Shipping Issues in China: Focus on 2022!

Lately, we learn that there are serveral problems in ocean shipping in China. The global trade has slowed down significantly with the current shipping issue across China. After discussed with shipping agents, here we would like to update the information on the current shipping problems.

Feedback Problems from Shipping Agents

Shortage of containers: Over the past few months, we have learned that the market is facing a shortage of containers, especially on the strong global backbone routes, where 40-foot containers are in short supply.

Increasing freight: The Shanghai Delivery Exchange data shows that the Shanghai export container freight index for the United States West Coast route was reported at ＄3,813. Compared with the freight rate a week ago, each container cost has actually enhanced by ＄55, even doubled the rate at the beginning of the year. The United States East Coast course freight index is ＄4,534, an increase of regarding 77% compared to the start of 2020.

What Led to the Problems?

According to shipping agents analysis, COVID-19 maybe the main reason that has led to the above problems. It had a domino effect on the freight service in China. The following reasons can give a further glimpse and better understanding of the cause that led to such a situation.

• Many countries around the world are currently experiencing a national lockdown due to the Covid-19 outbreak, which causes a significant reduction in national production. Therefore, their import volume from China has been increasing sharply due to the fact that the well-controlled epidemic situation in China, which lead to a surge in demand for containers in China.
• While export has increased suddenly, there has been a drastic decline in the exporting of products to China. This causes the problem that many containers have to be sent back in empty. The returning of empty containers is also a factor that has resulted in increasing the price of ocean freight.

Chinese reports have revealed that there is a constant shortage of 20 feet, 40 feet as well as 40-foot high cube containers. This has resulted in Chinese exporters hogging containers of any size, at times even down-sizing the containers to export the products in containers that can transfer fewer products. Additionally, the shipping freight companies are now charging an exorbitant price for shipping the cargo.

According to NVOs (Non-Vessel operating), common carriers, and other carriers, the container shortage in China is not going to dissipate soon. Instead, according to the NVO consultant, it is going to get worse because of the restriction caused by the COVID-19.

The Solution

The problems are challenging to be alleviated soon until the world trade goes back to working as before on time.

Both freight companies and suppliers are working together to alleviate the issues. Typically freight companies working with large retailers and customers used to grant extended free time for container returns. Suppliers, including us, are trying best to keep customers updated on the latest shipping information. Placing orders in advance is now recommended if you need shipment from China to get the goods on time.

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