China Manufacturing N Quality Control Blog

The port of Long Beach in Los Angeles is moving toward a 24-hour operation
Global shipping prices have more than quadrupled from a year ago
A large portion of Christmas trees sold in the U.S. come from Asia, but record shipping rates for containers have forced U.S. retailers to raise prices to cope with rising shipping costs. The average shippin?g price for a 40-foot container around the world has more than quadrupled from a year ago to more than $10,000, according to the Global Pricing Index of London-based DRE Shipping Consultants LTD.
Ships have been forced to drift in SAN Pedro Bay in record numbers as all anchorage along the California coastline fills up with ships loaded with containers. Snapshots from MarineTraffic, the online ship-tracking service, have needed to zoom deeper into the ocean as new queues are created every day.

At the ports of Los Angeles and Long Beach, two of the nation’s largest maritime gateways, 95 ships were lined up for berths, according to the Southern California Maritime Exchange on Monday. Of the 95 ships in the queue, 70 are container ships. Notably, 37 ships — including 29 container ships — were forced to drift in the Pacific.
In the process, ships often drift for miles and then return to their original position, which tends to use a lot of fuel. Ships at the back of the queue now have to wait up to three weeks for berths to open.

China is the largest export market in Asia.

Although the external environment facing China’s foreign trade development in the future is still severe and the factors of instability and uncertainty increase,

Chinese products are highly competitive and have the ability to quickly turn around
Market diversification has achieved remarkable results, and exports to the EU and countries and regions along the “Belt and Road” will continue to grow steadily
Stable foreign trade policy is continuously released
A moderate depreciation of the name currency will help ease export pressure to a certain extent.
From a general perspective, with the gradual normalization of the new COVID-19 epidemic in the future, global trade demand will further heat up, and the external market will drive a strong economic recovery in China.

Here are some basic steps to start the business in China.

1) Select the suppliers

Define what kind of suppliers you want to cooperate, e.g. OEM, ODM, or JDM. The suppliers can be searched from international platform, e.g. Alibaba, Amazon, Shopify, or trade shows, etc.
make a supplier audit to understand the situation of the supplier about the capability, scale, QMS, Social accountability, etc., and verify if it is a real and reliable manufacturer. (KFQ can help on this)

2) Sign the agreement

Sign the contract how to cooperate, specify the responsibilities, and protect the interests for both parties, e.g. IP.

3) Negotiate and make the contract/PI

Search/design the products you are interested, confirm the quotation, and sign on the Proforma Invoice.

4) Review the samples and make down-payment

To play safe, ask the supplier to make post production samples, evaluate the function, safety and salability, and then make the down-payment for the commencement of the production.

5) Control the quality at various productions stages

Perform inspections at different production stages, e.g. Initial production, During production, or Pre-shipment, to ensure the goods produced meet your requirements and delivery on-time. (KFQ can help on this)
Supervise the container loading to ensure right goods are stuffed into the container. (KFQ can help on this)

6) Make the balance payment per payment terms

If you are satisfied with the goods quality, release the shipment and make the balance payment per payment terms, e.g. PIA, LC, NET XX days, etc.
To maintain the sustainable good relationship, the importer and supplier should mutually support each other, and respect the contracts/agreements.

 

Data showed that From January to July, China’s foreign trade continued to maintain a momentum of rapid growth. However, the situation of foreign trade enterprises is a little sad. Recently, shipping prices continue to rise, some popular lines container freight has exceeded $20,000 per teU, reflecting the spot market price of Shanghai export container freight index has been new highs. Export container “a box is difficult to obtain”, some enterprises even fall into the “box is more expensive than the goods”, “there is a single dare not meet, export is not profitable” predicament. Why is it difficult to “ship” by sea? How to rescue foreign trade enterprises? The reporter conducted the investigation in guangdong province, a major foreign trade province.

