timeliness, he also said: "For express delivery, there will be delays in queuing warehouses and flights, and for air transport, there will be delays in pulling goods and at the end."

In fact, many freight forwarders have stated that the prices of air freight and express delivery have been rising recently, from more than 60 yuan before to more than 80 yuan now.

With the price increase and time delay, air freight has also fallen, and it just happened to be the peak season. If sellers are in urgent need of replenishing stocks, they can only use air freight at a high price. Previously, industry insiders said that this year's air freight price may exceed the historical high point in May last year , which is 110 yuan/kg. If the air freight price really reaches 110 yuan/kg, perhaps sellers will not dare to send air freight...

The editor also interviewed a seller on Amazon US, who said: "I usually ship by sea and express, but mainly by express. The price of air freight has skyrocketed recently, and the cost of express delivery has also increased significantly, but even if the cost becomes higher, I have to send it, because I can't run out of stock..."

Now is the peak season. In order to catch up with the big promotion, if sellers need to replenish stock, they can only send it by express delivery or air transportation.

In addition, a freight forwarder issued a notice stating that starting from November 12, the Hong Kong government required all aircraft crew members to undergo 21 days of quarantine, and the cabin space will only become less and less, and this situation is expected to last until the end of November. In addition, the US Customs Los Angeles Port is overloaded recently, and the goods will be transferred to air transportation and express delivery, which will also cause time delays.

In addition to the cancellation of flights at Shanghai Airport, American Airlines also canceled a large number of flights. "Due to the large number of flight cancellations, air transport time will be delayed and prices will rise accordingly." Several freight forwarders said that it is understood that on November 1, local time in the United States, American Airlines announced that it would cancel another 262 flights, accounting for 5% of the planned operations that day; the day before, that is, October 31, American Airlines said that it would cancel 634 flights that day, accounting for more than 12% of the total operations that day. Since October 29, due to weather problems and staff shortages under the new crown epidemic, American Airlines has canceled 2,211 flights.

The disruptions come after American Airlines said it was hit hard by staffing shortages, with airlines unable to find enough flight crews and cabin crew as they added flights ahead of the peak holiday season.

Amazon warehouse explosion, sellers complain that warehouse division is too serious

As the peak season approaches, Amazon’s warehouse overflow problem is also intensifying.

Recently, a freight forwarder said that Amazon's BHX4 warehouse is seriously overwhelmed ↓↓↓

Please note that according to official confirmation from the UK DPD, due to the overflow of Amazon BHX4 warehouse , there will be varying degrees of delays in delivery. It can be confirmed that due to the unprecedented high demand, Amazon fulfillment centers are experiencing severe delays in processing packages .

Many Amazon sellers have already felt the signs of warehouse explosion. " In the past , all goods were sent to ONT8, but now they are not only sent to warehouses, but also to remote warehouses . We can't leave even if we send goods overseas, so we have to send goods overseas." It is reported that due to the serious warehouse explosion on Amazon, warehouse division and slow listing can now be seen everywhere:

A: Don’t you have separate warehouses for standard parts now ? I built three warehouses for two consecutive days .

B: It was a margin call. It happened to me too. I deleted and rebuilt it several times, but was still split .

C: We never had separate warehouses before, but now any shipment will be divided into three warehouses, and they are all in remote warehouses.

D: I have experienced that 6 boxes of goods were divided into 6 addresses, and I have set up a warehouse consolidation service .

E: ONT 8 is so slow to be put on the shelves . Both batches of goods are so slow that I even suspect they are lost.

F: There is a shipment of goods that has been here for almost two weeks and the warehouse has not registered it yet...

G: KRB4 warehouse is such a bummer. I sent out a ticket in September, and it arrived at Amazon on the 20th of last month. Now it’s been almost half a month and not a single item has been put on the shelves.

It is reported that Amazon's internet celebrity warehouses will be in a state of overstocking throughout the year . Sellers assigned to the internet celebrity warehouses often encounter situations where the goods are not put on the shelves , signed for or assigned to the warehouses. During the peak season, some non-internet celebrity warehouses will also join the army of overstocking, and the signing and warehousing will be at a snail's pace.

DHL adjusts Emergency Situation Surcharge (ESS)

YEN.com learned that as market conditions are constantly changing with the continued development of the epidemic, DHL will adjust the billing amount of the Emergency Situation Surcharge (ESS) from November 7, 2021.

DHL said that this adjustment reflects the ever-changing market environment, air transport capacity and prevention and control measures in various places. We will adjust the charges for the following origin/destination combinations.

- From mainland China and Hong Kong, China to the Americas : from RMB 7 per kilogram to RMB 16 per kilogram ;

- From mainland China and Hong Kong, China to Europe : from RMB 7 per kilogram to RMB 9 per kilogram ;

- From Europe, America and other countries to Australia and New Zealand : From RMB 2 per kilogram to RMB 16 per kilogram .

