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UPDATES on SOURCING, IMPORTING & LOGISTICS while the upheaval lasts

Walter Hay

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Sep 13, 2014
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Recently I have posted updates in two threads relevant to these subjects, as well as commenting on these subjects in other threads, and judging by the small number of responses, I think they are largely going unnoticed.

I believe these subjects are important enough to warrant their own thread, so I have begun this one to keep everyone as up to date as possible.

This idea has been prompted by the amount of permanent or long term changes that I find it neccessary to incorporate in my sourcing/importing book 2022 update. The world of international commerce has been turned upside down since the advent of Covid, but the upheaval in the financial system is adding to the difficulties now being encountered by importers.

This thread will deal with NOW, rather than the future. I expect that much of the information that I post here will fade away into history as the year goes on. I will make my first UPDATE post later today.

Walter
 
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Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
12,906
World citizen
Recently I have posted updates in two threads relevant to these subjects, as well as commenting on these subjects in other threads, and judging by the small number of responses, I think they are largely going unnoticed.

I believe these subjects are important enough to warrant their own thread, so I have begun this one to keep everyone as up to date as possible.

This idea has been prompted by the amount of permanent or long term changes that I find it neccessary to incorporate in my sourcing/importing book 2022 update. The world of international commerce has been turned upside down since the advent of Covid, but the upheaval in the financial system is adding to the difficulties now being encountered by importers.

This thread will deal with NOW, rather than the future. I expect that much of the information that I post here will fade away into history as the year goes on. I will make my first UPDATE post later today.

Walter
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
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The Financial Times has reported that the UK is likely to run out of warehouse space within a year, with the stock of available warehouse space falling below 50 million square feet. This amounts to the nearly the total amount of space secured by importers in the first nine months of 2021, What this suggests is that what is available may be less than a year’s supply.

I might be able to suggest at least partial solutions to some of the problems that my updates outline, but this one to a large extent hinges upon the speed with which developers can gain council approvals and actually construct warehouses.

Recent history of labour and materials shortages is not promising in that regard.

If I needed storage space for imports in the UK, I would quickly book every self-storage unit that I could find. That's an expensive way to rent storage and logistically difficult, but needs must.

Walter
 

Walter Hay

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EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
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PLAN AHEAD:
Chinese holidays for 2022 will impact many orders, so the sooner you can place your orders the better. It's too late to book anything for shipping before mid January, but if you are quick and have a good reliable supplier orders placed within the next few days might be shipped by Jan 30.

Walter

Here is a gov.cn list of 2022 holidays:
1 Jan to 3 JanSat to MonNew Year Holiday
31 Jan to 6 FebMon to SunSpring Festival
3 Apr to 5 AprSun to TueChing Ming Festival
30 Apr to 4 MaySat to WedLabour Day Holiday
3 Jun to 5 JunFri to SunDragon Boat Festival
10 Sep to 12 SepSat to MonMid-Autumn Festival
1 Oct to 7 OctSat to FriNational Day Holiday
 
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Onwe

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Recently I have posted updates in two threads relevant to these subjects, as well as commenting on these subjects in other threads, and judging by the small number of responses, I think they are largely going unnoticed.

I believe these subjects are important enough to warrant their own thread, so I have begun this one to keep everyone as up to date as possible.

This idea has been prompted by the amount of permanent or long term changes that I find it neccessary to incorporate in my sourcing/importing book 2022 update. The world of international commerce has been turned upside down since the advent of Covid, but the upheaval in the financial system is adding to the difficulties now being encountered by importers.

This thread will deal with NOW, rather than the future. I expect that much of the information that I post here will fade away into history as the year goes on. I will make my first UPDATE post later today.

Walter
Looking forward to learn alot with this thread
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
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World citizen
CUSTOMS BONDS
Of interest for those using my book. If you have to buy a Customs Bond you can expect a 40% increase in the premium over what you paid last year.

Just another sign of the growing effect of inflation. In this case it is bearable considering the coverage it provides for importers, and the reassurance it gives to your couriers, Customs Brokers, or forwarders.

Walter
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
12,906
World citizen
FedEx and UPS have announced substantial price increases of 4.9% for parcels to the US, plus heavily increased surcharges for processing documents, particularly if shippers want to make changes after the booking is made.

