Written | Nandu Weekly reporter Zhan Danqing
Edit | Yang Wenjin
(Photo by Sun Hai)
Several container ships lined up in The Bay of St. Pérode.
Located on the Pacific coast of California, St. Pedro Bay is home to the Ports of Los Angeles and Long Beach, and is the busiest port in the Americas.
According to data from the Southern California Ocean Exchange, on December 17, local time, only 23 ships were waiting to berth, and 72 were wandering in the waters 50-150 miles away. Ships sailing from Asia deliberately slowed down to delay arrival times.
The container ships floating at sea were filled with all sorts of goods, some of which were supposed to come ashore before Christmas.
Many toys from Chenghai, Shantou, Guangdong Province, are also on these boats. "I'm afraid I won't be able to catch up with this year's Christmas season." Ji Huilin couldn't help but sigh that she had been engaged in the toy trade for more than 20 years, and this was the first time she had encountered this situation.
Ji Huilin is the general manager of Shantou Chenghai District YanyangChun Trading Co., Ltd. (hereinafter referred to as "Yanyangchun"), the company's main toys, gift products. In September she delivered a shipment of Christmas gifts to the freight company, but until now there are still some floating at sea...
There are long queues at the port, and the cargo schedule is extended indefinitely
This is not just the case in U.S. ports. Ports in South America and Europe have experienced different degrees of congestion, and some container ships in Shantou and Shenzhen have failed to depart on time.
Toys and gifts are large in size and small in value, so toy manufacturers usually use low-cost, large-load shipping. In previous years, during the Christmas season, sunny spring festivals will deliver goods before the end of August, but due to port congestion, most of the toys and gifts of sunny spring are not loaded on the ship until mid-October this year. Even in December, there are scattered goods to embark on a journey across the ocean.
Ji Huilin told Nandu Weekly reporter, "Due to the small number of container ships and the congestion of the terminal, many goods cannot be sent out in time." Some goods have been extending the transit time, but the factory has already prepared the goods, the order can not be cancelled, can only be shipped late. ”
Shipping delays are being significantly longer. Ji Huilin revealed that in the past, goods shipped from Shantou to the United States can be delivered to buyers in about 20 days, "This year, 60 days may not be able to receive, long-term transportation will have transit ports, often the transit ports are a little congested, the purpose of the port loading and unloading is a little slow, lack of trucks, trailers and so on." Previously arriving times were not a few days apart from the forecast, but now they are completely unpredictable, ranging from one month to three months. ”
Ji Huilin estimated that some toys have not been able to catch up with this year's Christmas season, and can only be given to customers as inventory for next year, and a small number of orders have been cancelled directly by customers.
As for the reasons for the slow transportation, A Liu, business manager of Shantou Chenghai District Pan Asia Toys Co., Ltd. (hereinafter referred to as "Pan Asian Toys"), analyzed with reporters, "Because of the epidemic, all ports around the world have to disinfect, test, and isolate goods, and even the United States is basically delayed by one month due to insufficient manpower." ”
A cabinet is hard to find, and the price of shipping has soared tenfold
Ah Liu has been in the industry for more than 30 years, and for the first time, he has encountered such an extreme situation in the sea, and the freight rate has risen so sharply.
Ah Liu is a Taiwanese who has been in the toy trade industry since the 1990s, and has spent many years in Brazil, Peru and Chile, and people in the industry call him "Brother Six".
In order to save costs, Pan Asia Toys chose to use freezers to transport toys to South America, A Liu said, "After the freezer comes to China, when they return to South America, it is usually empty, so they will be cheaper for us to load goods to South America, and then load frozen food to China after unloading." Previously, 58 cubic meters of freezer freight was a few hundred dollars, and now it costs $12,000. ”
The average container freight rate on the North American line is even more amazing.
Ji Huilin said that before 2020, a 40-foot high container shipped from Shantou and Shenzhen to the United States will have a shipping price of about $2,000, and the off-peak season will fluctuate slightly, and the highest will not exceed $2,500. But since the second half of 2020, sea freight prices have been rising, especially since 2021, the price has soared, peaking in June 2021 at about $25,000, after which prices have fallen back to about $20,000 now.
This statement has been endorsed by many toy traders.
The problem isn't just about price increases. They say bluntly that before December, it is often difficult to find a cabinet, even if the price is increased, the goods may not be able to board the ship in time, unless you have a good friendship with the freight company.
