The drop in freight demand due to the pandemic has also had an impact on the market for incoterm cip

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Factors affecting freight forwarder incoterm cip Freight transportation

In international freight transport, one of the most concerning issues is the price of freight transport. The cost is directly related to the cost of transportation. Because many exporters do not understand the price of transportation very much, and often have a lot of extra spending, then today to understand the factors of the price of international freight transportation? Do You Need Freight Forwarders? China DDP for World is a full-service and shipping forwarder dedicated to assisting our clients in focusing and growing their businesses. Send an Email to info@ddpforworld.com and get the latest freight price.

Reduced freight demand

The decline in freight demand and the resumption of logistics are the main reasons for the lower sea freight rates.

"Last year, due to the severe impact of the epidemic, there were many waves of buying up supplies overseas, and major retail supermarkets also stepped up stocking, resulting in inventory overstocking. New orders are down 30% to 60% on average this year." Nanjing a foreign trade company sales manager Chen he said.

Data show that as of May 8, the INVENTORY of Costco, a US retail supermarket, reached 17.623 billion US dollars, up 26% year on year, as many as hundreds of millions of dollars of goods were the inventory of last year's peak consumption season. In addition, Inventory at Macy's rose 17% from last year, and inventory at Wal-Mart's fulfillment centers rose 32%.

"Usually, US shippers prepare their cargo in July and August, but due to the previous increase in freight rates and uncertainties such as the epidemic, many shippers have moved the time to prepare their cargo to May, which has also contributed to the recent drop in freight demand." Ningbo shipping cargo agent Feng Jin told China Securities News reporters.

In addition, the logistics supply chain is gradually returning to smooth. "Before, because of the epidemic, workers stopped work, and the cargo at the dock piled up, so the containers could not come back. But recently, the situation has significantly improved, the speed of logistics turnover has significantly accelerated, before you need to book a warehouse 1-2 months in advance, since June, just one week in advance." Feng Jin said.

Industry insiders believe that the maritime super cycle has ended, freight rates are expected to accelerate the decline in the second half of the year, global container transport demand will drop from 7% growth in 2021 to 4% and 3% in 2022, 2023.

The transportation prices are different for different incoterm cip

In the general international trade process, the price of transport according to different modes of transport, price is also different. International freight rates are divided into sea freight, air freight and rail freight.

The specific incoterm cip freight rate can also be subdivided. For example, rail freight can be divided into passenger freight and freight. Shipping rates are also divided into tramp rates and liner rates. Tramp rates are also affected by market supply and demand relations at that time, while liner transport costs are relatively fixed. Airfreight can be divided into general goods, designated goods and special goods, and the specific transportation price is also determined according to the weight of transportation, at the same time, even if the volume is small, the weight is also counted by weight, but if the opposite is large, small weight, also according to the specific volume to calculate.

The choice of international logistics, the quality of logistics will affect the seller's store score, but also affect customer satisfaction rate.

Logistics advantages of the incoterm cip in the destination country and region

In Eastern Europe, DHL has advantages in Romania, Bulgaria, Moldova, Hungary and other places while EMS has advantages in Greece, Russia, Turkey and other places. Western Europe, Northern Europe, southern Europe can use DHL international express, TNT international express, these two kinds of customs clearance capacity. TNT has a clear advantage in the Netherlands and Belgium.

For Canada, the United States and other American countries, FedEx, UPS and DHL are all suitable for their strong customs clearance capacity and fast time.

Applicable to Asia, South Korea, Japan, Thailand and other Southeast Asian countries DHL, FedEx. DHL and FedEx are time-saving, but THE price of DHL is higher. Indonesia also suggests USING DHL because it has a stronger customs clearance capacity.

In Oceania, DHL and UPS aging fast, with high prices; TNT and FedEx have lower prices but relatively few outlets. Particular attention should be paid to the "Made in China" label on the packaging of Australian products.

Middle East express ARAMEX, EMS for Middle East region. Commercial express in Africa is very expensive. In remote areas, IT is suggested to send EMS international express. EMS countries have the strongest customs clearance capacity. The air express incoterm cip can reach many countries and regions that commercial express and postal express cannot reach, so the wide range of incoterm cip transportation is its advantage.

Factors affecting the shipping price of incoterm cip

In the process of international transportation, there are many factors affecting the price of transportation, in addition to some fuel and labor costs, there are many important factors. For example, the nature of the incoterm cip, its own value and packaging form, as well as stowage factor and transporter's requirements for transportation, etc. There will be some fixed costs during the use of the ship, such as the ship's maintenance insurance and fuel consumption. There is also the change of supply and demand in the incoterm cip market. In the transport off-season, transport prices are relatively low, in the transport of the peak season, transport prices will be relatively high.

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