Large quayside bridge equipment at the front of the wharf keeps lifting and transporting containers, trailers in the yard shuttle back and forth constantly… The busy scene on the ports of Dongguan Port Group is a microcosm of the flourishing export of “Made in Guangdong”. According to the statistics of Guangdong Branch of Customs, up to July, Guangdong’s foreign trade import and export has been growing for 9 consecutive months; In the first seven months of this year, Guangdong’s container exports increased 4.6 times.

However, strong international demand combined with the impact of the COVID-19 epidemic overseas has continued to “obstruct” shipping logistics, with freight rates rising.

“Since the fourth quarter of last year, there has been a shortage of containers and a shortage of space in south China as exports have boomed. In the first half of this year, due to the Suez Canal congestion and other factors, the European and American route hub ports continued to be closed, and the international container shipping market is more obvious.” Zhuang Zhiyong, deputy general manager of South China CoSCO Container Shipping Co., LTD. (South China Container Shipping) Dongguan Branch, analyzed that the contradiction between supply and demand is on the one hand due to the epidemic, European and American consumers have increased demand for “Made in Guangdong” furniture, electrical appliances and other products, and cross-border e-commerce sales have surged; On the other hand, the spread of the epidemic has significantly reduced the efficiency of many ports, yards and trailers around the world, resulting in port congestion and impeded container turnover.

The reporter learned from several foreign trade enterprises that the “obstruction” transmitted from overseas and the occasional outbreak of the epidemic in China have caused problems in many ports in the Guangdong-Hong Kong-Macao Greater Bay Area in the past few months, such as cargo pressure, ship jumping port, difficult to pick up and return containers, and small and medium-sized enterprises are suffering from “shipping difficulties” and high costs.

Most affected are processing trade companies, which rely heavily on seaborne exports. “A headache! Orders received by the overseas headquarters keep coming, 1/3 of our printers and copiers can not be shipped out, and we have accumulated more than 100 containers in the past two months.” Yuan Xiji, head of customs affairs of Kyocera Office Equipment Technology (Dongguan) Co., LTD., told reporters that because the dock yards in Yantian and Shekou of Shenzhen have long been filled with containers, there are also long queues outside the dock. It used to take only a week for goods to leave the factory and ship, but now it takes nearly a month. After arriving at European and American ports, customers used to wait three or four days to pick up goods. Now they have to wait weeks.

Facing the backlog of goods, the dilemma of processing trade enterprises lies in that they can only produce according to the order when they receive orders from overseas headquarters. “If we are marketing ourselves, we can temporarily stop or reduce production, but we have to do it when we receive orders. We can’t stop.” To cope, Mr. Yuan said, the company had to choose the more expensive China-Europe freight train, which is also difficult to book and can only handle one-tenth of the original sea freight volume. For a few urgent customer needs, expensive air freight has to be used instead. “Shipping costs are the customer’s burden, but it will eventually affect sales.”

Electrical and mechanical products account for nearly 70 percent of Guangdong’s exports, and manufacturers’ overseas orders are booming, but their profits are being eroded by high freight costs. “The cost of shipping logistics has soared.” Liu Qizhen, a customs manager at Dongguan Chuang Electromechanical Products co., said 70% of the company’s exported power tools go to the U.S. and orders rose 30% in the first half. However, due to the lack of containers, only 80% of the products can enter the dock now. Those who cannot enter the dock have to spend one or two million yuan to rent a warehouse to wait for the containers every month. When goods go to Yantian Wharf in Shenzhen, the cost of land transportation has increased by 30% or 40%. Shipping has risen even more. A 40-foot container shipped to the United States used to cost just over $2,000, but now it costs more than $10,000. We bear the bulk of the freight, fortunately, the product added value is high, not to “more expensive than the goods” situation.

Small and medium-sized companies are feeling the chill of life and death. Shipping industry insiders told reporters that in the “one cabin is hard to find” environment, large enterprises have resources from shipping companies to get relatively more space, there are funds to withstand the rise in freight rates, and small and medium-sized enterprises often give shipping agents, or can not get space, or have to bear higher freight rates. South China Transport recently survey small and medium-sized enterprises found that some enterprises because of the backlog of warehouses, delivery delays, funds can not be withdrawn, has faced the risk of production.