The capital of toys, the double heaven of ice and fire
In previous years, in order to welcome the Christmas carnival season, orders from The Americas and European countries would fly to Chenghai like snowflakes in January and February, and some anxious customers would even place orders in advance to November and December of the previous year.
Shantou Chenghai District, the location of YanyangChun and Pan Asian Toys, is located in the east of Guangdong Province and the mouth of the Hanjiang Delta, known as the "Capital of Toys and Gifts in China". According to the data of Guangdong Toy Association, in 2020, the export volume of Guangdong toys was 13.385 billion US dollars, accounting for 70% of the total national toy exports, of which Chenghai's export value reached 2.077 billion US dollars.
June, July and August are the busiest season for toy factories and trading companies on the Chenghai side, busy with production and delivering goods. However, this year, many buyers have stopped to wait and see the change in freight rates, like the Sunny Spring Christmas season orders are delayed until March and April, fortunately, the number of orders from European and American countries has not decreased.
However, there are also some buyers who really can't wait and cancel the order, but the factory generally prepares the goods in advance, which leads to a backlog of goods. Ji Huilin said that the cancelled orders of the Chenghai factory are generally from large customers, who enjoy preferential payment terms, no deposit, and the payment period is 60 days and 90 days. "Customers have also had a hard time this year, Christmas is coming and a whole bunch of their cargo is still floating at sea or piling up at the docks. And, freight rates are growing so much. In this case, you can't be inconsiderate of the customer, if you have to pay the other party, you may not have to cooperate with this customer in the future. ”
For many toy factories in Chenghai, this year's day is a double day of ice and fire.
Lin Duo, secretary general of the Guangdong Branch of Shenzhen Cross-border E-commerce Association and deputy general manager of Bao'ao City of the professional toy market, told Nandu Weekly that this year, Chenghai's research and development strength is strong, the product quality is excellent, and the brand influence of toy companies, the order volume has not decreased, but increased. "However, there are more small and medium-sized toy companies in Chenghai, and the overall toys are in the middle and low end, and the impact of the epidemic is indeed relatively large, the order volume has declined, and some small factories have even closed down."
Pan Asian Toys this year's overall export volume increased by nearly 40%, its products are diverse, there are toy cars, educational toys, remote control toys, etc. This year's Christmas season, children's home toys are welcomed by overseas customers.
Pan Asian Toys exports overseas toys, this year's home-based toys (right) are welcomed by customers.
Ah Liu said, "In 2020, many buyers did not buy too much goods, and all the goods purchased in 2019 were sold out, so this year they increased the purchase volume, no matter how expensive the freight is, they still have to buy goods." ”
In 2020, the export volume of YanyangChun is close to 12 million US dollars, and Ji Huilin expects that the overall export volume will increase slightly this year, with an increase of no more than 10%.
However, Ji Huilin revealed that this year they wanted to find some toy factories in Chenghai to cooperate, but they called and found that the other party had stopped production. Toy shows that can reach new customers have been cancelled due to the impact of the epidemic, which has little impact on large factories, but for small factories, it has become more difficult to meet new customers.
What will happen next? No one knows
Next year's market situation will also be clouded by the chain reaction caused by port congestion.
At present, the doubling of the cost of shipping is generally borne by overseas buyers, but the value of toys and gifts themselves is low, and if the retail price rises sharply, it is likely to affect the overall sales volume, thereby affecting the buyer's purchase quantity in the second year.
Ji Huilin once asked a number of customers about sales, "Customers said that they had to wait until the hottest Christmas was over, and then look at the overall sales." After the price adjustment, they have no bottom in their own hearts. If the price suddenly rises by a few tens or even doubles, it certainly won't sell that much, so they have to balance. You can have a business without losing money. ”
These overseas customers are also a little confused about how to place orders next year: how much inventory will be left this year, how will the shipping situation be next year, whether the purchasing power of the market can be maintained... All of this is unknown.
For manufacturers of large and small toy capitals, the challenges are much more than that. Rising raw material prices and rising labor costs are also bothering them.
Zhou Miaoyun, the owner of Chenghai Huicheng Toy Company, told reporters that the prices of RAW materials SUCH, PPE, carton cartons, screws and other raw materials for the production of toys this year have climbed by about 25%, of which chips have the highest increase, nearly 30%. Huicheng toys mainly feature toy guns, electric toys, gyroscopes and so on.
