By Arthur Chen   Photo：jan_paulussen ，Link：Pixabay

Nowadays, it is not an easy task for Freight forwarders to find available space, competitive prices and smoothly obtain equipment in different countries and regions such as China and Southeast Asia.

As mentioned in the previous article, many freight forwarders in China have begun to express their reluctance to accept space bookings for low-value products. They are afraid that the goods will be abandoned by customers after arriving at the ports! The total shipping cost for a container to North American roughly to 30,000 US dollars which is easy to be higher than general low-priced goods such as Christmas decorations, 3C accessories, toys and other small commodities, China. The low-price container might have freight forwarders in greater risk than before.  In Ningbo, many freight forwarders are sharing to each other, "Now the priority of loading is to satisfy VIP customers only but accept their bookings as less as possible.". Under such situation, it is more difficult than ever to get containers to all clients.

　　While ocean freight has been sky-high, the scalpers who used the relationship with shipping lines and booking agency companies have taken action. They take empty containers and space, reduce their commitment to supporting their long-standing customers, and resell space to co-loading market or other new customers who desperately need space at much higher price. Many cargo owners are still willing to assume high-priced space, as long as the goods can be shipped out. It causes the market to become more chaotic. Because the margin of reselling space are more profitable, some freight forwarders who have space on hand are also unwilling to take the obligation of serving their clients the essential transportation services, and prefer to simply resell container space directly. "Selling the space directly can easily make $2,000." A freight forwarder said. At present, the business of reselling/scaling space in the group-type scalper industry chain is spreading in China, Southeast Asia countries. These scalpers require a deposit before placing a booking, and the sea freight must be paid immediately right in the vessel departure day, otherwise a delay fee will be charged. If the booking is cancelled after the space is settled, the deposit will be forfeited. It's a huge profit. The innocent cargo owners are ripped by the scalpers. It is not clear whether the scalper group is using shipping lines and booking agents? Or are there unscrupulous industry players who form alliances in private and make big money together?

One of the main reasons for the emergence of the above-mentioned temporary scalper group is the occurrence of the covid-19 in 2020. Many countries have to implement lockdown. Travel and traffic restrictions have taken effect on a global scale. This has led to a sharp drop in sales and purchases, and global trade in dramatically drop. When countries enter a lockdown state, their economic activities are restricted, and the number of port/warehouse/container freight station (CFS) staff is reduced, which ultimately slows the speed of cargo handling and customs clearance. As a result, a large number of containers were out of service and accumulated in the docks and inland warehouses for a long time. Due to restrictions on cargo transportation, shipping companies reduce the number of ships to stabilize costs and maintain freight rates. The shortage of containers has become a serious problem in the logistics industry, which not only affects the global shipping industry, but also has a strong negative impact on manufacturers, traders, and the retail industry. Such a vicious circle makes it difficult to find an equipment and a space. Demand and supply are extreme imbalance. Sky-high rates for space became like bidding at Sotheby’s auction venue, high-priced offered were obtained. In this way, it is not difficult to see the spatiotemporal background of the birth of the scalper who gave the scalping position.

On the bright side, governments of various countries have begun to intervene in the investigation of high freight rates to curb this suffocating situation. The FMC of the United States and the European Union began investigating the improper collection of port demurrage by shipping companies as early as the beginning of the year. It is reported that South Korean shipping companies such as the leading shipping company HMM are suspected of manipulating freight rates. South Korea’s anti-monopoly authorities will decide in the near future that if a fine is imposed, the fine can reach up to 800 billion won (US$684 million). According to Yonhap News Agency’s report on August 15, the Korea Fair Trade Commission (FTC) will hold a plenary meeting as early as next month to decide on sanctions against 23 domestic and foreign shipping companies for conspiracy to increase freight rates on Southeast Asian routes. The scope of the FTC investigation subsequently expanded from local operators to foreign shipping companies. It is reported that the meeting may be held before the end of August or September at the earliest.

However, the shipping company expressed strong opposition and considered it a "legitimate joint act." Declaring that it is legal to jointly adjust prices in accordance with the Maritime Transport Regulations. The industry also said that high fines may cause some shipping lines go bankruptcy. Nonetheless, the FTC believes that industry players jointly set operating terms and conditions and go beyond legal boundaries. The South Korean National Assembly expressed support for the maritime industry, believing that the fines decision will adversely affect the survival of the maritime industry that has finally entered the boom period, and plans to submit the "Amendment to the Maritime Law" in September.

Regarding the position of the South Korean Congress as well as the United States, the European Union has not yet been arbitrarily determined. We can also understand that political interests are the only determinant on the balance of legal and economic reality. Like the iron law of emotion, time will heal everything.