Importing from China during Public Holidays

It is important to know that China has two major extended public holidays.  Chinese New Year, which is well known and occurs in the spring time.  Then there is Golden Week, which incorporates China’s national day commemorating the founding of modern China.  This is held in the first week of October each year.

It is also worth knowing that due to the migrant nature of much of China’s workforce, these public holidays are often extended to two or even three weeks for total factory shut downs.

These holidays matter to companies importing from China as they cause a spike in demand immediately prior to both these holidays for space on ships and planes.  In addition, there is very little commercial work done, if any, over the holiday period.

This year is no exception and we are already currently finding that there are serious space shortages for container bookings from China. Many of our customers booking up to three weeks in advance or more to secure space.

Freight Rates

Due to the restricted nature of the available freight, rates have increased as space has become tighter.  Shipping lines who offer monthly contract rates are restricting or eliminating space on these monthly deals, in favour of auctioning off their container booking slots to the highest bidders.

You may wonder why there is such a problem in a year where Covid has seriously dampened consumer demand.  Shipping lines have already anticipated this by not operating up to 30 percent of all sailings through 2020 to restrict supply.

It has now become clear this strategy has been staggeringly successful, as shipping lines have gone from a position of struggling to make a profit in previous years, to almost all making significant profits in 2020.  Not many industries are in this position and it does help that all Far East shipping lines are in in three Consortia so, in effect, operationally, there are only three choices for importers.

Air freight

Curiously air freight does not seems to have been affected by pre-holiday spikes even though capacity has been seriously restricted due to lack of passenger flights.  Most cargo flies on passenger flights, not on cargo aircraft.  This is something of an enigma and probably describes the true state of the freight market and maybe the container market would have looked similar if shipping lines had not cut 30 percent of capacity.

Another factor to bear in mind is in the UK there is a shortage of container haulage drivers.  The average age of container drivers in the UK is 58.  Many of these people are leaving the industry due to the compulsory medicals and classroom based re-evaluations that need to be taken.  These drivers are not being replaced as fast as they are leaving as it is seen as a hard way to earn a living.  Long, irregular hours and nights away from home are off putting for the next generation of potential drivers.

To complete the double whammy up until earlier this year about 30 percent of UK container drivers were non UK EU nationals, many of whom have started to leave the UK as we head to the end of 2020.

The result is that whilst many trucks are parked up un-used, some shipping lines are advising there is up to a three week wait for containers being unloaded from ships.  Most shipping lines will only allow seven days ‘free time’ at the port for loaded containers, after which, penalty rent and demurrage charges are applied.  The ‘merchant haul’ container market is similarly busy with lead times from booking through to delivery of up to two weeks being common and sometimes expensive.

Clearly we are in challenging market conditions – we at K&L Freight are here to assist and make sense of this all. Please mail us or give us a call on 01606 272880

The post Latest News Regarding Importing From China, Malaysia & Vietnam appeared first on K&L Freight.

This service has been especially useful for one of our automotive clients. Specialising in Porsche engines, the company is a world-renowned expert in automotive repair and maintenance of high-performance engines.

As incredible as it may seem, engines for German-built cars, which have been sold in the USA, are regularly imported to the UK for our client to rebuild. Once the repairs are complete, the engine is returned to the USA where it is re-fitted, giving the car a new lease of life.

These kinds of cross trade shipments are common for a wide range of industries with complex supply chains. We have been helping clients successfully navigate this process for years, and as such, have established processes and infrastructure in place to support cross trade shipments worldwide.

Deciding on the right freight transportation option can be difficult for a growing business, but our global logistics experts make it easy for clients to secure the necessary paperwork and authorisations needed. In the case of our automotive client, this meant ensuring that each Porsche engine had the appropriate import/export documentation and that, once returned, the UK and USA duties were appropriately rebated.

This attention to detail and individualised support helps clients meet the needs of their customers, as well as control costs and reduce the impact that cross trade shipments would have on their company’s financial growth and development.

With a reliable network of global partners and a team of import/export shipping specialists to address your business needs, you can rely on K&L Freight to deliver your cargo quickly and efficiently at the best possible rates.

