If you can’t beat them, join them. That’s the philosophy Xinyi Glass has taken as it seeks to mitigate global supply chain challenges spurred on by a domino effect of circumstances.

Xinyi Glass recently added to its container ship collection by acquiring a Twenty-foot Equivalent Unit ship. The addition will help the company avoid rising freight rates. Photo: Unsplash.

The Hong Kong-based glass manufacturer, which has an architectural glass division near Toronto, recently added to its container ship collection by acquiring a Twenty-foot Equivalent Unit (TEU)* ship built by Dajin Heavy Industry Corp.

According to reports, Xinyi ordered the ship in 2022 and received it in May. The company previously ordered two multipurpose ships in 2020, which were delivered in 2022. These ships, Xin Yi Bo Li 01 and Xin Yi Bo Li 02, can each carry 150 TEU.

Company officials say the newest ship is necessary to control soaring costs due to rising freight rates.

“This route will reduce the cost of material transportation between our domestic and Malaysian factories and greatly improve the efficiency of the supply chain,” vice-chairman Dong Qingbo told The LoadStar.

Xinyi is among several global companies that have purchased shipping vessels in response to rising rates. Shipping costs have soared since late 2023 as conflicts and strikes flare up worldwide. Continued attacks in the Red Sea, where many vessels bound for Europe and the East Coast of the United States must travel, along with a limited number of ships permitted in the Panama Canal, have disrupted the shipping industry. Dockworker strikes in the U.S., rail strikes in Canada and longshore worker strikes in Germany have also added to the strain.

According to The New York Times, the disruptions have led to congestion and longer lead times. They also have forced carriers to raise the costs of moving shipping containers. Data compiled by Freightos, a booking and payments platform for international freight, shows that the average worldwide cost of shipping a 40-foot container rose to $4,119 on June 14, more than triple the cost of June 2023.

Xeneta, a Norway-based cargo analytics company, reports that it now costs more than $6,700 to transport a 40-foot container from Shanghai to Los Angeles and nearly $8,000 for Shanghai to New York. Those costs were around $2,000 in December 2023. The rising costs impact U.S. construction and glass companies that use cheaper Chinese materials—China leads glass production globally, exporting 28.7% of the world’s glass and glassware in 2022, compared to the U.S.’s 6.6%.

While rising costs are unavoidable for companies unable to purchase container ships, using large logistic companies can help mitigate delays. Joe Hague, Forel’s international business manager, says the Italy-based glass equipment manufacturer only uses logistics firms with a size of operation that can cope with demand and delays. As for owning transport, Hague says it only makes sense if a company needs to keep up with high demand continuously.

* TEU is a standard measure used in the shipping industry to describe the capacity of container ships and container terminals. It is based on the volume of a 20-foot-long shipping container.

Leave a Reply

Your email address will not be published. Required fields are marked *