Has gym equipment gone up in price? On this year's Black Friday, many people were surprised to find that there wasn’t much discount on many fitness equipment for strength training, and dumbbells, kettlebells and other fitness equipment were not easy to buy. Why are dumbbells so expensive? It is mainly due to the fact that many fitness equipment are manufactured in China, and the prices in China have an impact on the global market prices. A long list of fitness equipment brands have raised prices so far this year.
Why has the price of fitness equipment in China been increasing recently? In addition to the sharp increase in the cargo volume and prices, it is very difficult to reconcile the shipping space of the head-haul transportation and the delivery timeliness of the last step in the transportation. After packaging, fitness equipment are large in size and there are also certain requirements on timeliness, so the logistics channels in the market cannot be well satisfied.
Affected by the epidemic, the ex-factory prices of fitness equipment manufactured in China have continued to rise for many reasons. The main reasons are as follows:
Air transportation costs rise
The price of air transportation has also jumped to 55 yuan/kg from more than ten yuan/kg last year. The highest price came in June this year, even exceeding 100 (RMB /KGS)/ kg for a time. At present, the express delivery companies at the end of the transportation have also increased their freights one after another.
The report from the European Control Organization showed that the number of flights in Europe decreased by 54% compared with the same period of last year. It should be noted that the reduced capacity may not be restored again--the Guardian reported on the 27th that 193 of 740 commercial airports in Europe will face bankruptcy in the coming months if the passenger traffic does not start to recover before the end of 2020.
Due to the limited transport capacity, the air freight price of the European routes has exceeded 40 yuan /KG since late October, and the rising trend hasn’t stopped yet.
Many ground crews in Los Angeles, USA were infected with COVID-19 and all three major Chinese airlines were suspended from December 1st to 10th. In addition, Russia's Volga-Dnepr Airlines recently also announced that their 12 Antonov-124 aircraft will be grounded due to safety incidents.
With 12 Antonov-124-100 jumbo transport planes, the company accounted for the bulk of the world's super heavy air cargo market. The An-124 is one of the largest cargo planes today. The grounding of 12 Antonov-124 will put further pressure on the extremely stretched global supply chain. The logistics situation in the future is not optimistic at all.
Rising costs of maritime transport
Shipping prizes rose
The shipping prize has soared from 1,400 US dollars to 5,000-6,000 US dollars, reaching a historical peak. It is reported that the freight of the western America routes has increased by about three times as compared with the beginning of the year, and the freight of the South American shipping lines has also skyrocketed. Almost none of the routes has been spared.
In October, the price of African shipping lines rose by 100%, that of the US by 60% and that of the European by 50%. By Wednesday, the freights of eastern South America, western South America and the Caribbean routes have been soaring to $4,600, $4,800 and $5,000 respectively. The freight from Yantian to Algeciras was even as high as $10,000.
Short of freight space and containers
Influenced by the epidemic, China's total import and export volume decreased in the first half of the year. In order to save costs, many shipping companies chose to use small ships, rather than large ships, and reduced the number of containers in their cabins. At the same time, shipping companies also reduced the sailings, resulting in a drop in shipping capacity.
As a result, When the import and export began to recover and the shipment volume increased in the second half of the year, the existing transport capacity of shipping companies was insufficient to bear so many containers.
In the first three quarters of this year, China's total exports of goods amounted to 12.71 trillion yuan, increasing by 1.8%. The total value of imports decreased by 0.6% to 10.41 trillion yuan.
In the third quarter, compared with the negative growth in the first and second quarters, China's imports and exports rebounded, with its growth rate reaching 7.5%.
The imbalance between import and export has led to a large number of containers exported with goods but not returning in time. The uneven distribution of containers has led to an embarrassing situation: there is a shortage of containers in China and a stacking of containers in foreign countries.
The lack of containers has become normal due to the shortage of international logistics capacity. At present, 40-foot containers are in the most short supply in the market, and the "shortage" tide may last until next April. Sources pointed out that nearly 500,000 Christmas products had been stranded at the docks for more than three weeks.
