CAMAL | CAMAL Group

International Shipping Freight Spikes Dramatically on Geopolitics and COVID

November 28, 2020November 30, 2020

The international freight market experienced a cold winter in April and May. Freight rates have returned strongly now, and the freight rates of all routes are at their peak. The freight rates of major trades between the East and the West remain at a high level. According to the Shanghai Export Container Freight Index (SCFI), the spot price on the West Coast of Asia to America last week increased by 184% over the same period last year. The spot price on the East Coast of Asia to America is almost twice that of last year. The Shanghai-Northern Europe spot freight rate increased by 85% year-on-year, and the Shanghai-Mediterranean route freight rate increased by 77.6%. The reasons for the price increase are as follows.

Overhead View of Qingdao Port. Source: HBIS56

1）Increased trade volume between China and the world

The backlog of international demand due to the epidemic began to be released. In response to the development of the epidemic, countries such as Europe and the United States have adopted a series of measures to stimulate the economy and consumption, which has increased global import demand, especially the United States. At the same time, China’s production is on track, which can fill the gap in consumption and production demand in other countries and regions. The amount of imports and export increased significantly.
According to previous statistics from the General Administration of Customs, China’s foreign trade exports in July increased by 10.4% over the same period last year, and in August it increased by 11.6%. At the same time, September has always been the traditional peak season for American routes, and the purchase of supplies for Thanksgiving and Christmas from abroad brings a large number of orders.

CAMAL’s cargo of dump trucks being loaded in China’s northern port of Qingdao. The cargo is loaded directly onto the ships for transport to our clients worldwide

2）Insufficient capacity and poor container turnover

The number of Chinese export orders has surged, and the demand for containers has continued to increase. China’s container shipments in September were 230,000, a year-on-year increase of 43.75%. At the same time, as the overseas epidemic has not been effectively controlled, the speed of container turnover has decreased. A large number of containers are exported overseas, but it is difficult to return to the country in a short time. The short-term mismatch of imports and exports has further exacerbated the short supply. In September 2020, the average price of China’s container exports was 3,803.75 US dollars per unit, an increase of more than 400 US dollars from March. It is expected that it will take several months to achieve normal container turnover.

CAMAL staff and third party inspector from SGS inspect and load cargo in China’s Jiangsu province. We assist clients source from China and ensure smooth end to end procurement

3）Congestion of international waterways causes a decrease in punctuality and an increase in new fees

In some countries, the capacity has not been restored in time because the epidemic has not been effectively controlled. Insufficient international transport capacity, which in turn caused international freight rates to rise.
The Panamanian Ministry of Health has restricted the number of workers on the canal, and has imposed stricter inspections and additional procedures on transit vessels, resulting in an extension of the vessel’s voyage. The Panama Canal is currently experiencing serious congestion and delays. Ships carrying cargo from all over the world have to wait a few days before passing through the Panama Canal. Some shipping companies impose congestion surcharges, loss of cabin fees, and high container surcharges on specific ports.

Cargo being transported through the Panama Canal. Source: CATO TW

So, what happened to China’s exports during COVID?

During the spike of COVID, China’s exports surged by 9.9%, and imports grew by 13.2%. At the start of the pandemic, there was a reduction of imports and exports however China recovered very quickly and bounced back in July. This recovery was caused by the increase in demand for products from China and consumers buying the products from around the world. The most popular items that were exported from China during COVID were: pharmaceutical products, special yarns, and medical equipment.

China’s imports were expected to increase by 0.4% but instead they have increased by 13.2% and are continuing to rise, the main causes for the rise comes from meats 40.5%^, grains 35%^ and soybeans 17.6%^.
Other materials that caused China’s imports to rise are petroleum, vehicles and machinery. These are expected to stay on an upwards trend for the foreseeable future.

The recent news indicates China’s new trade deal will resume logistic services in the US and Europe, this has significantly contributed to the success of China’s import strengths.

One of CAMAL’s equipment suppliers outside of Shandong conducts temperature check on employees

Why is there a shipping container shortage?

The global container shortage has been caused by the increase of consumers buying products from China particularly in Europe and the US. The containers have had a significant impact on China’s imports and exports. These are:

The unexpected demand for importing from China
The increased demand for products from China
China importing more goods
China exporting goods worldwide

The increased imports and exports have caused the shipping containers to become vacant for longer and taking longer to return back to China. This is causing a delay on China’s ability to export goods out of the country to other parts of the world.

