The coronavirus pandemic early last year drastically curtailed all economic activity in China. It also had an inevitable impact on logistics, which continues to this day. After a sharp fall in logistics activities in the spring and the disruption of transport chains, transport capacities are becoming scarcer. In practice, this only means one thing. We will wait for the package a few more weeks. And that won’t change.
“We expect the maritime situation to calm down as demand declines and cools after the Chinese New Year 2022,” predicted David Knobloch, logistics specialist at Geis.
Although production in Chinese factories has returned to its original capacity quite quickly and China’s logistics industry is also recovering rapidly, problems in transporting goods from China to Europe still persist.
All pre-coronary transport links have not yet been fully restored, and many complications with various anti-epidemic measures have returned with the onset of the second wave in countries along the transport routes and in destinations.
An example of what may currently be affecting cargo delays is the world’s busiest container port, Jen-tien, which literally beat another coronavirus outbreak among its staff at the end of May this year. The port had to stop receiving loaded export containers.
According to David Knobloch, it took about a month for employees to return to work. “The reopening only took place on May 31 with a very limited capacity, which was about a third of the normal capacity. Now, after a month of restrictions, the port is operating again without restrictions,” says Knobloch for SZ Business.
During this time, however, according to his information, there were huge traffic jams, when up to 40 container ships were moored in front of the port. Some shipowners have stopped using the port altogether and have chosen surrounding ports as an alternative, even with the hurdle that this will again affect transport times and congestion.
The situation is still not good and we anticipate that it will take several weeks for stabilization to take place.
“We can expect that this will again lead to a further deterioration in the quality of timetables, which are already difficult to respect at present. The quality of reliability thus decreases again”, comments David Knobloch.
And coronavirus restrictions aren’t the only problem facing the transportation chain. Significant delays may also occur in response to technical faults. In addition to the several days of blockage of the Suez Canal in the spring of this year, there is, for example, a faulty maneuver in the Taiwanese port of Kaohsiung, which damaged two gantry cranes and again reduced the operability of the port. .
The pressure on prices is enormous. Order of Shipowners
“Given the continued difficulties with container shortages and maritime capacity issues, we are concerned that the situation in Yenchien and Kaohsiung will exacerbate the problems with a direct impact on rising transportation prices,” the official said. logistics specialist.
According to current developments, this situation is fully utilized mainly by shipowners, who are currently “in control” and making historically record profits. Following the constant increase in maritime tariffs and the introduction of various surcharges, they were able to earn more in the first quarter of 2021 than in the whole of 2020.
The average gross margin of some shipowners was 38%. For some, up to 44%, which represents, for example, the best shipping company Maersk Line, a gross profit of around 2.7 billion dollars in the first three months of 2021.
China-Czechia by truck? Faster than ships
But it’s not just shipping capacity issues. Air transport has also declined, rail capacity is limited and the lack of suitable wagons forces a search for new transport options. One of them is the use of truck transport for the direct transport of tractors from China to the Czech Republic.
Some companies have taken this route. And how does this transport take place in reality? One of the first rides was organized by Geis.
“We had the goods loaded in Changzhou, which is located on the East China Sea. The entire transport took place in such a way that two drivers left the place of loading. They drove 24 hours on 24 through China to a warehouse in eastern Kazakhstan. Here the cargo was transferred to another semi-trailer, with which the next crew continued through Russia and Belarus to the Polish city of Malaszewicz A transit document to the EU was secured at the European Union border and the truck continued to its destination at the customs office, where the consignment in the Czech Republic was cleared and then has reached the customer”, describes David Knobloch.
The logistics group Geis is headquartered in Bad Neustadt, Germany. The group is owned and operated at all times by the Geis family. It currently employs around 6,100 people and in 2020 achieved a turnover of 1.002 billion euros.
The group includes companies in Germany, Switzerland, Luxembourg, Poland, the Czech Republic and Slovakia.
The goods were delivered to their destination in the Czech Republic on the 19th day after the start of transport, since the 9800 km long route was recovered. By default, the transport would take 14 to 16 days, including about three days of waiting at the European Union border.
However, due to the situation with the covid-19 pandemic, the second tractor remained in the column for seven days crossing the border from China to Kazakhstan, where the second wave of coronavirus had just broken out. It was possible to continuously track the shipment online using GPS throughout the transport.
In recent months, this type of transport has gained in importance because, according to the International Road Transport Union (IRU), door-to-door transport costs are halved compared to air transport, even if you have to hire two drivers. Unlike road by rail, the goods can be delivered a few days earlier.
Very little used road transport from China, but it is an interesting alternative for certain types of goods.
“The transport of goods from China by road is still very little used, but it is an interesting alternative for certain types of goods. In cooperation with one of our customers, we have tested it and, despite some problems expected at certain borders with regard to anti-pandemic measures, we have fully proven this and we can provide it to our business partners,” says David Knobloch, Public Prosecutor Geis CZ Air + Sea.
DB Schenker also offers the same variant. It introduces a transport alternative precisely because transport by rail and sea terminals is no longer sufficient to meet demand.
A route of more than 13,000 kilometers between China and the Czech Republic passes through Kazakhstan, Russia, Belarus and Poland. In China, the shipment is first arranged by a local carrier who brings the shipment to the border with Russia. There, the goods are transferred to a truck within a day via a customs warehouse. He will then deliver the goods to the Czech Republic for unloading at the customer.
The company provides international cargo transportation in the form of road, rail, air and sea transport, has been operating in the Czech market since 1991, has 2,200 employees and 22 workplaces.
The DB Schenker network is present in more than 130 countries and employs more than 77,000 people.
The standard transport of a volume of 33 pallets with a maximum weight of 22 tonnes takes two weeks. According to the logistics company, customers should only rely on booking a transshipment slot at the border about two to three weeks in advance.
A special moment demands a non-standard solution. Due to the use of the usual transportation routes from China, this market is attracting great interest in the market.
“Special times call for non-standard solutions. Due to the use of the usual transportation routes from China, this market is attracting great interest in the market. We hope that the line of trucks from China will be part of the ‘standard offer, which will partly facilitate the flow of goods from all over Southeast Asia to Central Europe,’ said DB Schenker director in the Czech Republic, Tomáš Holomoucký.