Why Air Freight Rates from China are Rising

Nelson CabreraAir Freight, News, Shipping From ChinaLeave a Comment

China cargo plane

Christmas will be here in less than a month. Hard to believe, isn’t it?

With the holiday season just around the corner, you’re ready to take care of your final freight and shipping needs for 2015. But there’s some important information you need to know if you’re hoping to ship goods from China in the next several weeks. And unfortunately, it’s not great news. (But don’t worry — we’ve got ways to help you out towards the end of the post.)

Currently, air freight rates from China are astronomically high. Like $7 USD per kilo high, as opposed to the more regular rates of $3-4 USD per kilo. The reason for these inflated rates stems from one nasty explosion in the port of Tianjin.

What Happened at the Port of Tianjin in August 2015

In case you hadn’t heard of the Tianjin incident earlier this fall, here’s a quick recap.

On August 12, 2015, a massive explosion rocked the Port of Tianjin and the surrounding residential areas. At first, no one knew what went wrong. But after investigations into warehouse shipping containers owned by hazardous materials firm Ruihai International Logistics, authorities found Ruihai guilty of ignoring several safety regulations.

For starters, Ruihai was holding higher amounts of hazardous materials than permitted. The New York Times notes the firm was holding at least 700 tons of sodium cyanide, a toxic substance used for separating gold and silver from rock in mining. Ruihai was also violating Chinese safety regulations because its warehouses which exploded were operating too close to public buildings and residential homes, causing catastrophic damage to buildings and innocent citizens.

Tianjin Explosion

After a month of investigations and searching for missing people, Chinese authorities declared 173 people dead. Several Ruihai company employees and executives, as well as corrupt government officials who were aware of Ruihai’s misdealings, are under further investigation.

How the Tianjin Explosion Affected Recent Air Freight Rates

While Chinese authorities are doing their best to bring justice to a horrible situation, the repercussions of the Tianjin explosion have now trickled out to other parts of the world. This includes the air freight and shipping industry.

For starters, Tianjin caused the Chinese government to pay greater attention to safety laws imposed on freight companies. The increased government regulations means authorities are cracking down on forged dangerous goods paperwork. Currently, Chinese officials won’t hesitate to confiscate any items which weren’t properly classified.

Additionally, CargoFacts reports China has implemented a ban on charter flights from Tianjin, Shenyang, and Shanghai. The decision has caused lots of problems with available shipping space during this peak season. Airports across the country are now more backlogged than ever as shippers try to move cargo to non-restricted cities.

And what little space is available is often snatched by bigger brands (like Apple, for example) which can afford to pay the hefty freight rates during peak season. Carriers are prioritizing business from these types of repeat customers who regularly ship high volumes, and saving smaller, one-time shipments for last.

In short, peak season has become even more crunched than usual for businesses who need to get goods out of China.

What You Can Do to Ensure Your Goods Get Delivered Safely and on Time

So what do you need to know before you ship from China for the peak 2015 season?

  1. Make sure you properly classify all your items.You don’t want to get in trouble with Chinese officials, so make sure you file the proper paperwork for all items they might consider dangerous goods. If you’re not sure whether or not some of your goods will be hazardous materials, make sure you check with state/government officials as well as your shipping carrier.Note that some items which may not seem like dangerous goods are now considered just that. For example, ever since the Tianjin explosion, balancing scooter boards are now categorized as dangerous goods (for real).
  2. Avoid freight companies who claim they have cheaper shipping rates.Sounds like a dream come true, right? Finding a carrier who will charge you dollars less per kilo than their competitor sounds amazing during crunch peak time. But don’t be fooled.More often than not, these suppliers were faking papers before the Tianjin incident, stating their shipped goods weren’t dangerous. But now that the Chinese government is taking its freight rules and regulations more seriously, you don’t want to risk having your items confiscated if these “cheaper rate” shipping companies are still forging documents.
  3. Be more flexible with your shipping dates to ensure timely delivery and legitimate cheaper rates.If you can be flexible with when your freight ships from China, you’ll more easily avoid the peak air freight rates we’re currently seeing in the market. This means you could wait 2-3 days before your items ship (but no longer than a week) from the airport, depending on the availability of space a plane has for your shipment.Anytime you want to ship on a specific day or through a certain airliner, you’re going to be paying higher rates. While large companies like Apple can easily afford to do this, you might not want to shell out that massive wad of cash.

These higher costs of air freight rates from China aren’t exactly a welcome sight this holiday season. However, the increased prices don’t have to ruin your shipping experience. If you follow the steps above, you’ll be more likely to get your freight delivered on time to where you need it, and without spending a bucketload of money.

And that’s something to celebrate. Happy holidays all around!

Photo Credit: wings777 via Compfight cc

Nelson Cabrera
Nelson leads global business development efforts within ShipLilly and has been featured as a logistics expert in numerous publications, including SupplyChainBrain, The Bulletin Panama, Logistics Management, and the Miami Herald.

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