Ways that China can improve the efficiency of their imports and exports and recover the logistics sector

Invest in more freight forwarders
Lowering consumption tariffs
Remove the import barriers facing advanced commodities
Transporting empty containers back to China at low cost and with high efficiency in order to alleviate the shortage of containers in China
Develop new technologies to be utilized by logistics companies to create a. ore efficient process.

If you are looking for an efficient China sourcing agent or need assistance finding sourcing agents in China, please do contact us and we may be able to help you or point you in the right direction.

8 Things Critics of China’s Belt & Road Initiative are Not Telling You

May 27, 2019May 27, 2019

CAMAL’s Managing Director Mr Walter Ruigu wrote the article attached to give a better understanding on Belt & Road initiative.

”I attended the second meeting of the Belt & Road Initiative (BRI) in Beijing a couple weeks ago. The event was a more subdued affair compared to the previous meeting and similar multilateral forums such as FOCAC. This was partly in response to the ever-growing list of negative narratives that have been lobbed at the initiative that range from references to ‘debt traps,’ new colonialism and other labels that often leave readers perplexed at what exactly is going on. I would like to point out essential components of the BRI that critics are missing. Belt & Road

what does China’s foreign minister visit in Africa symbolize?

January 11, 2019

Debates have continued to erupt from different parts of the globe concerning the continuous improvement of China and the African countries.
Just the other day, Councilor and Foreign minister Mr. Wang Yi from China embarked on a 5 days visit in Africa. The minister visited four Countries namely Ethiopia, Burkina Faso, Gambia and Senegal.
The main aim of this visit was to advance China and Africa’s strategic cooperation and development as well kick start the implementation of agreements reached at during the FOCAC 2018 summit.
The visit was also a reiteration of China’s commitment to the census of consensus of promoting and protecting international trade and green economy development.
China’s relations with Africa should not be politicized in anyway because China is not helping Africa with an aim of taking the resources from them. The projects initiated by China in Africa are for the better of the continent in as much as China is benefiting in the long-run.
The best thing China did to Africa was creating competition as we can see, other countries are venturing in Africa with an aim of competing with the rivals and Africa is benefiting a lot.
Wang Yi was in Ethiopia with an aim of exploring the best possible ways of employing Ethiopia’s natural resources so as to transform its agricultural dominated economy.
To listen more about this visit, feel free to check out the video attached as CAMAL’s Managing director sheds more light about the issue at hand.

CAMAL opens office in Shenzhen to serve growing Africa demand

November 19, 2018November 30, 2020

CAMAL Group loading cargo in Guangzhou, China for our client in Ivory Coast.

CAMAL opens an office in Shenzhen as we continue to improve our services for our Clients. The Office will give access to Guangdong province especially, Guangzhou, Foshan, Zhuhai and environs. Shenzhen is a transport hub in China as it has one of the best modern ports in the Country Shenzhen being one of the most fast growing cities in China, there are many opportunities which CAMAL has identified and delegated them to the new office. The port will see to it that;

CAMAL clients will see improved lead time due to the efficiency of port activities in Shenzhen.
The goods imported from China through CAMAL get to the clients in good shape because of the improved modern way of handling containers.
There is smooth loading of cargo to client’s destination.

Port of Shenzhen consists of facilities in the following areas: Da Chan Bay, Shekou, Chiwan, Mawan, Yantian, Dongjiaotou, Fuyong, Xiadong, Shayuchong and Neihe this means that the loading of any cargo procured from the mentioned places will get to the port in due time.

CAMAL has been doing business in China for a long time; the firm understands the distribution of manufacturers and suppliers in different parts of China. From Shenzhen office, CAMAL will be able to help clients procure from the following cities,

Guangdong Zhongshan: Machinery and electronics, Packaging, Lighting,
Dongguan: Electronic products
Guangzhou: Automobile
Shenzhen: Electronic products
Yunfu: Stone, Kitchenware

The advantage of using Shenzhen office for your procurement purpose include:

CAMAL has a technical team which has lived in China and they have deeper understanding of products in this part of China.
CAMAL will do the negotiation on your behalf so there will be no language barrier between you and the supplier.
CAMAL will help you inspect the cargo before it is shipped to ensure you have the right products.

The firm will also ensure that the clients who have interests in technology are best served by the institutions which have specialized in that field. CAMAL has seen the need to be part of the firms pushing for advancement in technology because this is the only way firms out there will focus on cost cutting at the same time being efficient in production. Shenzhen office is also connected to a chain of construction machinery suppliers i.e. the yellow machines and also construction materials i.e. tiles, prefabs and many more.

