Since August this year, the shortage of shipping containers has been a new norm for plywood exporters in China. The freight cost of containers leaving China has more than doubled compared with normal days.
This situation has impacted Chinese plywood companies in many ways.
Loss of Profit
The freight increase in such a short time means exporters have to endure the extra cost short term.
A 40ft container freight to the Middle East was 1000USD and now is 2500USD. The insane freight cost is giving plywood exporters in China a hard time.
The CNY/USD exchange rate has increased 10% in the past two months and this gives exporters another hit.
Delay in Delivery
Another setback of the container shortage is that exporters can not get enough containers to ship to their customers. There are many delays caused by the shipping company.
The shipment delay also affects the production schedule of the plywood manufacturers. The slow down of shipments is restricting the production speed of factories.
Even though Chinese plywood has a great advantage on prices, but the price gap with Malaysian or Vietnam plywood are limited.
The very expensive logistic cost will not only harm the plywood industry in China, but also many other industries.
The final cost are conveyed to consumers and this will ultimately increase the cost of many things.
Our company has a logistic partner to ensure that you can get a good freight rate and available containers. You can choose to ship with Maersk, MSC, CMA CGM, HPL, PIL, APL, COSCO, SITC, and many more shipping lines.
Lack of ships and containers caused the price increase. Too many containers are left at port and there is not enough containers in Chinese ports.
There is a small chance that freight will go back to normal in 2020. It is expected to get lower in the middle of 2021 and fully recovered in 2022.
Choose to ship more plywood from a relatively cheaper shipping line. And make optimization on the supply chain.