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Where does domestic container shipping go from here?

Time:2019-12-10 17:05:57   Reading:3389


Following the closure of a number of domestic container shipping companies such as Nanqing, Gangtai, Hainan Fanyang, etc., on June 24, Yangpu Zhongliang Shipping Co., Ltd. (hereinafter referred to as "Zhongliang Shipping"), which has been on the cusp recently, issued four announcements , Announced that due to the continued slump in the domestic shipping market, increased competition in the industry, increased production costs and other reasons, the company suspended all routes on June 25.

After insisting for nearly 15 years, Zhongliang Shipping finally fell, and the chaos in the freight market caused by it is also being staged ...

Fund Broken Link
Zhongliang suspends route operations
Founded in 2004, Zhongliang Shipping is an early liner company engaged in domestic trade container shipping. It currently has 20 coastal arterial routes, nearly 30 ships, and a total capacity of 600,000 tons. Its business network covers the Pearl River Delta, the Yangtze River Delta and the Bohai Bay Rim. It is one of the domestic shipping giants.
Recently, the industry has begun to spread the news that Zhongliang Shipping is not doing well. For this reason, on June 3, Zhongliang Shipping issued a statement on its WeChat public account, condemning the bad remarks on operating issues, and informing the company that its operations were stable and normal. On June 4, Zhongliang Shipping announced that it has entered into a comprehensive strategic partnership with Shenzhen Huihong Shipping Co., Ltd. to jointly operate the domestic coastal container transportation business with a total investment of 120 million yuan. At this point, the discussion about Zhongliang Shipping's poor management has been subsided to a certain extent.

But on June 13, a paper announcement in Ningbo Zhoushan Port pushed it to the forefront. The announcement stated that the customer was required to pay a deposit when the owner of the container at Ningbo Port was Zhongliang Shipping's heavy container. Subsequently, Rizhao Port, Tianjin Wuzhou Wharf, Guangzhou New Port Dongjiangcang Wharf, etc. have successively issued announcements on deposit and luggage, and many ships in sailing also refuse to berth and unload.

On June 24, Zhongliang Shipping issued the "Announcement of Suspension of Airline Operations", "Letter to All Employees", "Notice on Stopping the Circulation of Containers of Yangpu Zhongliang Shipping Co., Ltd." and "Requirement to Return the Containers of Yangpu Zhongliang Shipping Co., Ltd." Four announcements, including the Notice of the Dockyard, announced that the Chinese shipping company, which had been in operation for nearly 15 years, suspended all routes on June 25.

Zhongliang Shipping said that in the face of the outage of the route and the increasingly severe operating situation, customers and all employees have given strong support and trust, and conducted a rescue operation of the route reinstatement. After difficult discussions, it was helpless to reorganize the plans and resume operations. Navigation conditions vary widely. Therefore, they had to announce: "Yangpu Zhongliang Shipping Co., Ltd. will temporarily suspend the operation of the route from now on."

According to other media reports, once Zhongliang Shipping declared bankruptcy or the company was dissolved, the handling of the detained containers will be deprived of authorized entities and the picking up will be confusing. Therefore, the content of the final announcement adopts the term “suspended route operation”.

Low price competition
"Drag" family after family
How much debt does Zhongliang Shipping owe to each terminal? According to external estimates, the total amount of Zhongliang Shipping's arrears is about 320-400 million yuan, of which the amount owed to the terminal is much more than other arrears. Damage "initiatives.


So why did Zhongliang Shipping break the capital chain? The industry speculates that the butterfly effect caused by the excessive collection of a certain barge's account is the trigger of Zhongliang Shipping's crisis, and the shipping market is sluggish. There is only one domestic shipping company each year. Making money every month is the main reason behind.
At present, the freight index is at the historical bottom. Although the increase in the size of ships can reduce the operating costs of shipping companies, the current freight rates are not enough to cover the operating costs of shipping companies, and the losses of shipping companies are common. According to insiders, in good times, domestic trade shipping companies earn only two months of the twelve months a year, and now they earn only one month a year.

"I do n’t know when the low-price competition started. The competition of domestic trade consolidation has become a naked low-price competition. This also has the previous experience of the development of foreign trade consolidation. Fifteen years ago, the freight rate of the Shanghai-Japan route competed as negative freight. The author, whose pen name is Lusheng, stated in the article "Eight Questions of China Domestic Trade Consolidation" that although Zhongliang's failure has its own reasons, the competition in the domestic trade consolidation market is "only lower, not the lowest." The cost has been upside down for a long time, and it is also a drag on one domestic trade container ship owner.

If Zhongliang Shipping fails, the terminals, freight forwarders, and cargo owners that it previously worked with will be greatly implicated-
For the port terminal, once the box is picked up, the terminal fee, storage fee and barge fee cannot be recovered; and for the container leasing company and financial leasing company, it is not only unable to recover the arrears of rent and repair fees from the shipping company in a timely manner. Debts may also bear the cost of recovering assets. Once the owner of the ship, boxes and other assets are seized, it is equivalent to the seizure of goods, and the costs such as time and expenses in the process of picking up the goods will also increase ... The fall will certainly bring a wave of shocks to the industry chain.

Experts call
Innovative mechanism allows companies to exit decently
In the past, there was Nanqing, followed by Xinmin Airlines. The situation of Zhongliang Shipping's poor operation and high debts is a microcosm of the domestic domestic trade industry. Although the overall freight demand for domestic trade consolidation is growing, the domestic trade consolidation industry is facing greater challenges in the face of the dual pressure of falling freight rates and rising fuel oil.

At present, the fundamental reason for the price war in the domestic trade industry is the imbalance between supply and demand in the market. "Of course," the boat with water "promotes the prosperity of the market, but its side effect is overcapacity. For such a long period of market downturn, business owners have still adopted a low-cost competitive strategy that has been effective and it is difficult to reproduce the good market The market share obtained by low-price competition will not wait for the spring of the market. "Xie Yan, a researcher at the Institute of Water Transport Sciences of the Ministry of Transport, said.

In addition to the reasons for the domestic shipping companies to seize market share, expanding capacity, new routes, and low tariff competition, etc., in order to achieve performance and achieve port throughput, the measures of giving ports to shipping companies for a long period of time are also Hidden dangers are laid by the trade consolidation.

How should the industry cope with the sluggish market period? Xie Yan said that from the Zhongliang incident, what should be done now is to allow enterprises to have a proper exit mechanism when they are unable to operate, instead of using local government blood transfusions to let "zombies" The “enterprise” is a respect for the companies that operate better in the market.

At the same time, with the increasingly weak role of industry authorities in capacity control, the areas that can be improved at present are under the guidance of industry authorities, allowing scientific research institutions in the industry to release dynamic market information and annual The report allows practitioners to obtain information on market supply and demand relationships and avoid blindly increasing capacity. "The 'Water Transport Market Development in 2017 and the Outlook for 2018' issued by the Water Transport Bureau of the Ministry of Transport in May this year is a good start for government information disclosure, which will help guide market trends and everyone's investment impulse."

Regarding how domestic trade container enterprises can achieve self-renewal, Xie Yi believes that it is necessary to build core values and innovate to overcome the key measures of aging supply. "The core value is an improvement in spirit. The behavior of ports, freight forwarders, practitioners, business owners, etc. will change, the positive energy of the industry can be promoted, and synergy can be formed within the industry to promote the formation of a healthy market environment; in addition, in In the new era, there is no way out for low-price competition. Water transport companies must find a path in the supply-side structural reforms, and through technological innovation and model innovation, launch a completely different supply than in the past and regain the market. "

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