In order to alleviate the difficulties of enterprises, guangdong customs, port, shipping and other departments and enterprises have worked together since this year to take precise measures against the blocking points in all links of the whole maritime transportation chain, flexibly innovate models, open up green channels, and try their best to ease the adverse impact of the international maritime logistics difficulties on enterprises’ export.

Overstocking is an imminent problem for foreign trade enterprises, so the Customs department launched the “factory warehouse” business for processing trade enterprises.

“In recent years, the phenomenon of ‘bursting’ and ‘dumping’ of shipping exports has occurred from time to time, and the waiting time has been significantly prolonged, while the inventory capacity of enterprises is limited, and many processing trade enterprises can not meet the demand of the original customs records. At this time, they can apply for ‘factory external warehouses’, adding external warehouses to store goods. As long as the application is submitted online, the customs will immediately approve it.” Huangpu Customs belongs to dongguan Customs comprehensive business three section chief Yue Xinyan said. “Thanks to dongguan Customs, kyocera set up several off-factory warehouses for us, storing more than 100 teUs of goods, which greatly relieved the inventory pressure.” Yuan Xiji told reporters.

The difficulty in booking cargo space for exports is the biggest headache. Ports and customs departments have joined hands to support the “sea-going” chartering of cargo vessels in the Greater Bay Area.

Recently, Dongguan port officially opened a charter route between Europe and America, opening the channel for dongguan foreign trade enterprises to fly directly to Europe and America. “With the support of Shatin Customs under Huangpu Customs, we have introduced charter routes to Europe and America, which can deliver nearly 10,000 TEUs of goods every month.” Dongguan Port group related business director Sun Cheng introduced. Compared with the enterprise feeding the goods to the surrounding hub ports through Dongguan port, the European and American charter routes can save us $3000 / box of shipping costs, and alleviate the shortage of shipping space. “Shatian Customs provides round-the-clock customs clearance service for us, and deals with ship customs clearance, health quarantine and other procedures in the first time, saving nearly a week and 1,500 DOLLARS per container.” Guangzhou city shipping agent company dongguan branch manager Zeng Junhai said.

Port congestion, but also export enterprises into the trailer to carry cabinets difficult, land freight soaring predicament. Since June, Dongguan Port, Nansha Port of Guangzhou, Shekou Port of Shenzhen and Yantian Port have jointly launched the barge express service. Barges are used to replace the original trailer to pick up and return containers, so as to reduce logistics costs and ensure that containers can catch up with larger ships. At present, the service has effectively guaranteed the normal operation of the supply chain of Huawei, TCL, VTECH and many other foreign trade enterprises.

For smes in urgent need of timely help, CoSCO shipping Group and its subordinate South China Container Shipping Co., Ltd. play the role of central enterprises and take precise measures for small and medium-sized customer groups. “The company has developed a space supply scheme for international container lines, making plans in advance for small and medium-sized customers and locking space. We have successively launched ‘us line small and medium customer service line’, ‘Europe line small and medium customer special class’, ‘Australia and New Zealand quality Express special class’ and other ‘one-stop’ trailer and shipping services, and created a new small and medium customer e-commerce special line. Zhuang Zhiyong introduced.

It is still difficult to predict when international shipping will return to normal, and foreign trade enterprises are still struggling to find good solutions to the challenges.

In this regard, South China Container Shipping suggested that enterprises should strengthen the overall planning of production and logistics, pay attention to the real-time dynamics of the maritime market, adjust the production rhythm according to the shipping space situation, and reduce the inventory backlog as much as possible. At the same time, keep close communication with shipping company, timely solve the problems encountered in shipping.

