The tightness of car export capacity continues to intensify, should car companies build ships?

The difficulty in exporting used cars is just the tip of the iceberg. The export of new cars that are larger than them is also facing the dilemma of "difficult to find a cabin" for sea transportation. As China's auto exports ushered in explosive growth, my country surpassed Japan in the first quarter of this year and became the world's largest auto exporter. But the increase is too fast like a tornado, and the transportation market obviously cannot keep up with the rhythm.

■The investment in automobile shipping has not increased for almost ten years
In the past one or two years, the topic of tight car export capacity has suddenly entered the scope of people's discussion. Zhang Zhanhao, director of operations of Guangzhou Yuanhai Automobile Shipping Co., Ltd., introduced that the shortage of transportation capacity is caused by two factors: supply and demand.

From the perspective of supply, in the past ten years, the global market, including China, has hardly increased investment in automobile transportation. On the contrary, some automobile carriers are still being eliminated. The result is that the overall transportation capacity of automobile shipping has even declined slightly. It turns out that the total number of domestic professional car carriers that can be used for ocean transportation does not exceed 10. Now, after some domestic trade small ships are transferred to foreign trade, there are only a dozen of them in total.

From the perspective of demand, my country's automobile exports have entered a period of rapid growth. In 2021 and 2022, the increment of automobile exports exceeded 1 million for two consecutive years; from January to April this year, my country's automobile exports were 1.494 million, a year-on-year increase. 76.5%. Demand has been growing and supply has been decreasing, and tight capacity has become a necessity.

The transportation capacity is tight, and the freight rate will naturally rise. Zhang Zhanhao feels deeply about this. He recalled that from the end of 2020 to the beginning of 2021, the demand for car transportation suddenly increased sharply, and all transport ships were launched "overnight", and the daily rent of a single ship gradually increased from the original 10,000 US dollars to 80,000 US dollars or even more than 100,000 US dollars. Dollar. Not a single ship has been released for several months (the charter contract expires and is put on the market), and once a ship is released, it will be snapped up by domestic and foreign transportation companies. This situation of tight shipping capacity has continued until now, and the rent of ships has always been at a high level.

Chen Gang also told reporters that the problem of tight capacity has become more obvious since April this year. The reason is that in the new period after the epidemic, China's economy has begun to recover, and the volume of exported goods has increased significantly, but the overall transportation capacity is limited. Although car exports are more inclined to professional car ro-ro ships, fuel vehicles will also choose to be transported in containers when the capacity is insufficient. The increase in the export volume of other goods will inevitably squeeze the car capacity.

"It is reported that China has recently launched a large-scale aid project to Dubai, which requires more than 8,000 container transportation facilities per month. In addition, China's exports to Russia have increased significantly, and all aspects will occupy a little more capacity. The demand for the automobile industry will increase. Compressed”, an industry insider who did not want to be named said that the freight rate of the transport space is now 75 US dollars per cubic meter, and it reached 160 US dollars at the peak last year, which is equivalent to an increase of 2.5 times, which is not high for profits. As far as the export of second-hand cars is concerned, the pressure is not small.



■The urgent need for new shipbuilding may be alleviated in the second half of 2024
The tight transportation capacity can't stop the rapid momentum of car exports. Recently, Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, said that starting in 2021, China's auto exports will develop well, and auto exports have entered a stage of rapid growth. It is expected that the export of automobiles in 2023 will increase by 20% to 30% from the beginning of the year, and the annual export volume may exceed 4 million after adjustment.

Almost at the same time, at the regular press conference of the Ministry of Commerce on May 25, Shu Jueting, the spokesperson of the Ministry of Commerce, also emphasized that my country's auto exports are showing a phased trend of rapid growth, and the Ministry of Commerce will focus on transportation with relevant departments. Guarantee and other aspects of work: Promote medium and long-term strategic cooperation between automobile companies and shipping companies, encourage shipping companies to speed up the construction of ro-ro fleets, and expand car export capacity.

As the Ministry of Commerce said, transportation companies have responded quickly. Zhang Zhanhao introduced that Yuanhai Car Shipping Company has launched a new shipbuilding plan and will successively invest in more than 24 large LNG dual-fuel car ships with 7,000 to 8,600 parking spaces. However, shipbuilding needs a cycle of at least 2 years. To solve the urgent need, on one hand, the ocean car shipping company has fully mobilized resources from all parties and increased its capacity by adjusting the route configuration. For example, in response to the needs of automobile export manufacturers, the capacity of the three 5,000-space car ships originally operating on the ocean routes in South America will be adjusted to the near-ocean Persian Gulf route, and two monthly liner transportation services will be provided, which can increase the current limited capacity and efficiency by 1 time.

On the other hand, COSCO Car Shipping Co., Ltd. cooperates with its shareholder—COSCO SHIPPING Group’s global container liner routes, the world’s leading pulp fleet, and the world’s leading general cargo fleet to jointly provide containers and foldable car frame specialists for China’s auto exports. Comprehensive logistics supply chain solutions such as special shifts and special shifts for engineering vehicles. COSCO SHIPPING Specialized also created an original method of using a special frame for commercial vehicles to be shipped on a pulp ship, that is, to customize special frames of different specifications, which can be loaded with different types of export commercial vehicles.

