Home Business International shipping costs rise, millions of Christmas goods are overstocked in Yiwu warehouse | Santa Claus | Low profits

International shipping costs rise, millions of Christmas goods are overstocked in Yiwu warehouse | Santa Claus | Low profits

by admin

[Epoch Times August 23, 2021]Yiwu City, Zhejiang Province is the world‘s largest distribution center for Christmas products. These Christmas products are generally shipped at the end of September each year, but this year millions of Christmas products are still backlogged in warehouses. Some business owners said that the freight is too expensive, “the value of the goods is not worth the freight.”

According to a report by China Business News on August 22, Yiwu provides two-thirds of the world’s Christmas supplies every year. Zhu Zhijuan, the relevant person in charge of Yiwu Xintean Arts & Crafts Co., Ltd., a foreign trade manufacturing enterprise specializing in the production of artificial Christmas trees, revealed: “In previous years, our goods will be sold out at the end of September, and we have not seen the end this year.”

Zhu Zhijuan said that August is often the peak season for Christmas supplies. This year, customers placed orders much earlier than in previous years, but shipments have fallen into a large-scale delay. The annual export volume of Zhu Zhijuan’s company is about 150 million yuan, so he had to spend 2 million yuan to rent a 10,000-square-meter warehouse for stacking Christmas trees produced by the company.

She said that because of the epidemic, customers placed orders earlier this year. In previous years, they would not be able to receive orders for a whole year until the end of May. This year, it was brought forward to March. The apparent rebound of orders at the beginning of the year made them very optimistic about the situation this year. They did not expect that “customers placed orders early, and the goods were also rushed out, but shipments were delayed.”

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Zhu Zhijuan believes that the main reason for the delay in shipments is that the tight supply of international logistics has caused freight rates to continue to rise and the shipping cycle to lengthen.

The latest Global-Baltic Container Freight Index shows that the shipping price of a 40-foot standard container on the China-US East route has exceeded US$20,000, a five-fold increase over the same period last year. The Shanghai Export Container Freight Index, which was announced on August 13th, representing the spot price, was recorded at 4,281.53 points, which continued to hit a record high, an increase of more than 4 times compared to last year’s lowest point.

In addition, on August 11, a confirmed case was discovered at the Ningbo Port, the world‘s largest cargo throughput port, which triggered the emergency closure and suspension of operations in the Meishan Port area from that day, making the already tight international capacity worse.

Qiu Xuemei, general manager of sales of Dongyang Weijiule Arts & Crafts Co., Ltd., said that the current value of goods is not enough to cover the freight rate that has risen several times. Cost. She said that, generally speaking, a cabinet with a prepayment of more than one thousand yuan, these are all from the factory, and it is also an additional cost this year.

Qiu Xuemei said that at least 30% of the Santa Claus crafts they had on hand were trapped in the warehouse. These Santa Clauses with chips are not cheap. Due to their mid- to high-end positioning, the price of a single piece can reach hundreds of yuan.

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In addition to soaring shipping costs, the prices of raw materials for the production of Christmas goods are also rising. Zhu Zhijuan said that because the price of raw materials keeps rising, the sooner the orders are received, the more losses will be. “The speed of receiving orders cannot keep up with the price increase of materials”, and the price of related materials for the production of Christmas trees generally rises by 30% to 40%. “There is business but no profit this year.” She said.

According to “21st Century Business Herald” news, in the face of such low profits, Zhou Ming, the head of a foreign trade company in Tianjin, said that even in the annual peak season for foreign trade demand, there are already small shippers in the market who have no choice but to give up orders.

Editor in charge: Liu Yi#

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