This year, I heard lots of freight forwarders complain that there are fewer orders, the shipping price is extremely low, no profit or even loss money to move a container, and they joke that it is better to ‘go home and go fishing’. It is a recent hot topic on China’s internet called ‘Lying Flat’.
Under the hot market last year, many companies chose ‘all in’ to raise investment, and more people ran into the international logistics industry, dreaming of sudden wealth. However, none of them expected the depression came so quickly, and they didn't even take it at all. Big winter comes to every freight forwarder in 2022. On the one hand, there is a contract paper of more containers with higher freight than last year, and on the other hand, they are sellers whose shipping orders have fallen sharply. The freight forwarder are suffering pain and pressure from both of them. They finally chose to get orders at a below-cost price to keep the contract with shipowners and the old clients.
Under the severe market competition, many freight forwarding companies are losing money, and the bigger the companies are, the more they loss. In addition, due to the shortage of orders, many freight forwarders cannot help but take a risk to load sensitive goods. As an old saying goes—Hunger is the best sauce. It is obvious that these freight forwarders are very likely to experience thunderstorms due to multiple pressures, including financial deficit, risk of high fines of sensitive cargo inspection, and the risk of bad debts from customers. This is just a matter of time. It has happened from time to time this year. And the story is just beginning.
Therefore, for sellers, I can’t stress it enough to keep eyes open to tell a good forwarder, and watch out for ridiculous low price.
Appropriate involution is helpful to promote industry innovation, while excessive involution is full of risks without doubt.
In the next video, I will tell you how to recognize the high-risk freight forwarders.
Severe Logistics Involution, what should sellers think about it? A blessing or curse