The post Cross Trade Shipments From USA to the UK appeared first on K&L Freight.

The rejection, issued after a seven-month antitrust review, has effectively ended plans to create what would have been the most powerful container-shipping alliance in history.

Freight Operational Network Forbidden

In a strongly worded statement, MOFCOM announced that it would “forbid Maersk Line, Mediterranean Shipping Co and CMA CGM to concentrate” by establishing a shared operational network.

The decision followed approval from both the US Federal Maritime Commission and the European Commission, which had cleared the alliance earlier in 2014. China’s refusal therefore came as a surprise to the industry, given that regulators in other major markets had already greenlit the partnership.

Maersk Line CEO Nils Andersen commented:

“The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators’ concerns.”

Maersk confirmed that preparatory work on the alliance has been stopped and that there is no right of appeal under China’s merger-control rules.

What Was the P3 Network?

The P3 Network was envisioned as a long-term vessel-sharing agreement between the three largest shipping lines. Its aim was to:

• Pool resources across Asia-Europe, Trans-Pacific, and Trans-Atlantic routes.

• Improve network efficiency and vessel utilisation.

• Offer customers more stable schedules and capacity.

Had it gone ahead, the P3 would have fundamentally reshaped the competitive landscape by consolidating capacity and operational power within a small group of carriers.

Market Reactions and Impact

The cancellation had immediate financial consequences, with AP Moller-Maersk shares falling 5% on the Copenhagen stock exchange.

CMA CGM, however, issued a statement of confidence, noting it would continue to “overperform the industry” despite the setback.

Industry analysts argue that while the P3 never launched, it already had a profound impact on global shipping:

• Rival alliances like G6 (APL, Hapag-Lloyd, Hyundai Merchant Marine, Mitsui OSK Lines, Nippon Yusen Kaisha, and Orient Overseas Container Line) began expanding into Pacific trades in anticipation of the P3.

• The CKYH Alliance (Cosco, K-Line, Yang Ming, and Hanjin) formally added Evergreen Marine, a strategic move widely seen as a reaction to P3’s proposed market dominance.

• Competitive pressure is expected to intensify among individual members of existing alliances, reshaping rates and service patterns across key trade lanes.

Alan Murphy of Seaintel Maritime Analysis noted:

“Although the P3 never happened, it has already had a massive effect on the industry.”

A New Competitive Landscape

The decision casts doubt on the cohesion of alliances like G6 while simultaneously opening the door to new vessel-sharing agreements or smaller-scale consolidations.

Legal experts, including Anthony Woolich of Holman Fenwick Willan, point out that the MOFCOM ruling leaves open the possibility of limited cooperation between the three carriers, even if the original P3 concept is dead.

What This Means for Global Shippers

For businesses dependent on international freight forwarding, China’s decision highlights the volatility of global shipping alliances and the direct impact regulatory rulings can have on supply chains.

• Competition Among Carriers – The collapse of P3 may keep freight rates more competitive in the short term.

• Alliance Shifts – Shippers must stay alert as carriers realign and form new cooperative structures.

• Uncertainty in Trade Routes – With major alliances in flux, scheduling and capacity availability may fluctuate more than expected.

Working with an experienced freight forwarder like K&L Freight ensures businesses have access to flexible solutions across shipping alliances and trade routes, helping them manage risk and secure reliable capacity.

Conclusion: A Turning Point in Container Shipping

China’s rejection of the P3 Network has reshaped the competitive dynamics of container shipping. While intended to consolidate efficiency, the alliance raised regulatory concerns about market dominance. Its collapse means carriers will continue to rely on alternative alliances and vessel-sharing agreements, keeping competition alive but uncertainty high.

For shippers, the lesson is clear: global shipping alliances can change overnight. To stay resilient, businesses need partners like K&L Freight who can navigate shifting networks, negotiate competitive freight rates, and provide stability in an unpredictable industry.

The post China Blocks P3 Network Alliance: What Are the Effects on Container Shipping? appeared first on K&L Freight.