The price of ocean freight will continue to rise next week!

The tide of logistics price increases continues!

As early as April, news about freight price increases was flying all over the place. Now this wave of price increases not only shows no signs of abating, but is getting more and more intense. People familiar with the matter revealed that the wave of shipping prices in Europe and the United States will increase again in mid-May.

A British freight forwarder said that the tense situation in Asia-Europe shipping is even as tense as during the peak of the epidemic.

At the same time, chaos in cross-border logistics continues to occur. In addition to the old-fashioned problem of freight forwarders running away, the problems of leaked accounts and fake waybills that caused a sensation last year still exist. A Chinese freight forwarder boss used fake waybills to evade freight costs of more than 1.08 billion yuan and faces up to 25 years in prison.

Ocean freight prices soar! Large container freight is approaching $10,000

Before the May Day holiday, major shipping companies such as MSC, Maersk, CMA CGM, and Hapag-Lloyd have issued notices of price increases such as levying peak season surcharges. Among them, the price increase for CMA CGM and Hapag-Lloyd will take effect on May 15, 2024. CMA CGM said it would increase the FAK price for routes from Asia to Northern Europe, with a small cabinet of US$2,700 and a large cabinet of US$5,000; Hapag-Lloyd will also increase the FAK rate between the Far East and Northern Europe and the Mediterranean, with a 20-foot dry container price increase of US$550 and a 40-foot dry container including high cabinets and refrigerated containers increased by US$1,100. HMM will implement the new GRI for services from all origins to the United States, Canada, and Mexico from June 1, 2024.

Several freight forwarders told me that starting from May 1 , shipping companies on European and American routes collectively pushed for price increases. A new round of price increases will come in mid-May, with 1-2 rounds of price increases every week. The price increase is very large. What's even more exaggerated is that the freight quotes of some shipping companies are adjusted about every 48 hours , just like riding a rocket ! The tight shipping space situation is evident.

Corresponding to this is the explosion of the A-share shipping sector. According to news on May 9, the main contract of European container shipping rose by more than 12% during the day, reaching a high of 3509.9, setting a new record. Phoenix Shipping and COSCO Shipping Development hit the daily limit, and COSCO Shipping Holdings rose by more than 9%, with its share price hitting a new high since March 2022.

The price increase of Asia-Europe shipping has even reappeared the tense situation at the peak of the epidemic. In addition to Europe and the United States, routes in other regions such as the Mediterranean and Africa are also plagued by price increases. Among them, the freight rate from Asia to Latin America has reached US $9,000 to US$10,000 per 40 feet.

While the price of ocean freight has increased, there are also cases of tight space, overbooking, and container abandonment. In the past two weeks, there have been continuous container abandonment on general ships and general cabins in the United States, and all freight forwarders cannot avoid it. Now to ensure space, you have to increase the price. Although the larger freight forwarders have contract prices with shipping companies, the contract prices are "price guarantee but not space guarantee", that is, there is a price but no space, and there is a price but no market. Therefore, if you want to ship, you have to accept the price increase and spend money to guarantee space and containers.

How long will this wave of price increases last? Industry insiders believe that since many shipping companies have closed the FAK and spot space booking mechanism and will not reopen until June or later, prices will remain high in the short term, and the peak sales season in the second half of the year is approaching, so European and American shipping prices may not fall until the end of the year.

Now is not the peak season for cross-border e-commerce sales, so what is the reason for the price increase? Pessimistic forecasts of the overall environment, sellers' continuous and stable shipment demand, and shipping companies ' "human" factors are considered to be the main reasons for the increase in freight rates.

Under the influence of geopolitical conflicts , there are objective problems such as container shortages and reduced shipping company capacity. It is understood that many ships on the European route are still detouring around Africa, which will undoubtedly extend the voyage and cause more ships to be stranded at transshipment ports, resulting in container shortages. Maersk claims that the entire industry's capacity from the Far East to Northern Europe and the Mediterranean market will lose 15-20% in the second quarter.

"There are many reasons for the increase in freight rates, but the main problem still lies with the shipping companies. Shipping companies take advantage of the existing problems and tacitly regard them as the best excuse to raise prices," said a freight forwarder. Now is not the peak sales season, but there are still many sellers with shipping needs every month. Shipping companies are having a hard time right now, so they are raising prices together, mainly by cutting capacity and reducing space. Sellers have to pay higher freight rates to grab limited space. In this way, shipping companies can successfully meet their price increase demands.

An industry insider complained that the current crazy situation in the shipping market was even comparable to that during the epidemic, and whoever had a contract could buy a Porsche. However, most freight forwarders said that in the end, it was the shipping companies that made money.

Logistics chaos continues! USPS is launching another sweep of fraudulent accounts

Ocean freight prices remain high and cross-border logistics chaos still exists.

As we all know, the competition among freight forwarders is extremely fierce. Under the fixed market delivery demand, in order to grab more sources of goods, freight forwarders either win by high-quality services or have a very cost-effective advantage. Some freight forwarders without competitive advantages often choose to attract sellers by extremely low prices. However, there are pitfalls behind the low prices, and sellers often have to pay greater economic losses after problems break out.

Some time ago, there was news that the leaking accounts had "revive". Under the strict investigation of UPS in Hong Kong, 25 problematic accounts were found, including some "Super Rabbit accounts" with high permissions. Under the influence of these problematic accounts, 100 tons of goods were detained.

According to people familiar with the matter, the USPS will launch another sweep of fraudulent accounts around June this year, and a large number of irregular freight forwarders will inevitably be eliminated. "The Postal Service and the Postal Inspection Service will continue to implement expanded measures to maintain the level of security that Postal Service customers expect and deserve," a USPS official said recently.

In 2023, UPS, USPS and other companies strictly investigated illegal logistics operations such as account leakage, stealing area and weight. Once found to be in violation, the logistics company would be required to pay the freight or downgrade the discount. In serious cases, the logistics company would be prosecuted and the delivery warehouse address would be blacklisted. During this period, a major incident that shocked the industry occurred.

A Chinese couple (the woman is Chen Lijuan, and the man is Hu Chuanhua) runs a logistics company in the United States, providing transportation services to Chinese logistics companies through the United States Postal Service. In order to reduce postage costs, they print duplicate and forged online stamps (stamps that can be purchased online from third-party suppliers and printed on self-adhesive paper) to create false and counterfeit postage to deliver packages. From November 2019 to May 2023, they used fake mailing lists to smuggle up to 34 million packages, directly defrauding the United States Postal Service of $150 million in shipping fees (equivalent to RMB 1.082 billion)

After being detained in the United States for nearly a year, Chen Lijuan recently admitted her guilt for the first time. As part of the plea agreement, Chen agreed to law enforcement agencies to confiscate bank accounts, insurance policies and multiple properties. Hu Chuanhua was charged with multiple crimes including counterfeiting and making fake stamps. If each charge is based on a maximum federal prison sentence of 5 years, Hu Chuanhua will be sentenced to up to 25 years in prison.

Whether it is the high logistics prices or logistics chaos such as account leakage, they are all closely related to the seller's delivery plan. Sellers need to pay attention to the latest news in a timely manner and make good plans.

logistics