General

Recently, Shishi City Logistics Industry Association issued a "Letter of Notification" to shipping companies such as COSCO Shipping, Antong, Zhonggu, Tradewind, Yuzhou Shipping, Gaogang Shipping, and Ningbo Ocean Shipping that call at Quanzhou Port. Said that under the circumstance that the existing freight rate has not been increased, all the fleets have reported to the association to prepare to stop work on June 3, 2021 (Thursday).

This letter of notification is very brief, but it has a lot of information. Let’s try to analyze the contents one by one:

Notification letter?

Why does the container fleet want to increase the price, but send a letter of notification to the shipping company through the industry association?

This is because the domestic trade transportation mode is mainly door-to-door, that is, the starting place arranges the trailer to pull the container for loading, then arranges the space for ship transportation, and finally arranges the trailer to deliver the container to the owner.

In this process, the cargo owner only needs to pay a lump-sum fee to the shipping company, which covers the cost of container trailers.

In Quanzhou, door-to-door is mandatory. Every year, the shipping company and the fleet negotiate a long-term contract price based on various factors. Regardless of the market situation that year, the "long-term contract price" will be implemented. In other words, if the freight rate was sluggish that year and the fleet could get 1,000 yuan, the fleet in a good year would only get 1,000 yuan.

The background of the "Notification Letter" mentioned above was issued when the shipping company's freight rate increased during the implementation of the "long-term contract price" for one year, but the container fleet did not get a "part of the pie" from it.

To what extent have oil prices risen?

According to information released by the National Development and Reform Commission, starting at 24:00 on March 3, 2021, domestic gasoline and diesel prices will increase by 260 yuan and 250 yuan per ton respectively.

It is understood that this is the first "eight consecutive rises" since the implementation of the new pricing mechanism for refined oil products on March 26, 2013.

Industry insiders believe that the previous cold wave weather in some production areas has led to a decline in crude oil production, and multiple factors such as further boosting of global market confidence have also promoted the rise of oil prices.

After the "eight consecutive rises", a driver said that after the price adjustment, the cost of fuel per tank will increase by about 84 yuan.

Will the drastic reduction of truck drivers become a problem to be solved in the logistics industry?

Trailers are towing vehicles and have extremely strict requirements on the driver's operating technology, so they have a high barrier to entry.

Under the situation of soaring prices, the wages of tow truck drivers are as stable as Mount Taishan. With increasing transportation costs, traffic restrictions, and emission upgrades, there are more and more restrictions, and the living space of tow truck drivers is gradually compressed. ".

This situation is not only present in China, but also a major issue that threatens global trade. The International Road Transport Union IRU stated that due to economic recovery and increased demand for transportation services, transportation companies expect the driver shortage in 2021 to increase again.

This gap is expected to reach 18%, 20% and 24% in Mexico, Turkey and Russia, respectively, and close to 33% in Uzbekistan.

It is understood that the Shishi Logistics Association has issued applications for price increases in towing fees to various shipping companies on May 6, and decided to organize suspension of work after the request for price increases was not responded.

The demand is high, and the freight to the east coast of the United States can reach up to $23,000

Anders Schulze, vice president and head of global shipping at Flexport, said: "From June 1st, we will see price increases again." This is because shipping companies have submitted some general tariff (GRI) increases to the US Federal Maritime Commission. .

Schulze said that although Drewry and other freight indexes show that the freight price on the east coast is about US$8,000/FEU, the freight rate required to transport goods ranges from 11,000-20,000 US dollars/FEU. He believes that the freight to the east coast can reach up to 23,000 US dollars. /FEU.

An increase of 485% over the same period last year! Asia-Europe freight reaches a new high

Although the prices of some routes have begun to decline, the main east-west container freight rates continue to remain high, and the major freight rates for shipping containers from Asia to Europe have set new historical records.

The spot rate for Asia-Northern Europe rose by 9.1% to US$9,871 per 40 feet, while the spot rate for Asia-Mediterranean FBX rose by 6.1% to US$10,214 per 40 feet.

At the same time, Drewry’s World Container Index (WCI) showed that the freight quote for a 40-foot container from Shanghai, China to Rotterdam, the Netherlands, rose to US$10,174, a 3.1% increase from last week. Compared with a year ago, it has soared. Up 485%.

There is a topic worth pondering: Today, when the global shipping industry "black swan" frequently appears, shipping prices frequently break records and hit new highs. Shipping companies make a lot of money. However, other nodes in the chain, such as ports and truck fleets, have not benefited from such bonuses. Why?