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How China’s Impacting the Freight Industry During COVID-19

The Ministry of Transportation and Communication (MOT) in China is seizing opportunities created by COVID-19 to quickly affect change, while shipping regulators worldwide move at a much slower pace.

China freight authorities called carriers together in Shanghai to oppose new freight capacity and rate changes. The group, designed to protect China’s financial interest as a major global exporter of goods, gathered carriers on the trans-Pacific to open up additional capacity and lower their rates, making it clear to Chinese shippers the new expectations and why they are occurring. China has taken advantage of the opportunities created by the pandemic to protect its interest faster than other countries, impacting its relationship with the rest of the world’s carriers.

The United States, for instance, has laws that allow for blank sailings, or shipments where carriers adjust rate and capacity based on decreased demand, but no enforcement wing to push back against China’s or other countries’ requests when they negatively impact American carriers. Instead, the US regulators simply monitor global carrier rates and approve vessel sharing agreements. Similarly, in the EU, lawmakers failed to add requirements to the block exemption of consortia, the group’s most stringent regulatory fail-safe, rendering it useless in five years’ time.

In China, shippers are struggling with their own unique business climate due to COVID-19. The virus caused a decline in demand for Chinese exports, even though reports show that COVID-19 isn’t likely to ever be transmitted through the shipping process. Still, political tensions between the United States and China during a presidential transition along with displaced concerns about the transmission of the virus through mail carrying have impacted China’s population of shipping agents, causing China’s MOT to look at cost-saving measures.

As a result of China’s quick thinking, carriers around the world have decreased their rates or are in a position where they must do so if they want to compete for the large portion of business that China’s shippers provide. With several offices spread across China, ClearFreight is in a great position to help you seize the decreased rates while maintaining an unparalleled level of customer service. Contact one of our logistics experts today to see how we can positively impact your supply chain.

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