In addition to adjusting the emergency surcharge, DHL has also temporarily limited the volume. Yien.com learned that DHL issued a notice last month saying: "Due to recent severe weather conditions, including typhoons in southern China and Hong Kong last week, coupled with a surge in cargo volume after the Chinese holiday, our normal and efficient freight handling levels have been affected. As a result, we are currently experiencing production backlogs in certain key areas in the region.

In order to clear the current backlog we need to implement a temporary weight limit of 100kg per day for each pick-up (customer collection) from China and Hong Kong to all destinations . This temporary limit applies from Monday 25 October to Wednesday 11 November. ”

Sellers and freight forwarders trapped by logistics

" Express freight rates in the United States have stabilized at 80 yuan/KG, and those in Europe are moving towards 80 yuan/KG , " said a freight forwarder. The large price increase and high prices have prevented many goods from being shipped, and the company is even facing a situation where foreign customers would rather not pay the deposit than cancel their orders .

"It's so annoying. Due to the rising international shipping costs, the two high containers of goods originally ordered by the British buyer cannot be shipped. The goods were ready but they did this. " A foreign trade person said that the rising freight costs and raw materials are forcing us to increase the prices of our exported goods, but our products cannot be increased in price because no one will buy them even if the prices are increased, which means that small and medium-sized enterprises will lose their source of income. Currently, foreign trade buyers and sellers are caught in a painful tug-of-war.

According to a research report by CITIC Securities, some carriers on the US route announced an increase in FAK freight rates on November 1; some carriers on the Europe-Europe route announced an increase in freight rates for the first half of November, with the increase on the Europe route ranging from 200 to 800 USD/TEU. The supply of shipping space is tight, and there is a large gap between the quotations of shipping companies and freight forwarders, so there is ample room for shipping companies to increase freight rates.

Many cross-border sellers are also driven crazy by shipping costs.

A cross-border seller said that he was most afraid that the freight forwarder would suddenly contact him and tell him that the price had increased again . Last year's freight was only enough to pay for a down payment to Pingxiang , but this year's freight is enough to pay for a down payment to Guangzhou . Why is the freight more expensive the more it is regulated ? "This year's freight has been rising. Compared with the same period last year, it has almost increased by half. " An eBay seller complained bitterly.

A freight forwarder said that although the freight rates have increased several times, the money has basically been earned by the shipping companies. For FBA freight forwarders like us, the profit is basically fixed regardless of the freight rates. It is not ruled out that some companies in the industry will take advantage of the chaos to quote high prices. However, the price of containers has skyrocketed, and the money we have to pay has also increased several times compared to the past, but it is still difficult to get a container .

It is reported that since the outbreak, the net profits of several major shipping companies have started to take off. COSCO Shipping Holdings achieved operating income of 92.21 billion yuan in the third quarter , a year-on-year increase of 111.23%; the net profit attributable to shareholders of listed companies was 30.49 billion yuan, a year-on-year increase of 1019.81%. In the first three quarters, the operating income was 231.479 billion yuan, a year-on-year increase of 96.65%; the net profit attributable to shareholders of listed companies was 67.59 billion yuan, a year-on-year increase of 1650.97%.

Maersk's third-quarter operating income also reached $16.6 billion, a year-on-year increase of 68%. Earnings before interest and taxes (EBIT) increased nearly fivefold to $5.9 billion. In the shipping business, benefiting from high freight rates, operating income almost doubled from $7.1 billion to $13.1 billion. EBIT increased by $4.4 billion to $5.3 billion. EBITDA also increased by $4.4 billion to $6.3 billion.

As freight rates skyrocket , freight forwarders’ advance payment costs will also be very high.

A freight forwarder said that from 2016 to 2019 , one of his agents could owe 5 million yuan a month , and with the other agents , he could owe 1 million yuan. Since the outbreak of the epidemic in 2020, freight rates have continued to rise, all accounts have been cancelled, and this year's big sellers have been blocked one after another. Aviation agents have re-examined their cash flow. Airlines and shipping companies with positions have become the bosses. If the east party doesn't come, the west party will come. The market lacks positions, so the original triangular debt chain has been cancelled. This year's capital chain is particularly tight . Assuming that we receive 15 tons of express delivery every day , the capital turnover on that day will exceed 1 million yuan. " So this year many old customers will say that they have supported you for so many years in vain, which is too ruthless. We have no choice but to settle in cash. We can negotiate a lower price and a thinner profit. It's not easy for freight forwarders and sellers. "

Although the shipping price has fallen, the recent incident of scalpers driving up the price of Meisen's cabinets to 60,000 US dollars still frightened cross-border sellers who have seen the world. One seller also launched an initiative to boycott Meisen. The following is the original text of the initiative:

Calling all Amazon sellers :

This week, scalpers have gone too far, driving up the price of Mason's cabinets to 60,000 US dollars! It's too much! I urge everyone to send less or no Mason as much as possible, and bring down the price of Mason! And from my personal experience, recently Mason's overtime ship takes more than a month to sign for, why spend a lot of money on Mason, when the time is the same as that of ordinary ships ! Don't waste your money! This year is not easy for sellers, let's jointly boycott scalpers of Mason EXX and other fast ships, don't send Mason/EXX if you can, and send less if you really can't. Let's arrange the delivery ratio reasonably and reduce the quantity of goods (let's stick to it for a week or two). I don't believe that the price of Mason/EXX will not come down, and I don't believe that scalpers dare to resell cabinets! With unity and concerted efforts, let's jointly fight against Mason EXX and other fast ships, bring down the price, and establish everyone's living space for the long-term development of cross-border e-commerce sellers. I hope that all sellers will do their best and forward it to each other. If we gather more strength, we sellers will be stronger!

