Fluctuations in rates and new rules of the game: what's happening in the market

Fluctuating freight rates, restructuring of traditional routes, and changing shipping conditions have significantly altered the international logistics market in recent years, forcing businesses to be more careful when choosing their logistics partners. At the same time, export and production ties between importing companies and the Chinese market remain very popular for businesses worldwide.

Why is the freight rate constantly changing?

The cost of international delivery is not fixed, as it is influenced by several factors at once:

• seasonality of trade: on the eve of holidays and big sales, transportation volumes increase, which leads to an increase in rates;
• Port and vessel congestion: the higher the demand for transportation, the more expensive the freight becomes;
• fuel costs: fluctuations in fuel prices directly affect the tariffs of shipping lines;
• changes in logistics routes when carriers have to use alternative routes; 
• global economic situation: international trade directly depends on the global economy and the geopolitical situation in the world.

For example, during periods of high demand, container lines may increase rates, while during quieter periods the market stabilizes and rates gradually decrease.

Cargo deliveries from China: main methods and formats

The most popular way to transport cargo from China remains sea shipping, as it allows you to transport goods of various volumes - from 500 kg as part of groupage cargo to full loads of 20- or 40-foot containers - at optimal cost over long distances.

The two main formats of container transportation, which are the basis of world trade, are:

1. FCL (Full Container Load) – a full container for one shipper for large consignments of goods, regular deliveries and cargo with special placement requirements.
2. LCL (Less than Container Load) – a container for: small consignments of goods from 500 kg, small and medium-sized businesses, test deliveries of products. In this case, several cargoes from different clients are combined into one container, which significantly reduces the cost of transportation.

But modern logistics is almost never limited to sea delivery: in most cases, a multimodal transportation scheme is used, which combines several modes of transport. Such a system allows you to effectively optimize transportation costs, flexibly change routes, and accelerate transportation depending on the market situation.

At the same time, the terms also depend on the route, type of delivery, final destination, port congestion, weather conditions, speed of customs procedures and seasonal market fluctuations (on average, they are: in the China-Europe direction approximately 40-50 days, and from China to the USA - about 30-40 days).

New rules of the game in the logistics market and how to deal with them

As we can see, today logistics requires much more flexibility from companies, since the successful organization of international transportation depends on the ability to adapt quickly enough to changes in the market.

In modern conditions, the following play an important role:

• the presence of a partner network and offices in different countries,
• experience working with international routes,
• constant monitoring of freight rates,
• the ability to quickly change logistics schemes. 

Thanks to all of the above, Mitridat, as an experienced logistics operator, can offer customers optimal routes, favorable rates, and stable delivery times.

So, for companies involved in imports, several key conclusions can be drawn:

• cargo delivery from China remain a truly profitable solution for purchasing goods;
• freight cost depends on many factors and can change, so it is important to plan deliveries in advance;
• competent logistics helps reduce costs and minimize risks;
• Cooperation with an experienced logistics partner allows you to secure cargo and ensure stability of supplies.