Shipping fever in China Export

Data shows during Jan to July of 2021, the China export has been keeping increasing at a high level. But many China exporters are facing shipping headaches.

The shipping container freight has been going up and up in a long time, some container cost over 20K USD in hot lines, furtherly a container is hard to book for many exporters. Some China manufactuerer are in an embarrassied situation, they have order but they are not dare to accept because shipping cost makes losing money for order.

We are watching closer in the Guangdong province where is the main area for China export.

In Dongguan port, the huge shore bridge equipment is moving containers continously, trucks are moving like little ants in the storage yard...these are the epitome of the booming export for "Made in Guangdong". By July, the export of Guangdong province has been increasing for non-stop 9 months and from Jan to July the container usage increased by 4.6 times.

The tremendous oversea needs plus COVID, makes the sea freight getting crazy steadily.

Since 4th quarter of 2020, the crowd needing of containers has been seem in southern China and while Suez Canal met traffice jam in early 2021 that makes Europe line stopped, the shortage of containers became a major issue for international sea shipping from China to globally.

The primary reason, of course, is the popular cross-border B2C, C2C platforms sales, it connects the Europe and American buyers and many of the items are made in Guangdong--especially electronics. The other factor is due to COVID, the work effeciency in many countries are slow, such as ports, yards, etc. Containers are forced to stay in single spot for a long time.

Electromechanical products occupies 70% of the Guangdong export, manufactureres have a lot of orders but profits are becoming so small due to the increase of international freight.

"Because of the sea freight price issue," said one of the China manufactuerer manager, " we have 70% electric tools sold to America and in 2021 first half, our order increased by 30% but only 80% of our products can be shipped to ports, for the balance we need to pay 1million yuan rent warehouse waiting for containers. Furtherly the inland shipping to Shenzhen port also increased 30% ~ 40%, for sea freight, a 40" container cost changes from 2000USD to 15K USD. "

This company is rather big and they have their money to afford and keep going, but many smaller China factories are facing even harder issue "to live or to die". Because many big exporters can get ensured containers from vessel shipping lines directly but smaller factories can only book through shipping forwarders, the frequent result is all booked out already or with much higher shipping cost. Some China factories already stopped production due to warehouse full and not able to ship out.

To see the problem and to solve it, the China government custom has agreed many factories to register more warehouses out of their own plants, and also they contacted shipping lines to order chartered boat for exporters.

Hope the international shipping fever can reduce to normal soon which will be good for both exporters and the international buyers.