The peak season in the second half of the year is about to arrive, but sellers have to face many troubles at this critical juncture.

Yesterday, Amazon updated its backend inventory capacity again, and the shipment volumes of most sellers plummeted, leaving the sellers in tears.

To make matters worse, this year, affected by many factors, freight rates have only been rising and not falling. Not only is the logistics timeliness unsatisfactory, but container freight rates are sky-high.

Today, a report by CCTV Finance about [Rising Ocean Shipping Prices] attracted many sellers to forward and pay attention.

▲ Video account attention: cross-border navigation

According to CCTV Finance, since the beginning of this year, congestion incidents have frequently occurred at many ports around the world, and shipping prices have risen one after another, and the negative impact on all parties has gradually become apparent.

An industry insider said: " Because shipping capacity is suppressed, the ship rental has also increased. A Panamanian ship with 4,200 containers now charges up to $40,000 or $50,000. If it is urgent, some may charge $100,000 a day. "

According to the report of Shipping.com, the shipping cost has increased significantly recently. The shipping cost of a 40-foot container from a Chinese port to the United States can reach 20,000 US dollars. It is worth mentioning that the cost was less than 4,000 US dollars last year. Compared with the same period last year, the international shipping cost has soared by 500%!

On the one hand, freight demand continues to increase and ocean freight rates continue to rise; on the other hand, logistics timeliness is also very worrying, with varying degrees of congestion occurring at many ports around the world.

The industry believes that the current "vessel shipping route reliability" of shipping companies has fallen to a 10-year low, causing further delays in almost all major seaports in the world.

Many sellers also expressed their deep understanding after seeing the above reports:

"I have personally experienced that not only have the prices of ships increased, but the warehouses have also been overwhelmed. There are too many orders, but it is difficult to ship the goods."

"Can you save the small sellers? Shipping by sea is now as difficult as shipping by air. This year is too difficult."

"The one who works in foreign trade frowned."

Under the Weibo topic "Container shipping rates soar to $100,000 a day", complaints from foreign trade people and cross-border sellers can be seen everywhere.

▲ The picture comes from Weibo

Under the double blow of high freight costs and time delays, not only has it become difficult for sellers to ship goods, but many freight forwarders have also stated that it has been greatly affected themselves. Many customers are unable to ship their goods, and some even abandon the goods because the cabinets are more expensive than the goods.

▲ The picture comes from Weibo

The second half of the year is the peak season for the foreign trade industry. The demand for shipments by many sellers has increased significantly, but the high freight costs have repeatedly discouraged them. So what exactly is the reason for the current situation?

According to some reports and analysis by professionals, three main factors affecting ocean freight and container freight rates are summarized:

1. The global COVID-19 pandemic is intensifying

It is learned that the COVID-19 pandemic has brought a huge impact on global trade. Due to the out-of-control of the epidemic in some foreign regions, port blockades, severe obstruction of shipping, a large number of containers are not running smoothly, and the distribution of containers in the world is seriously unbalanced.

In addition, severe weather such as typhoons along the coast of China, wildfires and hurricanes in North America also affect port operations; coupled with the aging of port equipment and inefficiency caused by staff shortages, port congestion and time delays have also been aggravated.

2. US inflation

In the first half of this year, the United States has launched subsidy plans many times and provided certain financial subsidies to eligible people, which has led to a recovery in people's consumption power, but at the same time it has also exacerbated inflation.

The arrival of subsidies has led North American consumers to purchase large quantities of goods from around the world, especially those from China, making the China-North America route the most profitable shipping route in the country and causing a supply-demand imbalance in the shipping market.

3. Congestion at many ports around the world

The report pointed out that the demand for international shipments has increased, but the supply has decreased, resulting in the current shortage of containers. The sharp increase in import demand in the North American and European markets has caused delays in global shipping.

Faced with global port congestion, the transit time of Pacific Shipping's ocean-going vessels has been extended from 70 days to 90 days, and some have even reached 100 days.

For some low-profit trading companies, freight costs even exceed half of the total trade volume, greatly increasing the operating costs of cross-border sellers and foreign traders.

In contrast to the increasingly slim profits of sellers, the profits of leading shipping companies have skyrocketed.

It is learned that on August 30, COSCO Shipping Holdings, the leader in container shipping, disclosed its 2021 semi-annual report. From January to June 2021, the company achieved operating income of 139.264 billion yuan , an increase of 88.06% over the same period last year .

It is reported that in 2020, COSCO SHIPPING Holdings achieved operating income of 171.259 billion yuan and net profit attributable to shareholders of 9.927 billion yuan. In other words, in the first half of 2021, the company's net profit attributable to shareholders was 3.7 times that of the whole of last year.

  ▲ The picture comes from COSCO SHIPPING Holdings’ financial report

According to Alphaliner data, the size of COSCO SHIPPING Holdings' container fleet continues to rank first in the industry.

In terms of segments, COSCO SHIPPING's container shipping business revenue reached 136.438 billion yuan in the first half of the year, a year-on-year increase of 90.59%; the terminal business segment revenue reached 3.717 billion yuan, a year-on-year increase of 15.28%.

  ▲ The picture comes from COSCO SHIPPING Holdings’ financial report

The report pointed out that in the first half of this year, the global logistics supply chain was challenged and impacted by multiple factors such as port congestion, container shortages, and inland transportation delays. The supply and demand relationship in the container shipping market became tighter, and freight rates on major routes faced upward pressure. The substantial growth in COSCO SHIPPING Holdings' performance was also mainly due to the increase in freight rates.

However, institutions such as Guotai Junan Securities believe that as the third quarter enters the traditional peak season, inventory replenishment will continue, and the logistics supply chain will be affected by the epidemic, and freight rates are still expected to remain at a high level.

As sellers’ operating costs gradually increase, coupled with the numerous restrictions of Amazon platform policies, how should sellers prepare for the peak season?

The answer lies in the "2021 Ten Million-Level Cross-border E-commerce Seller Empowerment Summit" of Lingxing ERP . Important guests and epic sharing will help you analyze the key points and directions of current seller operations during the peak season.

The "Vertical and Horizontal Growth" 2021 Ten Million Cross-Border E-Commerce Seller Empowerment Summit will meet you on September 10! On the day of the conference, many industry leaders gathered to discuss the problems faced by cross-border sellers.

The summit invited several heavyweight guests from the cross-border circle, including organizational management experts, supply chain management experts, traffic marketing operators, and billion-level overseas entrepreneurs to gather in Shenzhen to discuss the difficulties faced by cross-border e-commerce sellers in going overseas at close range and empower sellers to grow.

We will be waiting for you at the Shenzhen conference on September 10th!

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