A Liu said that the production of toys electric vehicles, remote controls, sounding toys need chips, Chenghai chips are generally purchased from Taiwan, but this year Taiwan chip purchases decreased, can only be purchased in Shenzhen and other places, chips are often out of stock.
Labor costs are also rising. Zhou Miaoyun's Huicheng Toys has more than 100 employees. So far this year, the wages of workshop workers have risen by about 33%.
Huicheng Toy Factory. (Courtesy photo)
Although the production costs of raw materials and labor have risen by about 30%, the ex-factory price has only increased by about 20%, and Zhou Miaoyun said that the overall profit of the factory has actually fallen by 5%-8% this year.
Find another way out and try cross-border e-commerce
In the face of the increase in uncertainty of overseas orders next year, the restriction of foreign customers entering the country, and the reduction of toy exhibitions, some toy companies in Chenghai have begun to try to explore export to domestic sales. However, this transformation is not easy.
"If the company itself does not have a deep domestic channel, it is difficult to find domestic customers at once." Now Chenghai does have some companies trying to sell domestically, such as doing e-commerce live broadcasting, or supplying to e-commerce companies, but it is generally not ideal. This requires a process that cannot be achieved overnight. Lin Duo said.
Ji Huilin also pointed out that the products of different factories have different market positioning, target groups, domestic and foreign demand is not the same, and the capacity of the domestic market is also limited, if suddenly increase the number of factories several times to squeeze the domestic market, business will certainly be more and more difficult to do, "the market purchasing power can not increase a lot at once." ”
Some toy factories are also trying to lay out cross-border e-commerce.
On December 11th, the 4th Global Cross-border E-commerce Festival was held in Shenzhen, and the Guangdong Branch of Shenzhen Cross-border E-commerce Association, as a joint organizer, organized and planned the No. 2 Guangdong East Industry Pavilion, gathering toys, gifts, household products and other enterprises to participate in the exhibition.
2021 Shenzhen cross-border e-commerce toy selection meeting. (Photo courtesy of Guangdong Branch of Shenzhen Cross-border E-commerce Association)
According to data provided by the Guangdong East Branch, when chenghai participated in the global cross-border e-commerce festival for the first time last year, only 50 or 60 companies participated in the exhibition, and about 400 companies participated in the exhibition this year.
Lin Duo said, "We organized a group to participate in the exhibition, but also to help enterprises to broaden the sales channels and customer groups, rather than just docking the original traditional buyers, after all, many foreign companies can not come to China under the epidemic." Cross-border e-commerce is now also defined by the state as a new format of foreign trade, and we usually organize cross-border e-commerce toy selection matchmaking meetings from time to time. ”
In 2020, Chenghai toy professional market Bao'ao City also set up an e-commerce talent incubation center, Lin Duo said that Chenghai's toy industry, the advantage lies in the supply chain, production technology and processing and manufacturing, but in cross-border e-commerce talent is extremely scarce. "We help companies solve this problem through cooperation between education and enterprises."
Toy Selection. (Photo courtesy of Guangdong Branch of Shenzhen Cross-border E-commerce Association)
Zhou Miaoyun's factory has been working with traditional trading companies since its inception in 2006. In 2019, they began to try to supply cross-border e-commerce merchants, and at present, revenue from cross-border e-commerce accounts for one-third of the total revenue.
Ji Huilin's toy company only began to try cross-border e-commerce in 2020, and the proportion of revenue from cross-border e-commerce is still low. However, she has clearly felt that since the beginning of this year, many toy manufacturers are crowding on this road, the competition is becoming more and more fierce, and when the freight rate is high, the merchants are still obtaining customers by undercutting prices.
The new year is coming, and Ji Huilin feels very dazed. "We plan for the second year every year, but this year, I don't know what to do. I will tell the staff that everyone should be prepared to adapt to the situation, we must react quickly, what situation occurs, we must immediately come up with a way, the stop should be stopped, the order should be cancelled. ”
Ah Liu is different, and the newly opened mask line in 2019 has brought him a windfall. In 2021, the number of masks exported by their company has reached 8 containers, with an income of about four or five million yuan. A while ago, the bubble machine shipped to South America, some customers have sold out, Ah Liu said, "I will increase (shipments) next year, I believe that next year the market will be better." ”