The shipping company replied that it was due to too many lockers remained abroad. China's Xiamen, Ningbo and Shanghai ports are facing a severe container shortage.
According to the relevant data of Container XChange, the Shanghai Container Availability Index is 0.07, which is a low in 2020 (when the data is greater than 0.5, there is a surplus of container equipment, and when it is less than 0.5, there is a lack of facilities ).
On November 17, container shipping company Maersk issued the latest notice of the freight during the peak season to customers, stating that due to the COVID-19 epidemic, the demand has been fluctuated.
What’s more, a bottleneck in the global supply chain also strengthened that trend. Booked shipping space for export at Chinese ports have to be canceled or their shipments may be delayed due to the lack of containers.
Epidemics broke out at home and abroad one after another in the first half of the year, which has led many shipping companies to reduce their orders for containers and even postpone the original contracts.
And the explosive growth of containers in the third quarter made it impossible for factories to produce so many in time. Cifnews learned that the maximum monthly production of container manufacturers in China currently is about 300,000 TEU, but it is still in short supply.
In order to remain the freight space stable, 500-600 US dollars will be added to the ridiculously high 5,000-6,000 US dollars. Even so, shipowners can often be able to meet part of the demand for freight space.
Present port condition
As the two major ports in the United States, the Port of Long Beach and Los Angeles are under heavy pressure. The influx of goods and the shortage of port equipment and manpower have resulted in severe congestion at both ports.
Amazon's warehouse nearly bursts with goods. The current situation is that in the Port of Los Angeles, the number of empty containers has reached a record 330,180 TEU, more than twice as many as the full export containers.
The shipping company believed that instead of waiting for containers full of US exports, it would be better to ship the empty containers directly back to Asia. In fact, since July, there have been reports that container throughput at several ports in the United States has increased sharply.
The massive influx of goods into the ports and less dockworkers caused by the severe epidemic in the United States have intensified the congestion in the ports of Los Angeles and Long Beach. Container ships at the ports of Los Angeles and Long Beach could be further delayed in the coming weeks (even months).
The Port of Los Angeles is severely congested, and the ship arriving at Los Angeles usually has to wait 3-4 days before entering the berths to unload the containers. Currently, the time limit for the western US warehouse is 18-20 natural days after a boat sets sail, and 20-28 natural days for entering the middle and eastern warehouses. "
Some ports in Europe are also enduring a heavy backlog of goods. For example, Germany, Britain and France have piled up a lot of goods in ports, and some channels have stopped receiving goods, because it is really difficult to guarantee the time to take delivery of goods.
The railway resources are in short
At present, the increase in railway freight prices is relatively large, close to the increase in air transportation, which is around 20%, but the overall timeliness of transportation is in a normal state. Now, the China-Europe freight train from central Europe to Russia and Southeast Asia and the routes in European countries are normally operating.
The data show that the number of trains per month has been increasing for six consecutive months, and it has remained stable at more than 1,000 for five consecutive months. According to the relevant data, in the first half of this year, there were 5122 China-Europe freight trains, with a year-on-year of 36%.
Delivery of logistics at the end of the transport
Whether it is delivered by truck or express, there has been a mass strike in the United States, which led to more and more job vacancies. Now the express delivery has been paralyzed and can only run slowly. Affected by the lockdowns of some countries, the timeliness for the delivery of goods on European routes will naturally be delayed more or less.
Take UPS Europe as an example. From September 20th, the peak season surcharge from Chinese mainland and Hong Kong to 19 European countries will be increased significantly. In addition, USPS also increased the price of all domestically competitive commercial packaging from October 18, 2020 to December 27, 2020.
Prices in major western European countries have risen significantly, with Britain, Germany, France, Spain and Italy rising the prizes to around 50-60 yuan/KG, rising by around 10-20%.
Excessive backlog of previous orders and an increase of source materials’ prices
Why is there a shortage of gym equipment? With the global spread of the epidemic, the demand for indoor fitness equipment has surged. In France, Germany and other markets, they were sold out of stock for a time. Enterprise orders have increased significantly, and orders for products such as kettlebells have been scheduled until next April.