What a coincidence that both have made the same decision at the same time!

While 4.9% doesn’t sound excessive, by the time all of the other rate changes and surcharges are taken into account, FedEx and UPS courier rates on any shipments in excess of 50lbs will increase by more than 50%. On lower weight shipments the increase is not quite so savage.

I suggest that rather than rely on your suppliers to negotiate a deal with air couriers, it is time to switch to getting door to door express delivery quotes from your freight forwarders, or from freight consolidators.

Consolidators are in effect specialist forwarders.

Walter
 
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Walter Hay

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Speedway Pass
Sep 13, 2014
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World citizen
China-Europe Rail Freight Increases.

The Chinese government from the beginning of the operation of the China-Europe part of the New Silk Road has been subsidizing rail freight, but the cheap rates will be slowly increasing in 2022 and 2023.

Due to the importance of the rail network’s success as the flagship policy of Beijing’s Belt & Road Initiative the subsidies were very generous, reaching as high as $5,000 per container. They have already been reduced to about $1,000, but the plan is to eliminate them by the end of 2023.

The subsidies, provided largely by the Chinese central government, but also contributed to by some regional governments, have been a major factor in growing the rail freight business over the past 5 years.

China-Europe freight rates are still high at around $13,500 per 40ft container.

Walter
 
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Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
12,906
World citizen
COVID LOCKDOWNS AFFECTING VIETNAM

In a recent survey conducted by the American Chamber of Commerce in Vietnam (AMCHAM), labor shortages ranked high in the reasons for limiting prospects for reopening, recoevry, and rebound in manufacturing.

To help understand why Covid is having such an impact, here is the Vietnamese Government procedure in dealing with cases and contacts: Once a case is identified, it is characterised as F0. Anyone who has had direct contact with an F0 becomes an F1 and is quarantined in government facilities - either military barracks set up for this purpose or hospitals.

In order of significance, the survey showed that the labor shortages have been caused by:
  • Workers returned to home provinces
  • Schools are closed and parents are struggling with managing work and online learning
  • Complicated procedures for Foreign Experts
  • Workers, even those who live nearby, are hesitant to return to the workplace
While this information relates to American companies manuFacturing in Vietnam, it gives some idea of the reasons why importing goods from Vietnam is currently a difficult proposition.

Walter
 
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Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
12,906
World citizen
FREIGHT FORWARDER RECOMMENDATION for these difficult times

I have often been asked to recommend a freight forwarder, and have always been reluctant to do so, but today, due to the difficulties being experienced by importers in even managing to get a freight booking, I am making such a recommendation.

C.H. ROBINSON This company is one of the world's largest logistics businesses. They are US based, but operate worldwide. They won't be interested in small shipments, but if your need is to transport at least 400 to 500 lbs (200k +) they will probably help you.


UNIVERSAL CARGO This company operates worldwide, with representatives in all major ports. Many of my book users tell me that they are very pleased with the company's personal service.
Although they handle any size shipment by sea or air, currently they are advertising:
"Universal Cargo's Express4service ships 25kg to 100kg packages from anywhere in the world to anywhere in the world in 3-5 days for most destinations. Including door pick-up, customs clearance, and door delivery, Express4Air is a quick, simple, and complete service."

Please note that both companies can help importers in almost any country. They are not limited to their home base.

Walter
 
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Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,263
12,906
World citizen
ROAD FREIGHT OPTION CHINA/EUROPE
A question in another thread prompted me to report on a lesser known freight option, which is road freight from China to Europe.

It is not new, having begun in 2018. If you have a good logistics provider or a very astute freight forwarder, they would have suggested this option as air, sea, and rail freight began to encounter delays and shortage of capacity due to Covid.

Road freight from China to Europe was not possible until 2016 when China became part to the TIR Convention. but it was not until 2018 that the first shipment under the agreement took place from the Netherlands to China.

The TIR Convention was established in late 1975 to simplify the formalities of international road transport. A valuable aspect of the TIR agreement is that goods must be transported in sealed vehicles or containers. This means they are not subject to inspections at border crossings along the route.

TIR freight is common between countries in Europe, and in North and South America, but availability of road freight to and from China is a big plus in these difficult times.

Walter
P.S. TIR rules can apply to shipments via more than one mode. For example Road+Sea+Rail to carry a single shipment.
 

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