Industry insiders suggested that traditional foreign trade enterprises should timely consider making new plans for future development, as shipping cost pressure will not be eased in the short term. For example, a considerable part of the sea transportation belongs to processing enterprises, no pricing power, logistics power, can not control the production and delivery cycle. At present, traditional offline supply chain logistics is relatively depressed. If we can try to create our own brand and set up shop on Amazon and other cross-border e-commerce platforms, we can control supply chain logistics more flexibly.

Foreign trade enterprises with independent brands and channels show obvious advantages compared with traditional processing trade enterprises. It has a number of its own brands, a small number of OEM dongguan chuangji felt deeply. “OEM for overseas brands can only get a little processing fee, under the pressure of cost, can only manage to maintain production, after all, a loss of 1 yuan is better than a loss of 10 yuan. But private label has more profit margin, make some money, at least not lose money.” Liu said.

Since the outbreak of the epidemic last year, more and more foreign trade enterprises have actively tried to transform. With their efforts to enhance independent development capacity and expand living space, Guangdong’s foreign trade risk resistance and resilience are gradually improving. In 2020, general trade accounted for more than half of guangdong’s total import and export value for the first time, occupying the dominant position; Processing trade fell to 28.2 per cent. In the first seven months of this year, Guangdong’s general trade has accounted for 52.5% of its total import and export value, further optimizing its foreign trade structure.

Industry experts believe that the current vigorous development of new forms of foreign trade represented by cross-border e-commerce provides new opportunities for foreign trade enterprises. The majority of foreign trade enterprises should seize the opportunity, practice “internal skills”, through actively expanding brand and sales channels, enhancing research and development ability, enhance the level of automation and other measures, reduce costs, improve the added value of products, enhance the ability to withstand the international market storm.

China is not only the world’s largest producer of electricity, but also the world’s largest producer of clean electricity. Not so-called clean electricity, refers to consumption through oxygen release carbon dioxide produced by the way of generating electricity, and utilization of hydropower, wind, solar, nuclear, geothermal energy and so on of the electric belong to clean energy, and fossil fuels such as coal and oil are need to consume oxygen release carbon dioxide to generate electricity, and too much carbon dioxide is considered to be polluting the atmosphere and cause global warming, So electricity from coal and oil is not clean electricity.

According to the concept of news “and other media reported on September 4, has built the world’s largest clean power generation system in our country, said an official with the ecological environment, by the end of July, the national non-fossil energy installed capacity of 1.03 billion kilowatts, up 18.0% from a year earlier, accounts for the total installed capacity of (02) end of the year has more than 2.2 billion kilowatts of 45.5%, The world’s largest clean power generation system has been established in China, and the trend is also in a state of rapid growth, so the scale of this system will continue to expand in the future.

What about 1.03 gigawatts of installed capacity? It is equivalent to the installed capacity of at least 45.7 Three Gorges DAMS. In fact, it is larger than the total installed capacity of any country in the world except China and the United States. The top five are China, the United States, India, Russia and Japan, but China accounts for nearly 30 percent of the world’s electricity generation. So China’s 1.03 gigawatts of installed clean electricity capacity is almost larger than India, Russia and Japan combined, and even compared with the US, it is about 85 per cent of its total installed power generation capacity.

Under the goal of reducing carbon emissions and achieving carbon neutrality, China is accelerating the process of clean and low-carbon power generation. A number of indicators such as hydropower, wind power, photovoltaic and nuclear power installed capacity under construction have been ranked first in the world for many years.

By the end of July this year, China’s installed hydropower capacity reached 380 million kilowatts, up 4.9 percent year on year. China is already the world’s largest hydropower country, but there are still several large hydropower stations under construction. The installed nuclear power capacity was 53.26 million kw, up 9.2% year on year and also in a state of rapid growth. Installed wind power capacity was 290 gw, up 34.4% year on year, which can be said to be rapid growth; The installed solar power capacity was about 270 million kW, up 23.6% year on year, and the growth rate was also quite fast. The installed capacity of biomass power generation is 34.09 million kW, up 31.2% year on year, with rapid growth but relatively small capacity, so there is room for further development. In contrast, the proportion of installed thermal power capacity in the total installed capacity is decreasing, but the installed capacity is still more than 60%.

