As a result of the pandemic and the downturn of the world economy, the Asian giant of the People’s Republic of China was also hit, but the reopening with reduced production and growing demand for goods means there is a shortage of vans to transport goods, a situation already is being felt in the country’s economy and will increase in the coming weeks as shipping containers begin to arrive at high prices of up to 40% and 70% of their previous costs.
About 80% of the products the country imports come from the Chinese market, as many American companies have their production center in that market.
The main representatives of the importers’ associations in the Dominican Republic, the National Union of Entrepreneurs (UNE), were contacted separately; the National Association of Entrepreneurs (ANI) and the experts in trade with China, Iván Gatón and Luis González.
Ángel Nader, president of the UNE, explained that between March, April and May, at the beginning of the coronavirus pandemic, orders from several countries were delayed, causing production to collapse and markets collapsing, but with excessive orders after the reopening “China has not delivered it ”, adding that many vans that arrived loaded in the United States do not leave.
This situation has led to an increase in freight costs for 40-foot containers from $ 2,500 and $ 3,5,000 to $ 8,000, $ 8,500 to $ 9,500, Nader said. The president of the UNE explained that in this situation many Dominican importers have delayed their orders due to the unprecedented increase due to excessive demand for containers and the rise in freight costs and that this will lead to price increases in the short and medium term if importers decide to take their goods with them. And those who don’t bring them will cause inventory shortages “which is actually seen in many product categories,” he said.
Ányelo Viro, vice president of the UNE and leader of the ANI, said they have been suffering from this situation for months, which is very serious because the value of the freight affects the cost of the goods. We have spent the last few months paying from China. of a 40-foot US $ 3,800 container today is between US $ 8,500 and US $ 9,500, he said.
Yes, the fact that there is a shortage of vans worldwide has caused freight rates to rise, the reasons are not very clear for this price increase, but it is a reality, also said UNE leader Mario (Marito) Llama. . Lama explained that the increases depend on the value of the merchandise, so if it’s worth a lot, you feel less and in the case of household appliances, you barely feel the price. The price of freight, he said, is about 40% to 70%, he said.
Miguel Dauhajre, president of the ANI, indicated that $ 2,200 and $ 2,300 cargoes are worth $ 8,100 and $ 8,200, and apparently this is due to the fact that China has reduced its imports from the United States and because that not the case send them empty, “there is a lack of great containers”. Added to this is the decline in the number of ships due to the pandemic, but many orders have been placed and all orders have been collected without containers.
“Many people who have their merchandise ready can’t ship them, so it’s for when there are availability and prices …” he said, pointing out that Chinese freight prices are expected to fall again in the Chinese New Year. “but assumes it is not really known”.
He argued that economic goods will have an increase of 15% to 20%, although the most expensive goods are not affected as much. He indicated that no food comes from China, but manufactured goods and supplies.
Experts in China
Luis González, an expert in Asian affairs, especially China, assures that for many years China became the world’s largest exporter and surpassed Germany, which for a long time, has become the world’s supplier and factory more than ever. Faced with the high demands of the pandemic, China now has a container shortage, which is a clear signal of the growth of this economy.
Mainland China is a reality that we must accept and learn from. Think of China as an ally, as a friend who can be the supplier at one point or another, but at other times it can be the big market that the countries of the world need, including the Dominican Republic, promoting its country brand with products. that are unique in the world, such as organic cocoa. tobacco, amber and Larimar, said González.
Iván Gatón
For Iván Gatón, a specialist in international politics, it is clear that geoeconomic Asia as a whole is the area with the largest commercial exchange in the world, and that intra-regional trade has led shipping companies to prioritize the trans-Pacific route and then to the transatlantic, because they are paid better. “From a geoeconomic perspective, we see the change of axis and back to the Asian world as the planet’s economic center of gravity, which could be in the Strait of Malacca, the modernity that gave primacy to the Atlantic Ocean, since the beginning of globalization. which began with the modern era, which begins with the time of the “discovery”, gives after 500 years the transition to the old world that contained beyond the seas the mythical lands of Cipango and Catay