Freight rates have increased by 20%! There are widespread delays in the delivery of goods in the United States

Freight rates up 20%, widespread delivery delays in US

Starting from June, shipping prices from the US have quietly increased by as much as 20%. The price hike will continue, and shipping fees from the US to all channels may also see an increase.

The aftermath of UPS’s strict crackdown on fraudulent accounts continues to unfold, and with the implementation of four new pickup rules, there is widespread delay in deliveries in the US, with logistics delays expected to last up to two months. At the same time, Amazon’s delivery time is also decreasing, and various logistics difficulties are not only increasing seller costs but also affecting cross-border seller orders.

Delivery time of two months, massive delays in US end delivery

Recently, many sellers have reported that there are widespread delays in US end deliveries, with almost everything being thrown into chaos.

One seller said that it usually takes about 20 days to enter the warehouse, but now it’s been a month and it still hasn’t entered the warehouse. Another seller who shipped goods to the US encountered an inspection by US Customs and Border Protection, and the goods shipped on April 21 had not been delivered to the warehouse by early June. Furthermore, the chances of being inspected by US Customs and Border Protection are high these days. Many sellers have encountered the same problem: they do not know where the goods shipped to the US in April are now.

“On April 29, I instructed a batch of goods to be delivered to an Amazon warehouse using UPS, but as of yesterday, the final tracking number has not been issued,” said a seller who seemed helpless. It is understood that many overseas warehouses are using fraudulent accounts, which have been blocked, making it impossible to generate tracking numbers. As a result, many goods are stuck in overseas warehouses.

UPS is strictly cracking down on fraudulent accounts, which is causing a significant delay in delivery of goods. It is reported that approximately 360,000 packages are currently delayed in the US, waiting for UPS tracking numbers to be updated. Due to inaccurate POs in many accounts, it is common for scheduled tracking numbers to be cancelled, especially in some popular FBA warehouses, resulting in many goods being stuck and unable to be delivered normally.

Currently, there are multiple popular FBA warehouses that are experiencing overstock, congestion, and difficulty with scheduling appointments. According to freight forwarders, ONT8 and LAX9 are experiencing difficulties with overstock and scheduling appointments; LGB8, SMF3, SBD1, SCK4, GYR2, and LAS1 warehouses are congested and experiencing difficulties with scheduling appointments; GYR3 is experiencing crazy appointment scheduling delays; HDW2 warehouse is congested; FTW1, IND9, and MEH1 are normal.

The return to normalcy of popular warehouses like FTW1 has been felt by some people. One seller stated that Amazon’s receiving, listing, shipping, and delivery times have finally returned to normalcy in the past week.

Some freight forwarders have notified their clients of the following: ocean freight prices have increased, overseas warehouses are overstocked, appointment scheduling is difficult, UPS pickup times are slow, and delivery is unstable. Currently, the general lead time is over 30 days. If the problem cannot be resolved in the long term, peak season lead times may return to 2 months, as they were 2 years ago.

In addition, Amazon’s delivery times have also been extended. In June, many sellers found that Amazon’s delivery time had been extended from 2-5 days to 10-15 days. When there is sufficient inventory, the deterioration of delivery lead times directly affects sellers, causing a sharp decline in their order volume and ranking.

Regarding delivery lead time issues, some sellers have contacted Amazon customer service and received a reply stating that there is no problem with the seller’s product itself. The delivery time displayed on the front end usually represents the delivery capability of a warehouse near the front-end address. Since delivery or delivery capability is constantly changing, front-end information is also constantly changing, and the delivery time seen by buyers at different addresses is also different.

In order to maintain orders and rankings, some sellers have tried to improve delivery times by replenishing inventory or changing zip codes, but the problem has not been resolved.

Faced with various situations, sellers can only try to expedite their delivery plans. Currently, there are delays to varying degrees in all channels. With the outbreak of multiple conflicts, freight rates to various channels may see sustained increases.

Sea freight rates increased by 20%, and freight rates to all US channels are expected to rise

At the beginning of June, US sea freight prices had already risen. Some freight forwarders reported that the cost of transporting a full container load had increased by several hundred dollars, and the minimum receiving price per kilogram had increased by at least 0.5 yuan. The original quotation of 7.5 yuan per kilogram has now been changed to 8 yuan or 8.5 yuan.