According to the national energy bureau relevant responsible person, the future will quicken the steps of reducing coal in the energy production in China, the control of coal project, at the same time to speed up the development of wind power, solar power, nuclear power, non-fossil energy sources such as geothermal power, increase green low carbon energy supply of share, make our country agriculture is clean electricity.

The imported food products covered in the white paper include fruits and vegetables, meat, poultry and eggs, aquatic products, cold drinks and frozen products, milk and dairy products, cooked food and bakery products, non-staple food of cereals and oils, casual snacks, drinks and beverages, and baby food. Among the surveyed consumers, 57.5 percent of the total food consumption accounted for more than 10 percent of imported food, up nearly 5 percent year-on-year.

With the upgrading of the supply chain, the categories and sources of imported food are becoming more and more diverse, and more and more countries and regions’ delicacies are serving on the tables of Chinese residents. From 1997 to 2017, China increased its food imports from 108 countries and regions to 170, covering 73.9% of the world’s countries and regions.

With the continuous development of the domestic food e-commerce industry, the operation mode of the online platform represented by cofco has become increasingly mature, and the supply chain has been upgraded from source to circulation in an all-round way, helping more high-quality imported food reach the table of Chinese consumers.

The amount of US agricultural products imported by China in the first five months “halved” comparing with same period last year
China’s imports of agricultural products from Brazil, Asean, the European Union, Australia and Canada maintained rapid growth from January to May, while imports of agricultural products from the United States continued to decline rapidly, data from Ministry of Agriculture and Rural Affairs showed Thursday.The amount of agricultural products imported from Brazil rose 20.7% to 76.19 billion yuan from 63.12 billion yuan in the same period last year.imports of US agricultural products fell 55.3% to 32.73 billion yuan from 73.22 billion yuan a year earlier. Soybean imports from January-May totaled 31.751 million tons, down 12.2% year on year, of which 4.309 million tons were imported from the United States from January to April, down 70.6% year on year.The import of pork, beef and mutton increased from January to May, totaling 1.405 million tons.

The main categories of overseas buyers include children’s educational toys, outdoor riding toys, remote control toys, building blocks toys, stress relief toys, IP tide toys, etc., covering the age range of 0-6 months, 3-6 years old, 10-18 years old, 20-40 years old, etc.

Remote control, building block toys

Remote control and building block toys have always been hot sellers. After years of deep cultivation in the market, a number of experienced players of remote control and building block toys have emerged among overseas buyers.

Educational toys for babies and children

Low-age toys have always been in demand in the market. Since the epidemic in 2020, social anxiety has accumulated and anxiety about the future has accelerated the market demand for educational toys.

Building block Toys (science and technology pieces/wooden blocks/Street View/architecture/large particle blocks/wooden table/magnetic chips, etc.)

Since July 1 last year, the General Administration of Customs has achieved remarkable results in the “cross-border e-commerce B2B Regulatory reform pilot project”. According to preliminary customs statistics, China’s cross-border e-commerce import and export maintained a good development trend in the first half of the year, with the total import and export volume reaching 886.7 billion yuan, up 28.6% year on year. Exports totaled 603.6 billion yuan, up 44.1% year on year. Imports reached 283.1 billion yuan, up 4.6% year on year.

For the same distance, its transportation speed determines its price, so the price of sea transportation is less than that of land transportation and less than that of air transportation.

The advantages and disadvantages of each channel are as follows:

International Shipping:

Advantages: the volume of ocean transportation is large, the cost of ocean transportation is low, the waterway is accessible in all directions, which is its advantage.

Disadvantages: but the speed is slow, the sailing risk is big, the sailing date is not easy to be accurate, is its inadequacy.

International land transport:

Disadvantages: the speed is slower than air freight, the risk is high, the situation in the road is not easy to grasp, the cost is higher than sea freight.

