Alibaba’s logistics arm Cainiao launched its container booking service for air and sea freight last week, in response to the global container shortage that had driven up shipping costs to record highs.
Cainiao said the service spans over 200 ports in 50 countries, and it would offer 30-40 percent lower cross-border port-to-port shipping fees against the average market rate. The service will cover Chinese ports in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Hangzhou, and Yiwu.
A serious container shortage is pinching global export flows, no thanks to China’s lopsided balance—exporting three for every one imported recently—and delays in containers returning to China due to the pandemic.
“Most recently, the surge in demand for shipping containers in China, coupled with delays in containers returning to China due to the pandemic, has resulted in a severe container shortage and soaring freight rates which impacted export and import businesses,” Cainiao said in a statement.
“Merchants dealing with exports outside of China are also impacted as container ships rush back to China without waiting for cargo space to be fully utilized, in order to cater to the huge demand from Chinese exporters,” it added.
Data from China Container Industry Association (CCIA) also revealed that the average container turnaround times increased from 60 to 100 days because of capacity cuts in Europe and the United States, further exacerbating the shortage. Ports were reportedly struggling with lack of workforce and infrastructure to handle the surging inbound goods which in turn delay the return of empty containers.
Meanwhile, the cost of chartering a 40-foot container from China to the US East Coast soared more than 80 percent in December from June, according to Freightos data in Refinitiv Eikon.
“By working closely with airlines and cargo companies, we aim to safeguard the entire cross-border line haul network and instill greater stability into sea and air freight shipping,” said James Zhao, general manager of Cainiao Global Supply Chain.
Cainiao said container bookings are confirmed in as fast as two business days after an order is placed and promises compensation of up to RMB100 (US$15) per order if the booking confirmation is delayed.
“If a merchant’s cargo misses the departure time after booking due to Cainiao or its partner, the merchant is entitled to a compensation of RMB1,000 (US$155) per container for sea freight shipping or 20 percent of international sea freight shipping fee, whichever is higher, 50 percent of near-sea freight shipping fee, and 10 percent of air freight shipping fee,” it explained.