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During the peak season when freight volume is soaring, the phenomenon of logistics companies being exposed to bankruptcy has been rampant in recent times. Some time ago, the bankruptcy of a large freight forwarder in Shenzhen caused turmoil in the industry, and a large number of sellers had their goods detained and had no way to seek redress, and even missed the big promotion.
Soon after, rumors once again spread in the industry that four well-known freight forwarders were at risk of bankruptcy. Although the freight forwarders involved issued solemn statements to prove their innocence, the rumors still caused panic among the people.
The piles of goods piled up together also make many sellers worry about the "personal safety" of their goods during transportation. However, before one wave of troubles is over, another wave of troubles arises, and sellers are worried again before they can completely let go - recently another freight forwarder was caught in a storm of bankruptcy.
Another freight forwarder was exposed or went bankrupt, deeply in debt Recently, the cross-border circle has been buzzing with rumors that a Shenzhen freight forwarder went bankrupt. A customer posted a warning on WeChat Moments, claiming that the logistics company was suspected of fraud and deliberately delayed payments to multiple customers. Its usual method was to pay in cash for the first few shipments, but refuse to pay after the monthly contract was signed. It is reported that the whistleblower also provided a large amount of relevant information about the logistics company, as well as the legal person's ID card.
In response to the growing speculation and doubts, the freight forwarder involved quickly issued a notice to respond to and clarify various rumors. According to the statement, the logistics company is now in operational difficulties:
1. In 2023, the volume of cargo will drop sharply and profits will drop to the freezing point 2. Seriously trapped in triangular debt, receivables cannot be collected in time 3. After experiencing the European turmoil at the end of 2022 and the American turmoil in May 2023, the current profits can no longer support daily expenses, the losses are serious, and the assets are insolvent, so it is impossible to pay the goods in time.
The logistics company further stated that all outstanding debts were paid by the company and it is still operating. Therefore, major suppliers still need to wait for a while to recover their payments. If they cannot wait, they can resolve the issue through legal channels.
It can be seen that the cooling of the container shipping market in the past two years has caused the logistics company's performance to continue to be bottlenecked, and the sharp decline in profits has also made it unable to repay the goods in time, thus forming a series of debt disputes. The European market review at the end of last year and the "big liquidation" of the account in May this year are two heavy hammers that make the situation worse.
Under the combined effects of various internal and external troubles, the freight forwarder is temporarily in deep operational difficulties. In order to reduce operating expenses and maintain subsequent operations, the company revealed that it will move out of the previous address and the new address will be sent to all cooperative customers.
Judging from the photos taken by relevant people, the original office address of the logistics company is now empty and the warehouse has been sublet. Although it claims that it is still operating normally at this stage, it is still unknown whether it can get out of the predicament and repay the relevant debts in time.
Many freight forwarders are caught up in the storm of bankruptcy, and sellers put up banners to demand the return of their hard-earned money
Due to the lack of strict supervision, freight forwarding scandals have always been common. However, in the past two months, especially at the critical juncture when the peak season inventory volume is increasing, related scandals have emerged one after another and intensified.
In early June, a large freight forwarder in Shenzhen had major operational problems due to a broken capital chain. Not only could a large number of orders in transit not be processed, but the company also owed a huge amount of debt. Not long ago, an eight-year-old freight forwarder was also exposed for suspected bankruptcy, and sellers held banners on the street to demand the return of their hard-earned money.
As financial defaults occur frequently, chaos in the freight forwarding industry is becoming increasingly severe. The situation of disrupting the market by spreading large-scale rumors about the default of peers is also extremely rampant.
Previously, in the article "Are there risks of multiple freight forwarders going bankrupt? The companies involved solemnly stated: These are all rumors!", it was reported that four freight forwarders suddenly went bankrupt and a large amount of goods were seized by customs. The freight forwarders involved quickly clarified the rumors, but the widespread spread of the rumors still had a certain impact on the image of these four companies.
Recently, major social media platforms have once again spread rumors that a logistics company, in order to boost sales, used a large number of UPS accounts, causing the seizure of goods from multiple cross-border companies, and refused to compensate for millions of dollars in losses. Afterwards, the logistics company issued a solemn statement, and the legal team has collected evidence for various false statements.
Whether it is the frequent incidents of freight forwarding bankruptcy, or the chaos of people with ulterior motives deliberately slandering their peers and disrupting the market, what they all reflect is the pain points currently faced by the cross-border logistics industry - a sharp drop in freight demand and intensified market competition.
In the first half of 2023, the capacity of major global shipping routes has gradually returned to pre-pandemic levels. However, while the shipping industry's capacity supply continues to increase, transportation demand continues to be weak.
According to Shipping Network, on the US route, cargo load in July increased slightly compared to May and June, but it is still not as good as before the epidemic; Europe has severe inflation and a sluggish economy, and has entered the peak season in the third quarter, but cargo volume is still hovering at a low level, and the actual cargo load situation is not good.
Overall, the supply and demand balance in the container shipping market is still not ideal at this stage. Many shipping companies and freight forwarders have stated that the actual cargo volume in the European and American markets is relatively small.
The reduction in freight volume is closely related to the sales status of foreign trade merchants. According to survey data, in the first half of this year, about 60% of sellers' revenue and net profit were both lower than expected, and order shrinkage has become a common situation for most sellers. Data shows that nearly 70% of sellers' sales in the first half of the year fell compared with the same period last year, and only 30% of sellers grew against the trend, but the increase was not significant.
The epidemic has helped promote explosive growth in cross-border e-commerce, and has also driven the logistics industry into a hot spot, with the "sea money transporter". However, after the epidemic effect was short-lived, the cross-border export industry went from a growth spree to returning to normal, and the negative effects of a large loss of orders and a sharp reduction in shipments also radiated to the container shipping market.
Today, the market environment of supply exceeding demand is gone forever, and instead, freight forwarders are carrying a large number of empty containers everywhere to "seek goods". In order to compete for limited market share, more and more freight forwarders have started to engage in price wars, and even take risks to get involved in the gray area, which has also made the chaos in the industry increasingly out of control.
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