Advantages: transportation of goods with small limitations, almost all kinds of goods can be transported. The operation is relatively simple.

International air freight:

Disadvantages: high price, small amount of goods transported, packaging should not be too big, the type of goods limited

Advantages: fast speed, easy to pick up goods

Suitable for high value, small volume, less quantity, high speed requirements of goods.

 

On August 26, tianjin port bonded area management committee and China petrochemical sales co., LTD., tianjin branch, light path (Shanghai) Internet science and technology co., LTD. Signed a cooperation agreement, the airport investment service center to form hydrogen energy (tianjin) co., LTD., sinopec play to all parties in the industry, resource, scene and policy aspects of the comprehensive advantages, combination, We will further promote the development and application of hydrogen energy, and help achieve the goal of “carbon peak and carbon neutral”.

Hydrogen energy, as an important solution for decarbonization, plays an important role in helping to achieve the goal of “carbon peak and carbon neutral”. Tianjin Port Free Trade Zone is a cluster area where Tianjin focuses on the layout and development of hydrogen energy industry. In the past two years, the bonded zone has accelerated the layout of hydrogen production and hydrogenation infrastructure, registered a number of core component projects, made breakthroughs in the application of hydrogen fuel cell forklifts and heavy trucks, and initially formed a hydrogen energy industry chain. Recently, the beijing-Tianjin-Hebei National Fuel cell vehicle demonstration city cluster declared by the bonded area on behalf of Binhai New Area was officially approved, which creates favorable policy conditions for the accelerated development of regional hydrogen energy industry.

Sinopec is one of the world’s top 500 enterprises. Aiming to become the world’s leading clean energy enterprise, the group carries out the layout of the whole industry chain in hydrogen energy. Sinopec Tianjin Petroleum Company is the largest refueling and filling station operator in Tianjin. The comprehensive energy station of oil, gas, hydrogen, electricity and service led by the company will be started in the near future, and will become the first commercial hydrogenation station in Tianjin after completion.

LSC (Shanghai) Internet of Things Technology Co., Ltd. is a company committed to providing hydrogen energy application solutions and integrating resources to build hydrogen energy industry ecological chain. LSC is currently the largest commercial hydrogen fuel cell vehicle operator in China. Previously, it has carried out extensive cooperation with Sinopec in Shanghai, Beijing and other places on the demonstration application and promotion of hydrogen fuel cell vehicles.

It is understood that this contract project subject – sinopec hydrogen energy (tianjin) co., LTD., will be the key to develop hydrogen fuel-cell vehicle demonstration operation, filling station construction operations, to create “car – standing – scene” linkage operation mode, through to end customers with competitive hydrogen vehicles service capacity, drive the continued healthy development of the whole industrial chain. Based on Sinopec Hydrogen Energy (Tianjin) Co., LTD., the BONDED zone will further deepen cooperation with Sinopec in the field of hydrogen energy and new energy, gather high-quality project resources, further promote the aggregation of “1+3+4” industrial elements, provide effective support for the national strategy of coordinated development of Beijing-Tianjin-Hebei region, and make contributions to the implementation of the “dual carbon” goal.

According to the 14th Five-year Plan of Tianjin Scientific and Technological Innovation, we should make great efforts to develop hydrogen energy around the goal of “carbon peak and carbon neutral”. Hydrogen industry is one of the four future industrial clusters that will be cultivated and developed by independent innovation during the “14th Five-year Plan” of Tianjin Port Bonded Area. The bonded area will adhere to government guidance, market operation, scientific layout and coordinated development, firmly grasp the opportunity of hydrogen technology development and energy structure reform, and guide and support by policy. Further strengthen filling stations and other involved hydrogen infrastructure development, expand the hydrogen fuel cell demonstration application scenarios, and to fuel cell research and development, key components manufacturing and vehicle integration as the core, to speed up the industrial layout, form the industry cluster competitive hydrogen, promote the development of the hydrogen industry with high quality, building the leading domestic, the hydrogen industry highlands with international influence.