Other than assisting the clients to procure from Shenzhen and other cities in China, Shenzhen office will assist it’s the client to carry out successful trips to the supplier. These trips are aimed at assisting the client to meet the service provider and understand how the business can cut cost by procuring from China.

Shenzhen Port. Picture Courtesy of Wikipedia

Shenzhen office will be headed by CAMAL’s head of Operations Mr. Razack Magagi. Feel free to reach out for by writing to shenzhen@camaltd.com

If you are looking for a China sourcing agent or need assistance finding sourcing agents in China, please do contact us and we may be able to help you or point you in the right direction.

KNCCI Marsabit County gets investors from China courtesy of CAMAL

November 15, 2018

CAMAL recently organised a trip to China for KNCCI Marsabit Chamber where the delegates had special interests in getting investors and also meeting suppliers. The 5 days trip was aimed at value addition to the Chamber and the office in China delivered beyond expectation.

CAMAL facilitated- KNCCI Marsabit and Guangdong Chamber of Commerce, B2B meeting with Chinese investors. The firm witnessed Signing of an MOU, exploring business cooperation and investment areas in Marsabit County. The talks held were aimed at identifying potential business opportunities from Marsabit

KNCCI Marsabit signing MOU with Chinese investors courtesy of CAMAL

The Chamber also had some interest in meeting construction material suppliers in China. CAMAL took the delegates to a company where they showed special interest in procurement of construction materials such as tiles, prefabs materials etc.

KNCCI Marsabit meeting with Chinese construction, energy and building materials companies.CAMAL also took KNCCI Marsabit to visit Solar panel factory. The Chamber had requested CAMAL to facilitate this meeting as they had a project which involved solar energy and they wanted to know where they can get them from. The meeting was successful with the supplier promising to work with CAMAL to deliver high quality products to the Marsabit County as soon as the order is placed.

KNCCI Marsabit Visit to Solar Panel factory in China courtesy of CAMAL

CAMAL will continue to organise such trips for the client to understand better opportunities and how CAMAL can assist them to procure from China after or during the trip. CAMAL’s value addition include;

Identification of reliable suppliers for our clients;
Carrying out factory due diligence on behalf of the Client;
Engaging with the potential investors;
Advising the Client on how to procure Products from China;
Facilitating preliminary discussions by having an interpreter who understands Chinese and English well to get rid of language barrier.

CAMAL attends the China International Import expo (CIIE)

November 6, 2018

It is a significant move for the Chinese government to hold CIIE to give firm support to trade liberalization and economic globalization and actively open the Chinese market to the world. It facilitates countries and regions all over the world to strengthen economic cooperation and trade, and to promote global trade and world economic growth in order to make the world economy more open.

CAMAL attending China International Import Expo

Countries around the globe have been pushing for Balance of Trade. CAMAL has been attending forums which are aimed at trade improvement with China. CAMAL is currently attending the first CIIE in Shanghai China with a goal to solve Export problems to China. President Xi Jingping opened the event and gave a keynote speech with main points being:

China will ease barriers for the following industries

Financial services, Agriculture, Mining and Education

China will Increase purchase of Imported goods by lowering the tariffs involved
China will create a better business environment with reasonable system of rules including punishing intellectual property violators. China would work to protect the interests of foreign companies.
China will import as much as $30 trillion in goods and $10 trillion in services within the next 15 years.
China intends to make Shanghai the world’s leading financial centers by the year 2020

The event has had thousands of companies attending from various countries. Kenya being one of the countries, there is a national exhibition going on with an aim of winning more market for the Kenyan products i.e. coffee.

Kenya showcasing products and services in Shanghai during CIIE

From this event, CAMAL intends to assist more people to export to China. The firm has deep understanding of demand cycles in China. CAMAL will therefore find the right market for products in China. CAMAL will also add value to the exporters to China by doing the negotiation on the clients behalf.

CAMAL’s Managing Director attending to a client in Shanghai during CIIE

CAMAL-end to end procurement solutions.

November 5, 2018November 30, 2020

CAMAL has continued to assist clients from various parts of world to source from China. The firm understands every business is striving to cut on cost during its procurement cycle without going for low quality products. CAMAL is a solution finding firm for such businesses.
CAMAL has built relationships with the manufacturers in China and has the ability to find you the best suppliers in China. Recently, CAMAL conducted a factory visit in Shanghai to inspect the quality of the product before shipping them to the client. This was for a client who procured weighing equipment in bulk for supermarkets.

