Currently, major factories are in the peak production period of September and October, and the foreign trade industry is also in the golden season. However, a power restriction order has caused many major industrial provinces to shut down production. During this critical period of stocking up for the peak season, faced with an endless stream of orders, they are unable to open due to the pressure of dual control.
Cross-border navigation , Tongtuo's parent company announced power cuts and production suspension, and production capacity has dropped by 50%! #Amazon##Cross-border headlines#Cross-border e-commerce video account ▲ Video account focuses on cross-border navigation
With production capacity down by 50%, Tongtuo’s parent company announced a temporary suspension of production! Nowadays, the Q4 peak season is approaching, but the introduction of the most stringent power restriction policy has disrupted the production plans of many foreign trade factories and significantly reduced production capacity.
It is learned that recently, Tongtuo's parent company Huading Co., Ltd. issued an announcement on power restriction and production suspension. The announcement stated that based on the requirements of "double energy control", some of the company's factories and subsidiaries will temporarily suspend production. ▲ The picture comes from Juchao Information Network The entities temporarily suspended from production include the second plant with a designed capacity of 40,000 tons, and the ongoing project of the subsidiary Wuzhou New Materials Company with a designed capacity of 150,000 tons. It is reported that the above-mentioned production capacity accounts for 50% of the company's total production capacity before the "double control" production suspension. The temporary production suspension will be implemented from September 25, and it is initially expected to resume production on October 1. Although Huading Co., Ltd. stated that it will minimize the adverse effects of production suspension and ensure the timely supply of orders, under the strict control of the power rationing policy, the specific situation of subsequent production recovery is still unknown. Under the pressure of the "dual control of energy consumption" target, many major foreign trade companies have issued announcements one after another, suspending some production lines of the company or its subsidiaries in response to the requirements of the dual control policy, which is expected to have a certain impact on future sales performance. Unlimited storage capacity at Canadian sites! Will inventory restrictions be relaxed? The strictest power restriction order not only directly caused a decline in factory production capacity, but also indirectly led to a plunge in freight rates. In addition, some sellers reported that inventory restrictions seemed to be loosening.
▲ The picture comes from Zhiwubuyan A seller revealed that with the comprehensive upgrade of the power rationing order, a series of chain reactions such as a sharp drop in production capacity and a plunge in freight rates followed one after another, and Amazon's inventory restriction policy also began to loosen. The seller's store on the Canadian site suddenly showed unlimited storage capacity and there was no limit on individual products. ▲ The picture comes from the seller communication group However, at present, only sellers in Canada have unlimited storage capacity. A small number of sellers in other sites have also seen an increase in storage capacity, but most sellers are still on a downward trend: "The storage capacity has been cut by 1,600. I don't know how to deliver the goods." "The storage capacity has dropped twice, from more than 5,000 to more than 3,000 now." "It's dropping every week, a steady drop of a few hundred each time." It can be seen that the decrease in shipments after the power restriction order has led Amazon to relax inventory restrictions to encourage sellers to actively ship goods. This is currently just speculation by sellers. Freight rates have plummeted. Should sellers take the opportunity to replenish their stocks?
Now that the traditional peak season in Europe and the United States is approaching, how to prepare for the peak season has become the most concerned issue for sellers. Previously, the logistics and transportation costs were high, which made many sellers face the embarrassing situation of having orders but being unable to ship. Now that the freight rates have plummeted after the implementation of the power restriction order, should sellers take the opportunity to replenish stocks?
In fact, although freight prices have shown a clear downward trend, sellers still need to carefully consider factors such as the supply chain situation and logistics timeliness, and never ship blindly. 1. Supply chain disruption and logistics delays It is learned that with the approaching of the peak season, European and American countries are currently facing severe supply chain crisis and logistics delays. The long-term shortage of truck drivers has intensified the pressure on supply chain disruptions on major retail platforms, threatening package deliveries on Black Friday and Christmas Eve, and significantly delaying the delivery of a large number of products. Moreover, congestion in major ports in the United States and the Asia-Pacific region is still worsening. The congestion in the Los Angeles-Long Beach Port has intensified. As a large amount of goods are sent abroad, the efficiency of warehouse turnover, express delivery and other links has slowed down significantly. Maersk reported that the waiting time for berths at the Port of Seattle was 11 to 12 days, and the port stay time increased to about 7 days. On the east coast of the United States, there were about 30 ships anchored at the Port of Savannah, waiting for more than 7 days. In the Asia-Pacific region, the number of container ships waiting to transport export goods has increased sharply, and congestion at major loading ports is still worsening due to the impact of the new crown epidemic, heavy workload and other factors. 2. Freight rates have not yet peaked, and the downward trend may not be sustained Although freight rates on all lines have plummeted, with Matsushita Shipping’s freight rate dropping from nearly 30 yuan/kg to a minimum of 10 yuan/kg, industry insiders predict that freight rates may not continue to fall. Recently, Jefferies published a report on the Asia-Pacific shipping industry. In response to the slowdown in container spot freight rates for the third consecutive week, the market is concerned about whether container freight rates have peaked. Jefferies said that freight rates have not yet peaked and are expected to peak before the closing of the Christmas shipping window (possibly at the end of October). In addition, as port congestion continues to worsen, raw material-related rates will rise, and it is estimated that by the end of this year, earnings for dry bulk, tankers and air freight will be more seasonal. As the container shipping market is changing rapidly and experiencing huge fluctuations, there is still great uncertainty as to whether it can maintain stability in the future. Therefore, although the decline in freight rates is a golden opportunity for sellers to restock, when shipping, on the one hand, they need to consider the worsening congestion at foreign ports and the inefficiency of logistics and transportation; on the other hand, they also need to formulate and promptly adjust delivery plans based on fluctuating logistics timeliness and prices.
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