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Cargo transportation from China: recession‘s influence on prices (part II)
2010-08-05 14:58:00
Transport companies, cargo, cargo transportation, full container, port, transportation, cargo transportation China, sea container, container, transportation terms, transport, sea transport, shipping company.

Transport companies, which organize cargo transportation from China to Lithuania, have noticed that the worldwide recession has mixed up previously stable prices and lengthened the time needed for cargo transportation.

Price deciding factors

“Most frequently we transport our cargo in high cube containers under FOB terms from the port of Ningbo. Prices differ significantly. They used to be up to 2000 USD per full container, now it is around 4000-5000 USD. The prices are not fixed. Each time the price is determined by negotiating, storage, loading time, and, of course, the situation in the market at a certain moment”, - told Mrs. Jolita Skirijotienė.

The fact that prices are dependent on many factors is also confirmed by other transport companies to whom free cargo transportation from China is a daily task. “It even depends on the port from which the transportation is carried out. For example, cargo transportation from Shanghai will be significantly cheaper than from other, less popular ports”, - explained T.Abramavičius, expert of cargo transportation from China and Far East.

The price is also determined by the client‘s ability to fill a sea container, the size of the container and the weight of the cargo. There are three main types of sea containers: 20 feet, 40 feet and HQ (high cube). “There are preset standard prices for containers but transport companies apply weight limits for 20 feet containers, which, if exceeded, are additionally charged from 50 to 150 USD. It is very important that the client specifies transportation terms (FOB, CIF, etc.) for the transport company which organizes the cargo transportation”, - Mr. Abramavičius noted.

In conclusion, concrete prices are set individually in each case considering the terms in which free cargo is transported. According to Mr. Abramavičius, one of the lower prices this month for cargo transportation from Shanghai to Klaipėda under FOB terms would be 2400 USD for 20 foot container and 4200-4300 USD for 40 feet and HQ containers.

Recession‘s influence

The experience of transport companies shows that prices have been significantly altered by the worldwide recession. “When the economic crisis began, the prices of cargo transportation by sea transport from China have decreased radically. However, they are now increased by up to 300-350% compared to the beginning of 2009. The prices are also changing about two times per month”, - told the project manager of UAB “Transtira”.

Mrs. Skirijotienė, who orders goods from China several times a year, says that not only transportation prices have changed recently but also the time needed to cargo transportation. “Cargo used to reach Lithuania in 28-35 calendar days but we have recently switched to another transport company so the time needed for transportation increased. Despite that the company says that the cargo will be delivered in 38-45 days, it usually takes about 50-55 calendar days. This is a big problem, but as the shipping company let us know, there is nothing much we can do about it”.

Mr. Abramavičius describes recession as one of the reasons for increased cargo transportation time: “Cargo transportation time depends on the shipping company – some of the companies sell their services more expensively than others but their ships sail faster, while other companies are cheaper but goods are delivered slower. When the recession began, many shipping companies ordered their ships to sail at reduced speeds, because even a slight decrease in speed saves tens of thousands of gallons of fuel”.

Currently cargo transportation from Shanghai to Klaipėda takes from 35 to 60 days.

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