[Foreign Trade News] Overseas Buyers Drop Orders, Overstock Inventory And Shipping Charges Fall

Since last year, the global container freight rate has continued to rise, and the container market quotation of some routes has soared to more than 10 times. Yiwu, Zhejiang Province, is an important concentration of China's foreign trade commodity export. Every year, a large number of foreign merchants come here to purchase. The drastic change of container freight rate also has a great impact on Yiwu's commodity export. High freight rates, foreign trade enterprises orders cold! Shipping space is hard to find, the warehouse is overstocked seriously! Experts said that the high container freight rate will gradually fall back.

Yiwu, Zhejiang: container freight rates remain high, Foreign trade enterprises' orders are cold

With the increase of container freight, low value-added goods are the most affected. Because of the small profit margin, these goods can not bear high freight rates. Therefore, many overseas buyers suspend their orders and postpone or refuse to receive some low value goods orders. According to a manufacturer of home furnishings, a batch of orders in April this year were originally planned to be delivered in June, but now they are still in the warehouse in November.

Not only that, affected by the epidemic situation, many international merchants are inconvenient to communicate with each other, and the passenger flow in the trade city is not as good as before, leading to a significant decline in the order volume of many stores this year.

Zhang Ping, general manager of a home decoration company in Yiwu, Zhejiang Province: before the epidemic, we made an output value of more than 3 million yuan a month, but now it is 700000 yuan. The main reason is that customers can't come in.

Yiwu, Zhejiang: shipping space is hard to find, and the goods warehouse is overstocked seriously

The main reason for the high container freight rate is the short supply of shipping space. However, the high freight rate leads to the overseas buyers to reduce the enthusiasm of placing orders or even to temporarily dump orders. In this case, the inventory of many small commodity enterprises in Yiwu, Zhejiang Province is seriously overstocked, and the cash flow situation of the company is deteriorating.

In Zhejiang Province, there is a warehouse for export goods. The warehouse of more than 6000 square meters is almost full of goods, but in sharp contrast, there are few container trucks to transport here. It is understood that this period of time is almost every day, so many goods have to be overstocked in the warehouse.

Su Xiaofeng is the person in charge of a freight forwarding company. He said that the warehouse can store 120 containers of goods, but recently only a few containers come and go to load goods every day. Under normal circumstances, it only takes 3 days for the goods to enter the warehouse and leave the warehouse, but now many goods in the warehouse have been stored for more than 10 days, and some of them have been overstocked for one or two months.

Su Xiaofeng, general manager of a supply chain management Co., Ltd. in Zhejiang Province: our shipping space is not available, or there is no container at the wharf. We have sufficient supply of goods, but the boxes can't come back in many countries with serious epidemic situation, which leads to a small number of containers in the yard.  

In another bathroom products company, Liu Junming, the person in charge, showed the full warehouse of goods to reporters. Due to the inability to book shipping space, a large number of goods originally planned for export could only be temporarily stacked in the product exhibition hall. According to statistics, their company's product turnover rate has been extended from 42 days to 58 days, and the company's cash flow is under pressure.

Some enterprises adjust their business strategies Experts: high container freight rates will gradually fall back

Many foreign trade companies said that the lack of shipping space is still very serious, sometimes in order to timely delivery, they have to entrust freight forwarders to increase the price of shipping space. Therefore, the actual container quotation in the market is generally higher than the official quotation.

In order to avoid the risk of shortage of containers and high freight rates, many companies have adjusted their coping strategies, such as expanding the proportion of domestic sales, or changing the sales mode of export to the pre-sale system and extending the delivery period.

It is understood that in late September this year, the container market quotation dropped slightly after a year's continuous rise. According to experts' analysis, there are still a large number of orders in China, and the loading rate of container ships is still at a high level, so it is difficult for freight rates to fluctuate violently in the short term. However, on the other hand, the margin of supply and demand of containers has eased, so we need to be vigilant against the risk of falling freight rates in the future.

Yan Hai, chief analyst of transportation logistics of Shenwan Hongyuan Securities: now the whole supply and demand is still in a very tense process, but the degree of tension has become more and more tense from the past, and now it has tended to ease. The time when the supply and demand is most scarce has passed, and the process of gradual decline should follow.