According to news from the sea freight website, the June shipping route prices have rebounded significantly. Last week, the North American line performed strongly, with a nearly 20% increase in prices from the Far East to the West Coast of the US and a more than 10% increase in prices from the Far East to the East Coast of the US.

The SCFI freight rate index shows that the price from Shanghai to the West Coast of the US has risen by $268 to $1,666/FEU, an increase of 19.17% from the previous week. The price from Shanghai to the East Coast of the US has risen by $260 to $2,634/FEU, an increase of 10.95% from the previous week. The freight rate to the West Coast of the US has risen by nearly 20%, and the freight rate to the East Coast of the US has risen by nearly 11%!

In the opinion of experienced logistics professional Arien, this wave of price increases was not unexpected. Moreover, the price of sea freight is likely to continue to rise in the future, and an increase in sea freight rates usually signals a subsequent increase in freight rates to all US channels. The specific reasons are as follows:

Firstly, the delay at the end of the US cannot be resolved in the short term.

Currently, delays in the delivery of goods to various channels in the US are ongoing, and there are no signs of relief.

Secondly, UPS delivery requirements are becoming increasingly strict.

Previously, multiple UPS accounts of overseas warehouses were banned, and it is now impossible to quickly obtain many legitimate accounts. Recently, there have been new adjustments to the US UPS pick-up policy, which are becoming increasingly strict, including:

1. Pick-up requests must be submitted online: UPS will arrange personnel to inspect the waybills on site. After the inspection is passed, the dispatching will be resumed;

2. The pick-up address must match the account address: UPS has now stipulated that if the address of the pick-up location bound to the account is not the warehouse address, or if the shipping address on the waybill is not the warehouse address, unscanned goods will be returned. Several large accounts are currently facing a large number of returns;

3. Change the pick-up driver monthly and stop colluding in violation of regulations: In order to strictly implement the policy of binding accounts with pick-up warehouses, pick-up drivers in various regions of Los Angeles are changed monthly to prevent collusion with familiar drivers for illegal delivery;

4. Violations will result in permanent service suspension: All waybills for non-warehouse-owned UPS accounts for delivery are temporarily suspended. Otherwise, the warehouse’s pick-up business will be suspended indefinitely.

UPS is cracking down on fraudulent accounts, and about 80% of US overseas warehouses are suspected of such behavior. Among them, the field of Amazon cargo transit is particularly serious. Now that the new policy is being implemented, the impact can be imagined.

Third, the pathology of the entire logistics market.

Arien frankly said that the current logistics market is unhealthy. The threshold for entry into the freight forwarding industry is too low, and with a large number of peers entering the industry, it has become too chaotic!

Some freight forwarders offer ultra-low prices for receiving goods in order to achieve performance, and some even do it for free. How do they make money? In fact, many freight forwarders do not earn the difference in freight charges, but make profits from customs clearance, taxes, additional fees, and other aspects. This results in irregular operations such as low-price declarations, because if they do not conduct these irregular operations, these freight forwarders who offer low prices will not be able to survive.

Nowadays, with the strict investigation in the United States, these freight forwarders who engage in shady practices have no gray space to operate in anymore. What’s even more terrifying is that a tiny minority of unscrupulous freight forwarders maliciously withhold their customers’ goods under the pretext of loss. According to the regulations of American shipping, the compensation for lost goods is 20 yuan per kilogram, while for air transport, it is 40 yuan. Some high-value products that are held hostage by freight forwarders can be compensated for 20 yuan, but can be resold in the second-hand market for 100 yuan.

Furthermore, there is always a group of peers in the freight forwarding industry who are eager to make quick money and quickly withdraw from the business. After cheating their customers out of their money and goods, they change their identities and continue to scam people.

In short, as the freight rates become lower and lower, legitimate freight forwarders have no profits to earn. Some illegal practices begin to surface, and strict investigations follow suit. Under such investigations, some freight forwarders have to stop their gray operations, while others have their accounts frozen. As a result, the freight capacity of these freight forwarders drops sharply, leading to backlogs of goods and extensive delays. All these problems are interrelated and difficult to deal with!

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