CAMAL– Inspecting the cargo before shipping

CAMAL has rich experience in procurement. The firm has technical experts who understand Client expectation. The engineers in China will ensure the client get what our client ordered. CAMAL often co-operates with international third party inspection agencies such as SGS to ensure the factory is competent in production.

CAMAL- Confirming product before loading

CAMAL also offers advice on the best loading ports when procuring from China. CAMAL has done successful shipping from China, this puts CAMAL in a better position to advice the client the best port to use depending on the nature of the products being shipped.

Are looking for a China sourcing agent or need help finding sourcing agents in China, please contact us and we may be able to help you or point you in the right direction.

What is the progress on China-Africa Cooperation?

October 22, 2018October 22, 2018

There is great need to monitor the progress of China-Africa cooperation. In the recent past, people across Africa have been having different opinions concerning the benefit, losses and worries of China investing in Africa. CAMAL being on the forefront of procurement from China and investment advisory, the firm has been analyzing these relations closely since they started. The success of these relations will be realized by making Africa better in terms of development.

CAMAL’s Managing Director Mr. Walter Ruigu has a deeper understanding of China economy. Being a first class procurement firm, CAMAL believes that from a macroeconomic perspective , China-Africa trade relations continue to boom in both directions. The future of the trade looks positive because the two parties are complimenting each other.

It is true to say that the RMB depreciation against the USD has affected business in one way or the other . China has benefited because the exporters are working with RMB but they are being paid by USD which higher.
China market being one of the largest consumer of the soybeans from USA, has been suffering because of the high tariffs that USA has imposed on the produce. China is now looking for other sources where they can be getting the soybeans as an alternative to the existing problem. Africa however has not yet tapped the full potential of these supplies as the areas which produce this commodity is under the terrorists Boko Haram in Nigeria.
Russia is giving land to Chinese for them to be able to cultivate and export more to china. The existing trade war is changing the global supply chain.
Africa should work on quality and standard products if the exports from the continent will be accepted in the Chinese market.
There are strict laws in China concerning what they are importing. Actually, if china gets faulty products, they can end the supplies from that country because of a single firm which has not meet the standards. China has had these restrictions to protect the local industries. The restrictions do not necessarily affect Africa, the restrictions cut across the globe.
China just like any other country has companies that are producing with an aim of making profit.In China, there has been a mindset of targeting high volumes and low profits. There is also large fragmentation of Chinese private owned companies wanting to do business with Africa. Most firms are looking for specific projects and business opportunities.
There is a lot of competition from other countries i.e. Turkey, India and Russia especially for the industrial Chemicals; the depreciation of the RMB has made the prices competitive.
The reason why the numbers have gone down in from the macro perspective is China’s economy has shifted from one that was focused on fixed asset investment to one that is now focused on domestic consumption. Long before this happened, the commodities were moving from Africa to China to feed the economy. A good example is Angola which used to export petroleum to China but this has decreased but this situation does not mean the relations are worsening, this is only getting better.

You can listen to the whole interview and get more insight about the matter. Courtesy of Eric Olander for Africa-China reporting Project interview and Managing director

What will China gain from the growing cooperation with Africa?

October 19, 2018

The discussions in the recent past have been inclined on how Africa is set to fall in the “debt trap” which many people think is what China wants. Well this is not the case because it’s not 100% about Africa gaining from China. It goes without saying that, when two parties enter into an agreement of any sort, and then there are mutual benefits in that agreement. This happens to be exactly the same thing happening in the China-Africa cooperation. CAMAL has been attending the forums which are aimed at bringing a better continent with the Asian country.

Many people have continued to see the impact China is having in Africa in terms of development and poverty alleviation in Africa. Africa has been able to influence policy formulation in China thanks to the relations. If you want to fight any negative idea in a country you have to deal with the source of that problem first. A good example of this is the when Africa became united and said it’s illegal to do ivory trading, China adhered to that and being one of the biggest market of ivory from Africa, then the elephants and rhinos are now safer than before.

