LOCAL export businesses are feeling the strain over shipping container shortages and freight rate surges that have increased their costs.

At the Yantian port, 11,000-export container quota could be snapped away in 30 minutes and it is hard to secure a shipping container even with freight rates increased tenfold, according to a Shenzhen Economic Daily report.

“Nowadays, the freight transporting a container is almost the same as the price of a container. And it is hard to book a container and shipment,” said Pi Qinyi, a manager from Shenzhen Zhongtong Imports and Exports Co. Ltd., during an interview with Shenzhen Economic Daily.

Zhongtong sells textile products, such as beddings, at slim margins. Due to the increasing material, freight and labor costs, the company is now reluctant to receive overseas orders, even if the demand is increasing. In addition, currency fluctuation may bite away the remainder of their profits.

Small and medium-sized forwarding companies are also reluctant to transport low-value goods like quilts, toys and Christmas trees.

“The value of goods wouldn’t cover the freight even if the containers are fully loaded. Once receivers reject them upon arrival, forwarding companies will face high stakes,” said Li Xiaofeng, business manager from Boda Express Logistics (Shenzhen) Co. Ltd. Forwarding companies generally act on behalf of exporters to pay freights in advance or collect payments for the manufacturers. Their risks increase sharply with the freight increases.

“The increase of freight rates and shortage of container boxes are mainly caused by the disruption of supply chain system brought about by the pandemic,” said Jiang Hongyue, executive chairman of Shenzhen Foreign Economic, Trade and Investment Development Promotion Association.

After the COVID-19 outbreak, China has become the world’s most important exporter for anti-virus materials, industrial products, and daily utensils and necessities. However, these products couldn’t be delivered timely at the ports in Europe and the U.S. Container turnovers were extended and products were overstocked. Some shipping companies even returned with limited or no cargos from overseas, which caused freight surges and increasing demand for containers.

“This is a systematic risk for the global supply chain that can’t be solved by exporters alone,” Jiang added. He also noted that exporters could consider other options such as air service and Sino-Europe trains. He estimates that the situation will ease in the first half of 2022 as container manufacturers are rushing to meet the demand and the turnover of containers overseas could be increased when supply and demand become more balanced.

(Han Ximin)