A large number of purchase orders for fitness equipment led to a shortage of raw materials for accessories, which in turn drove up the price of the whole product. During the peak season this year, the price of raw materials increased nearly three times compared with that of previous years.
The RMB continues to appreciate
The RMB has been appreciating and has now entered “the 6.5 era”. Based on the exchange rate of RMB against USD of 7.1765 on May 27th, the appreciation of RMB has exceeded 8% so far. The export value of an import and export enterprise from July to October is approximately 150 million US dollars, and the settlement time is generally 30 days or 45 days later than the shipping time. Based on the exchange loss of 0.20 per US dollar, the loss amounts to 30 million RMB yuan.
The appreciation of RMB alone has offset most of the net profits of small-profit exporters such as furniture, textiles and clothing. As the production cycle of fitness equipment is relatively long, it is greatly affected by the appreciation of RMB. In this regard, people in the industry points out that the appreciation of RMB is still not over, but the pace will slow down and fluctuates in a short period of time.
Risks posed by the rebound of COVID-19
Recently, the epidemic situation of COVID-19 has rebounded. Two new cases were reported at Shanghai Pudong Airport. The patients were working at UPS International Freight Forwarding Station before they were diagnosed. Once confirmed, the freight forwarding station at the Airport was closed again, and all the UPS cargo in the east of China would be transferred.
As tighter inspection was implemented, the logistics cost to surrounding areas of Shanghai has also risen. The Hong Kong epidemic has also rebounded, with a large volume of DHL cargo piling up. At the end of the year, the logistics congestion will probably be worse.
At least 12 European countries, including Germany, France, Ireland, Italy, Spain, the Czech Republic, Belgium, the United Kingdom, Austria, Greece, the Netherlands and Poland, have announced "lockdown” to contain the epidemic.
A freight forwarder has issued a notice that British goods has been excluded by sea transportation from today, and the railway will also stop receiving British goods from November 11st to 15th, for fear that Britain will be taxed twice after leaving the EU. Blockades, riots and terrorist attacks have caused chaos in the city. Traffic jams have a direct impact on international express delivery.
After many countries in Europe announced the lockdown, express delivery in the European region announced that it would be delayed or stopped. UPS, DHL and FedEx have issued notices about the delay one after another. Air transportation is still on, but the timeliness is unstable. Thus, express delivery delays will be quite common.
Large-scale demonstrations and protests took place in Spain, Germany, France and other countries, which mainly aimed at the lockdown measures against the COVID-19 pandemic. In Dublin, the capital of Ireland, a criminal stole a post office van with valuable parcels, Christmas gifts and letters in it. The police searched the area and found the van, but many packages of goods bought online had disappeared.
Will the prices fall in the future?
Prices will not fall in the next six months. In that period of time, cross-border logistics will only get worse in terms of prices, shipping space and timeliness. The global epidemic situation has not been clear yet.
What can only be predicted now is that the immediate impact such as the logistics congestion will become weaker over time with the implementation of various epidemic prevention measures or economic stimulus policies, but it will take time. It may be hard to repair the damage made by the epidemic in the next year.
Will the increase in logistics cost affect customers' consumption?
Yes, higher logistics costs will come as a blow to international shoppers. Whistl, a logistics management firm, conducted a survey to find out online cross-border purchases by consumers in Britain, Ireland, France, Germany, Australia and the United States.
The study found that to save costs was the main reason to make online cross-border purchases (64%), followed by purchasing locally unavailable products (60%), then purchases of unique products (51%) and access to low and free freight (39%).
In all countries, when people purchase overseas products online, they care most about the timeliness of logistics (67%); then fraud and inferior product (52%); cost and complexity of returning products (46%); followed by freight (36%). Rising freight and logistics timeliness have affected the shopping experience.
Ntaifitness chooses a high-quality freight service platform to help customers reduce the cost of purchasing fitness equipment in such a difficult business environment.
We recommend that customers and agents should make a good plan for the purchase of fitness equipment in gymnasiums and purchase the fitness equipment in advance in order to avoid the difficulty in delivery of fitness equipment due to rising costs and transportation delays.