China has been speculated to be colonizing Africa slowly by coming up with attractive monetary deals which will entice African leaders to allow China to invest in their countries. Mainly, China is pushing for the cooperation with Africa, for the following reasons,

Political connection with Africa. China knows that Africa represents over 50 votes in the United Nations and other international organizations.
China’s quest for new Markets. As the domestic market become saturated while more and more Chinese are going global, Africa represents a new market for the products produced.
As the Chinese economy continues to grow, there are certain products that Africa can provide depending on the demand from China. A good example is the Minerals from Africa. More Chinese are coming to buy Manganese and Marble from Africa and CAMAL has continued to connect the suppliers in Africa to the buyers in China. More and more suppliers are now trusting CAMAL to do the negotiations with china and bringing them buyers from China.

For those who are for the idea that China is out to colonize Africa, there is need to understand that the companies in China operate like any other Company in the world. The end product should bring profit to the company. This is the reasons why, companies in China are working closely with CAMAL to help them cut on cost by getting their raw material from Africa in order to ensure that the locals in Africa where the minerals are being mined benefit in one way or the other. If these relations were not for a good reason, then the number of countries in FOCAC would be less. From the previous engagements, only one country is not in the China-Africa cooperation.

China is set to adopt innovative technology which comes from Africa. A good example is the M-PESA innovation from Kenya. This technology has continued to wow other countries across the world, china being one of them. To support more of these innovations, China has established innovation centers in different parts of Africa where Chinese are offering different projects to the locals to see to it that they embrace the available technology from China. This has mainly been happening in the Agricultural sector.

China has also benefited from Africa in terms of techniques of environment conservation. Due to industrialization in China, there has been an increase in the pollution levels making the cities in China a health threat. However china has visited some of the African countries such as South Africa which is one of the most industrialized countries in the continent and learns how they manage pollution in the country.

Generally we can say that both parties are gaining from the relations and if this continues in the future, China and Africa should have more benefits for each other. CAMAL continues to push for more exports from Africa to China; the firm believes that china should build more capacity in Africa to facilitate the standard they require because the resources are there. The procurement by China from Africa should not necessarily revolve on raw materials but also finished products. The best thing about the cooperation China is having with Africa is that it has brought competition among the super powers. More European countries are now investing heavily in Africa to match what China is doing and this means more development for Africa.

You can watch the interview CAMAL’s Managing Director Mr Walter Ruigu had with CGTN about this topic

CAMAL’s Managing Director reviews the achievements of FOCAC2015

October 17, 2018

China- Africa cooperation has been going on for some time now. CAMAL’s Managing Director Mr. Walter Ruigu was spent some time to review the progress of FOCAC2015 which was held in South Africa. The theme was how to facilitate the movement or transfer of the industrial knowledge from China to Africa.

From the macroeconomic perspective, the conference was successful because China stepped up the pledges from $20 billion to $60 billion which will be in different forms, they will increase financial funding to develop the SMEs
China will offer more training support to African Students who will learn more about technology.
From a company level FOCAC2015 could have done more as the attendance was mainly done by the Government state owned companies instead of firms from Africa. Africa should have more of these forums so that we can they can be a step in the same direction with China.
China’s economy has been slowing down in that China has moved from economy that was based on investment and to fixed asset to domestic consumption. This means that Africa being a large trader in Commodity trading, the continent has been suffering from the economic fluctuation of the prices of these commodities.
The Chinese manufacturing sector has been operating in over capacity i.e. the steel industry; this means there is need to move some of these industries in Africa. However, there is a lot of information which would help the industries in China to move to Africa. Many small medium enterprises are closing down because they do not know how to move to Africa because they do not have the regulations of the country they would want to move to.
The companies in Africa need to engage with China at a macroeconomic level for them to benefit. Once the African companies engage with the big companies in China, definitely the issues of infrastructure will be addressed. China is able to integrate many companies to come up with one common industry.
The market in china cannot be gauged by looking at the population, this is because of the difference in the consumption pattern and the marketing plans. African countries have to research more on Chinese market. Africa should focus on value addition so that export can be increase to China.

Comparing this with FOCAC2018, there has been an improvement as many companies came on board and attended the forum. Unlike in 2015, more countries are sending companies in china to carryout market research, procurement purposes and to get investors. CAMAL continues to be on the forefront to see that clients from African Continent get the best from china. CAMAL also continues to link more industries from China to the African market making it easy for entrepreneurs to source from China. The theme of these forums has been to see to it that Africa has achieved economic growth through these relations in the long-run.

Attached is a file with an audio where CAMAL’s Managing Director Mr. Walter sheds more light on what Africa needs to do for a smooth cooperation with China.