Freight rates have increased for ten consecutive times, with the price quoted for the US West Coast route jumping to US$32,000!

One seller lamented: “Amazon has tortured me to death this year.”

Amazon's successive actions in the first half of the year have indeed made sellers tired. Fortunately, it is now July and the peak sales season for cross-border e-commerce will soon arrive.

However, as sellers are actively preparing for the peak season, they also have to face some practical problems, such as transportation and inventory pressure, as well as the continued rise in freight rates.

Amazon suppliers order holiday products early amid shipping pressure

Customs statistics show that in the first five months of this year, China's exports reached 8.04 trillion yuan (1.24 trillion U.S. dollars), a year-on-year increase of 30.1% and an increase of 23.6% over the same period in 2019.

       Ocean freight usually carries 95% of China's foreign trade goods. But while export demand is growing, ocean freight capacity is falling sharply.

       Since last year, due to the impact of the epidemic in Europe and the United States, the return of empty containers has been very slow, and the congestion in the Suez Canal has made the situation even worse. Recently, due to the impact of the epidemic in Guangdong, Yantian Port has a serious backlog and the shortage of empty containers has been further exacerbated.

       Although the shortage of empty containers at major domestic ports has dropped to 1.3% after China increased container production, the problem of difficulty in finding a warehouse or a container still exists.

       Reuters reported that in response to severe freight pressure, suppliers of Amazon, Walmart and other major European and American retailers have begun ordering Christmas shopping season gifts made in China earlier.

Their advance preparation is wise. Reuters surveyed more than a dozen suppliers and retailers in the United States and Europe. All said that holiday inventory will be delayed for several weeks due to global container shortages and backlogs at Yantian Port. By then, their inventory will be at risk of being out of stock.

Isaac Larian, a seller of toys on Amazon , said hundreds of containers filled with his company's products are stuck at Yantian Port. "If there is not enough inventory, it will seriously affect Christmas sales," Larian said.

Yantian is considered Amazon's No. 1 seaport in China, accounting for 32.4% of all goods handled by Amazon in the three months ended May 31, according to S&P Global Market Intelligence data.

Although Yantian Port reopened on June 24, a shortage of containers still constrains overall port activities, with global cargo ships overbooked, containers stranded in the wrong places, and the port overcrowded .

Tight shipping capacity pushes up ocean freight prices, with US West Coast prices jumping to $32,000

Shipping industry executives expect that shipping capacity will remain tight in the second half of this year. Tight capacity continues to push up freight rates. Shippers are competing to raise prices in order to obtain space.

The average global freight rate for a 40-foot container was more than four times higher than a year earlier at $8,399 as of July 1, according to London-based Drewry Shipping Consultants’ global freight rate index, which has surged 53.5% since the first week of May.

According to Drewry's freight rate reference, the listed freight rate from China to major ports in Europe and the west coast of the United States is close to US$12,000 per container, while some companies said that in order to get the goods on the outbound ships, they reached a last-minute agreement on freight rates as high as US$20,000.

Even more exaggerated, Craig Grossgart, senior vice president of global ocean shipping at Seko Logistics, confirmed that last week a shipper quoted $32,000 for a 40-foot container from Shanghai to Los Angeles .

Moreover, the Shanghai Shipping Exchange and the Baltic Freight Indices show that freight rates from Shanghai, China to Europe have been rising continuously for the past 10 weeks.

Moreover, with the coming of the peak season, shipping companies have begun to levy peak season surcharges. For example, Maersk announced on June 30 that it will levy peak season surcharges on dry containers from the Far East to Northern Europe and the Mediterranean starting from July 15. In addition, with the additional costs such as fuel costs and warehouse purchase fees, the overall freight rates will be further raised.

The continuous increase in freight costs will eventually affect the sellers. Faced with the soaring sea freight prices, some sellers said that at this price, air freight or express delivery would be about the same, so why should they ship by sea? Some sellers simply lied down and said: "We have gone bankrupt, it doesn't matter, just raise the price to 100,000 per cabinet."

Hard costs are soaring, choose Wanlihui to protect profits

Not only the transportation costs, but under the existing shipping restriction policy, seasonal peak-season products can only be transferred through overseas warehouses, and storage fees are another huge cost for sellers.

Under these hard expenditure restrictions, sellers' profits during the peak season are greatly reduced. So how can they better protect their profits? The editor learned that the "310 model" and series of activities recently launched by WorldFirst can help sellers protect their profits.

Among them, "3" means the fee is capped at 3,000. The more the seller withdraws, the lower the fee is, which is suitable for use in the peak season when the amount of funds is large. And it can withdraw money to Alipay and bank cards, and the fastest time is 1 minute. At the same time, the exchange rate is transparent and there is no exchange loss. In addition, WorldFirst has also joined hands with Cdiscount, eMag, Fruugo, Mercado Libre, Tophatter, Wayfair and other six major e-commerce platforms to provide sellers with free handling fees, store opening benefits and other gifts.

Recently, Wanlihui has promoted the "310 model" to many parks in Shenzhen where cross-border e-commerce sellers gather. It has appeared in Bantian International Center, South China City, Zhantao Technology Building, and Zhihuigu Innovation Park Bantian Branch.

Not only in the cross-border circle, WorldFirst has also recently appeared in international competitions.

Sellers who follow the European Cup must have noticed that when Schick scored the longest goal in the history of the European Cup with a 45.4-meter overhead kick, the red billboard of WorldFirst was lit up on the electronic fence beside the green field. "WorldFirst's World Wave" became an instant hit. Subsequently, "WorldFirst's World Wave" appeared on the green field many times, and WorldFirst successfully "went out of the circle" through the 2020 European Cup.

"Use Wanlihui for cross-border payment and exchange" With the popularity of "Wanli World Wave", this slogan has been deeply imprinted in the minds of hundreds of millions of football fans. In the above-mentioned office buildings and parks, this slogan that shone during the European Cup also appeared again.

It is worth mentioning that WorldFirst, which shined in the European Cup , also launched a special welfare activity of "collect likes to get limited edition football or European Cup keychain". That is, from July 8 to 9, as long as the seller finds the advertisement of WorldFirst in the park and takes a photo to send to Moments, collects 38 likes, sends a screenshot, and can receive it. In chronological order, the first 10 sellers who complete it every day will receive a limited edition moneyball of WorldFirst European Cup, and the first 11-30 sellers who complete it will receive a limited edition keychain of European Cup. (Add Wan Zhanggui v: worldfirstwan to receive it, each seller has only one chance to participate)

To learn more about the "310 Model" of WorldFirst and more event details, please click https://www.worldfirst.com.cn/static/activity/source/campaign-20210501/?ID=7381&utm_source=banner_in_sellerzone_homepage&utm_campaign=campaign-20210621

Cross-border e-commerce sales peak season

Ocean Freight