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The Current Situation of Yiwu Foreign Trade Enterprises Under the High Sea Freight

As the world's largest commodity distribution center, the Yiwu market is connected with 2 million small and medium-sized enterprises. The continuous growth of expensive freight charges is approaching the lifeline of the majority of foreign trade companies. Also, there is even the possibility of industrial migration in some significantly impacted industries. The seasonal items industry is a traditional advantageous industry in Yiwu. There are thousands of enterprises engaged in seasonal items, and nearly 90% of seasonal items in the world come from the Yiwu market every year. Yiwu seasonal items enterprises are facing the test of high freight charges.


1. The impact of rising freight charges on seasonal items


The original prices of seasonal items are very cheap, so customers are more sensitive to price. As the freight charges increase, the cost will increase for customers. International customers will consider the order issue themselves. Enterprise managers express their helplessness to the influence of rising freight charges. The company is well-known for its seasonal items in China.


The increase in freight charges is still a secondary issue. Seasonal items companies said that before the global pandemic, they negotiated orders with customers before organizing production, and then delivered them completely within a specified time. However, the global pandemic has disrupted the production process of enterprises, many orders that are supposed to be sent overseas have been stored in the warehouse for several months since there are no containers that can be ordered. This brings a series of problems, companies can not get the balance and the funds are occupied. Also, goods are piling up in warehouses so that storage costs are rising.


2. The impact of rising raw materials on perfume enterprises


The rising prices for raw materials are even more serious. Seasonal items companies said that since the second half of the year, the impact of rising prices of commodities has been even greater. For example, the cost of raw materials needed to produce seasonal items has increased significantly.


Similar problems are also troubling the perfume manufacturing industry in Yiwu. Perfume manufacturing is a newly developed industry in Yiwu in recent years. However, facing the congestion of the main channel of global foreign trade, perfume manufacturing manufacturers in Yiwu are also facing problems such as higher freight charges than the value of goods and overseas orders remaining for shipment. The problems faced by Yiwu's seasonal items and perfume industry are just a microcosm. Many small commodity manufacturers are facing similar problems such as foreign trade commodities being stranded for shipment, funds being occupied, and freight charges exceeding goods values. This has also forced some enterprises to stock up, suspend orders and production.


3. Measures were taken against expensive freight charges for general merchandise products


However, facing many difficulties, some companies are also actively looking for measures, such as increasing R&D investment, actively adjusting the product structure and increasing the added value of products. At the same time, they are trying to reverse the passive situation of low gross profit by developing their own brands and exploring the domestic market. In addition, the local government is also active in addressing the problems faced by small and medium-sized enterprises. For example, faced with the problem of increasing risks in merchandise trade in department stores, Yiwu is accelerating the upgrade of export credit insurance products. There are more than 1,100 enterprises that are covered by the government's credit insurance for small and micro exports of general trade, which is up more than 25% year on year. At the same time, Yiwu also innovated more than 20 free trade zones financial products such as maritime loans, cross-border E-commerce loans, cross-border fast loans, and foreign trade E-loans.

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