24/10/2018-6

Exporters rush to ship the logistics industry first sweet and bitter

The Sino-US trade war continued, and the two sides have implemented a list of taxable products. The number of Hong Kong re-exporters accounted for nearly 5% of the total value of Hong Kong’s exports.

According to the local logistics industry, the volume of cargo orders has not decreased significantly, and the profit of shipping agents has risen due to the tight supply of shipyards. As for the impact of warehousing, the US customers have reduced the size of their positions next year, and trade wars may accelerate the transformation of the industry.

Hu Baizhen, director of the freight forwarding business international logistics, said that since the trade war, the profits of shipping agents have risen. He said that although exporters have reduced shipping orders, many cargo ships have begun to reduce the supply of freight positions, but many exporters will still be eager to ship before the end of the year, resulting in tight supply and rising shipping prices. The company has already signed a position supply contract with the shipping company, which is now becoming thirsty and the shipping agent’s order profit has increased. “There is less supply, but the demand is still big."

Worried about the labor shortage

However, he is worried that early next year may be “miserable", mainly because the exporters have already completed the shipment. After the Spring Festival, there may be labor shortages in the manufacturers and affecting production capacity. Therefore, the main challenges of the industry are expected to appear after the Spring Festival next year.

In addition to mainland exports, the company also operates Southeast Asian export freight forwarders. Since the beginning of the trade war, the volume of export shipments from Southeast Asia has increased. He expects that the freight forwarders who only operate China’s exports will be greatly affected, and the shipping costs will rise, and such freight forwarders will face a double blow. According to the industry, its business has dropped by 20% to 30%. The company will adjust its strategy for the coming year to reduce the number of Chinese export shipping positions.

Feng Zuzhong, managing director of Aoma Logistics, believes that warehousing suppliers are currently more affected by the trade war, and the company has already proposed to reduce the size of the rented space next year. However, he said that the company provides a wide range of third-party logistics services, so it is limited by the reduced demand for a single service.

As for the volume of cargo orders, there has not been a significant decrease. Exporters are rushing to ship at the end of the year. It is believed that the old warehouses are mainly affected. “High quality warehouses are still OK, but the second and third lines are decades old. The age of warehouses will be more affected." He pointed out that small-scale warehousing operators in Hong Kong have gradually transformed in recent years. For example, they have turned to upper-floor shops for rental, and their profits are better. The trade war will promote the transformation without causing bankruptcy.

Expanding the Southeast Asian market, diversifying risks

Luo Huangfeng, chairman of the shipping and China-Hong Kong freight forwarder Jinxin Logistics, said that the current 10% tax rate on the US$200 billion list of goods has no significant impact on US buyers’ orders, but with the tax rate next year. Increased to 25%, it is estimated that the impact will emerge. He pointed out that in response to the relocation of the manufacturing industry in the Mainland, the logistics industry has expanded the Southeast Asian freight market in the past few years, diversifying risks. The company’s recent Thai shipping business recorded good growth, and it is expected that the future will expand the Southeast Asian market and reduce the proportion of China’s export business.