Shi Yunsheng, general manager of Tianjin Huatu Automobile Logistics Co., Ltd., believes that the increase in transportation capacity of Japan, South Korea, and European and American countries, without exception, is accompanied by the simultaneous development of automobile exports. At present, domestic shipbuilding companies, car manufacturers, and large transportation companies are also Stepping up the layout of the ro-ro fleet, coupled with the increase in container capacity, it is believed that the problem of the tight export capacity of China's automobiles will gradually be alleviated.

Zhang Zhanhao further judged that when the new car ship is put into operation, it is expected that the shortage of transportation capacity will be alleviated in the second half of 2024, and the supply and demand balance of transportation capacity will be gradually realized in 2025.

Car companies end up building ships, should or should not



In the process of the whole industry working together to solve the capacity problem, the response of auto companies is particularly eye-catching. To grasp the initiative of "sea-going" transportation, auto companies including BYD, SAIC, Chery Automobile, and Weilai Automobile have begun to invest heavily in cross-border shipbuilding to reduce the cost of automobile export transportation, strengthen transportation stability, and improve overseas delivery cycles.

In this regard, Kong Zhen, associate professor of Beijing Information Technology College, agreed deeply: instead of "complaining" about the lack of capacity, it is better to end in person. He pointed out that logistics accounted for more than 10% of China's manufacturing costs, while the proportion in developed countries was only 3% to 5%. Reducing logistics and transportation costs is conducive to the high-quality development of China's manufacturing industry and the domestic and international dual cycle pattern Formation. The scale and strength of leading car companies are higher than those of transportation companies. With the sharp increase in car exports, it is inevitable for cargo owners to arrange transportation in person.

He further pointed out that some car companies choose coastal cities, which themselves have the advantage of carrying out sea transportation, while some car companies are not near the sea, so they can also choose multimodal transport. Whether it is purchasing and leasing ships, or purchasing a certain ship, a certain route, or a certain period, car companies should play a role in resource planning. "Moreover, looking at the world, the throughput of ships in sea areas such as Panama is still not enough. Chinese car companies can solve the urgent shortage of transportation capacity from the perspective of a global game of chess." Kong Zhen said.

Zhang Zhanhao holds another view. He believes that the transportation industry presents an obvious cycle. In short: a few years of hot and a few years of downturn. The current market is hot, and the transportation premium is naturally high. However, once the market enters a downturn, professional shipping companies can integrate resources, optimize the layout of route capacity, and better cope with market downturns; The team, management experience, and global shipping network resources can easily fail in this field.

Zhang Zhanhao believes that car companies can cooperate deeply by signing long-term contracts with transportation companies to ensure stable transportation capacity. If the car companies have already finished building ships, they can also entrust the ships to professional transportation companies to avoid disorderly competition among domestic ships. "There are about 700 car carriers in the world. And how to compete with foreign capacity in the international market?"



■In addition to shipbuilding, docks, warehousing, and logistics are indispensable
The train transportation capacity is limited and the cycle is long. In addition, most of the destination countries for my country's automobile exports are near the sea. On the whole, sea transportation is the most efficient, economical, and convenient mode of transportation. The number of car ships directly determines the size of the transport capacity, but the improvement of transport capacity is far more than simple shipbuilding.

Zhang Zhanhao has just returned from a survey of the European market, and Zhang Zhanhao has a lot of feelings. He told the "China Automobile News" reporter that some details are also affecting the capacity and quality of transportation, such as transportation nodes other than ships. He gave an example that the carrying capacity of the Mexican terminal is relatively small. Sometimes Chinese car ships arrive at the port carrying thousands of cars, but the vehicles on board cannot be unloaded for a long time, which slows down the turnover of ships and further exacerbates the shortage of capacity.

In addition, after the ships arrive at the port and enter the warehouse, all car companies need to quickly distribute the vehicles to various distribution outlets. Some car companies have insufficient network construction in export destination countries, or poor logistics and transportation capabilities. The "swarming" search for logistics has caused local transportation companies to raise prices on the ground, greatly increasing the cost of car exports.

Zhang Zhanhao suggested that to increase China's auto export capacity, it is necessary not only to increase the construction of its fleet, but also to strengthen the investment and construction of docks, warehousing, logistics, and other links, to ensure that every link of auto export is unimpeded. At the same time, it is also necessary to deepen the collaboration between transportation companies and car companies. As far as the transportation link after arriving at the port is concerned, each car company can submit its needs to the transportation company, and the transportation company will summarize and negotiate with the local logistics company. The winning party can further reduce transportation costs.

Shi Yunsheng believes that Japan and South Korea still have an advantage over China in terms of shipping capacity and price. If the government can give some support to Chinese companies in terms of transportation costs, it will reduce the cost of companies and improve the international competitiveness of China Shipping and Chinese cars.