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Why is shipping container so expensive in 2022?

Starting in 2020, we obviously felt that shipping costs have been rising during the process of cross-border trade, and found that shipping containers are not only in short supply but also very expensive. Not long ago, we obtained some information from Ningbo Port, maybe this can explain the reason.

In China, Ningbo Port is second only to Shanghai Port and is the second-largest port in China. In 2020, the shipping container throughput of Ningbo Port will reach 27.05 million TEUs and the cargo throughput will reach 601 million tons. In the first half of this year, the export value of Ningbo Port exceeded 330 billion yuan, an increase of 52% over the same period last year. This series of numbers is gratifying, but it also caused a very troublesome problem. What’s the problem?

That is: the shipping container is not enough

According to a port official, this year’s Ningbo Port is “difficult to find a box.” The trucks lined up outside the port every morning are like a long queue, often taking a few minutes to move one meter.

Why did this happen?

The common situation is that a fully loaded ship will transport goods produced in China abroad, but due to the epidemic and other reasons, foreign ports can not handle these goods in a short time, resulting in a large number of shipping containers and goods overstock in the port.

At the same time, because China’s material demand is not as strong as other countries, that is to say, there are not so many goods to be transported back to China from abroad, so a ship full of goods may only be driven empty. Back to China, or ship some raw materials that do not need to be packed back to China. In this way, the supply of domestic shipping containers has become increasingly tight.

The shipping container itself does not have much technical content, but it is very important for human shipping. Through the realization of large-scale and standardized shipping of shipping, the emergence of shipping containers has reduced shipping costs by more than 90%.

Data show that in today’s Global trade, the transportation cost per kilometer of a ton of goods is 26 times that of sea transportation and 95 times that of air transportation. The absolute advantage of sea transportation in transportation cost is inseparable from an insignificant shipping container.

Due to the shortage of shipping containers in China, the cost of shipping container shipping has soared to the highest point in more than a decade.

A foreign trade business owner said, “Today, one of my shipping containers was shipped from Ningbo Port to the United States, and its shipping cost was as high as US$26,000. When the epidemic did not break out in early 2020, the cost was only US$3,000.”

From US$3,000 to US$26,000, shipping costs have increased nearly 8 times.

A friend who is engaged in international shipping said: “The general price for a 40-foot standard shipping container from China to the United States is:

In the past, shipping to the west coast of the United States (including ports such as Los Angeles, Seattle, and Long Beach) was US$1200-1500, and shipping to the east coast of the US (including ports such as New York and Washington) was US$2800-3000

At the end of 2020, it will be shipped for US$4000-6000 to the west and US$6000-9000 to the east of the US

This year, it will be shipped to the west of the United States for US$1,2000-18,000 and shipped to the east of the United States for US$18,000-24,000

The general price for shipping a 40-foot standard shipping container from China to Europe is:

A year ago, the market price was around 4000-8000 USD; this year, the market price was around 6000-12000 USD

Today, if a foreign trade business owner randomly finds an international freight forwarding company’s inquiry on the Internet, he is likely to get the following answer:

There is no position now, even if the price of a position is around US$20,000, and the shipping container may not be mentioned, it needs to be allocated.

Why there are not enough shipping containers

In addition, most of the commodities exported from China to overseas are clothing, home appliances, and some simple machinery and equipment. The value of a shipping container is about 40,000 US dollars.

It can be seen that more than a year ago, if a shipping container of goods worth 40,000 US dollars was shipped, if the shipping cost was 3,000 US dollars, then the shipping cost would only account for about 8% of the total value of the goods.

However, if the shipping cost increases to more than US$20,000 today, it means that the transportation cost of the goods has accounted for half or even more than 60% of the total value of the goods. What money does the manufacturer have to make?

So the foreign trade business owner sighed and said, “Today’s foreign trade business looks very hot, but in fact, we have not made any money, and we are even losing money to do business.”

He went on to say, “Even if the freight is increased, we have no choice because we must maintain our customers well. In the second half of this year or next year, once the epidemic in India, Vietnam, and Indonesia is lifted, the export pressure we face will definitely increase greatly. , So losing customers means losing the future. We are losing some money today, or we don’t have any money to make, because we can still do business next year.”

This is the situation caused by the soaring shipping costs. Regardless of the industry, it has received a great impact, and many companies are operating at a loss.

The story is not over yet.

The price increase is not only the freight, the products that have to be shipped overseas, such as home appliances, mechanical equipment, LED lights, and other products, the prices of their raw materials have also risen sharply in the past six months.

Starting from the second quarter of this year, the global economy has gradually recovered, and countries have generally adopted loose fiscal and monetary policies to accelerate the pace of economic recovery. There has been a boom in infrastructure construction in various places, and the global demand for iron ore and steel has increased significantly.

According to data released by the General Administration of Customs of China, in the first seven months of this year, China imported 650 million tons of iron ore, with an average import price of 1116 yuan per ton, an increase of about 69.5%; the average import price of crude oil was 2,960 yuan per ton, an increase of 26.8%. The price of steel also rose sharply, which rose by 29.7%; copper rose by 39.2%…

It can be seen that the prices of these important raw materials have risen by more than 60% at the highest and 26% at the lowest. The pressure on manufacturing enterprises in the middle and lower reaches of the rise can be imagined.

Today’s manufacturing companies in China, especially small and medium-sized manufacturing companies, are facing difficulties both at home and abroad.

Since May this year, the overall consumer demand in the Chinese market has declined. In the second half of this year, with the economic recovery of various countries and the control of the epidemic by the new generation of “international factories” in Asia such as Vietnam and Indonesia, the slowdown in China’s foreign trade export growth will be a high probability event.

If it is difficult for China to achieve breakthroughs in domestic and foreign demand, and the prices of raw materials continue to rise, then the manufacturing companies caught in the sandwich will be in a huge dilemma.

In the second half of the year when the fundamentals of industry supply and demand cannot be improved, all manufacturing companies can only find ways to keep themselves alive. When will the next turning point come? Today, we still do not see certainty.

What is your opinion on this? Welcome to leave a message in the comment area.

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