The Ports of Los Angeles and Long Beach are at the bottom of the list of global ports in terms of operating efficiency.

The United States is not having a good time now either.

The supply chain dilemma has dealt a heavy blow to the U.S. economy. The U.S. is facing the most severe supply shortage in nearly 50 years . Relevant statistics show that the number of times the word "shortage" appears in the Beige Book report released by the Federal Reserve has reached the highest level since the early 1970s. Since the spring of this year, the word "shortage" has been mentioned more and more frequently in the Beige Book and has become a key word for the Federal Reserve.

On the one hand, factories are waiting for raw materials and parts for production, and on the other hand, there are still about $24 billion (about 153.6 billion yuan) worth of goods on container ships outside the ports of Los Angeles and Long Beach that cannot be unloaded. In addition, commodities such as automobiles, food, and gasoline are also facing greater inflationary pressure.

The Port of Los Angeles and the Port of Long Beach are the two busiest ports in the United States , but according to a recent ranking by the World Bank, the operating efficiency of these two ports is at the bottom of the global ports. Reuters reported that the United States is known as the world's largest consumer market, but its infrastructure construction, including seaports, is seriously lagging behind and does not match its huge domestic import demand.

" I have to give a lot of praise to the Americans for their logistics speed . It's really fast . If I were to ride a tricycle to deliver the goods, it should have arrived by now . "   A cross-border seller said with regret.

US ports impose overdue detention fees, and a large number of containers will be fined

Ocean shipping has always been a problem. In addition to the frequent price fluctuations, the long delivery time also makes many sellers suffer ...

According to the report of the Southern California Marine Exchange, there were 158 ships in the Port of Los Angeles / Long Beach on November 2 , local time in the United States , including 104 ships that had dropped anchor and 59 ships that had been moored. Among these 158 ships, 102 were container ships, of which 77 had dropped anchor and 25 had been moored. Among the 52 ships that had dropped anchor, there were 44 container ships , 2 tankers , 5 bulk carriers and 1 general cargo ship.

Port congestion is already the norm, but now the Ports of Los Angeles and Long Beach are also charging overdue detention fees.

According to the latest reports from foreign media, there are still a large number of containers stranded at the port. Gene Seroka, executive director of the Port of Los Angeles , said that there are 84,000 containers waiting to be transported at the dock, an increase of 3,000 from a week ago. Of these 84,000 containers, as many as 40,000 containers have stayed at the Port of Los Angeles for more than 9 days.

Since last Wednesday, 10% of the 27,000 stranded containers at the Port of Long Beach have been moved, and the port has been fined about 18,900 containers. "This shows that the surcharges are having the desired effect," said Noel Hacegaba , chief operating officer of the Port of Long Beach .

The problem facing these containers stranded at the port is now - either move them away or face a fine of $100 per day, which will increase by $100 every day.

It can be seen that the collection of port congestion detention fees will indeed reduce the number of containers stranded at ports, but this is not good news for sellers and logistics companies. One seller said: "At present, if you want to ship by sea, you can only use the regular ship of Matsushita or the time-limited delivery . Otherwise, the time limit is far away. Now the US ports have added port congestion detention fees. Isn't this asking for a sky-high price? I'd better use Matsushita. "

It is understood that in order to avoid detention fees incurred after the implementation of new regulations in the ports of Los Angeles and Long Beach, ZIM Shipping established an emergency container collection team and conducted friendly negotiations with WBCT Terminal. In the end, the two sides reached a consensus on the solution:

1. With the cooperation of WBCT Terminal, our company accelerated the removal of all containers in the closed area of ​​WBCT Terminal to the open area, and sought the support of customers to speed up the collection of containers.

2. Our company will publish a list of available cabinets every day. Please contact your exclusive ZEX salesperson.

3. If you pick up the container before November 15, no container overstay fee will be incurred.

In addition to ZIM, COSCO Shipping , Maersk, and ONE have all responded to the policy of levying "container overstay fees" at the Port of Los Angeles /Long Beach .

COSCO Shipping said that once we learn the details of the collection from the port authorities , such as specific collection rules, billing date, etc., we will contact and notify you in a timely manner.

ONE said it is still discussing the implementation of the new policy with ports and relevant parties, but details such as how the fees will be charged have not yet been determined. ONE also encourages customers who plan to deliver goods locally to transfer containers to inland railway locations.

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