Ningbo container truck industry faces cost inversion, industry association pushes for ~10% freight rate hike

By Zhang Yun, Wei Guanhong | Daily Economic News

Overview

In the past week, ports have experienced a small peak in cargo shipments, but conditions for container truck drivers remain dire. On September 19, the Ningbo Transportation Association and the Ningbo Logistics Association jointly issued a statement warning that recent sharp increases in diesel prices have placed severe pressure on fuel costs for road container transport enterprises, posing significant challenges to industry operations.

Industry in the Red

Liang Sanbo, President of the Container Truck Transport Branch of the Ningbo Logistics Association, has been working tirelessly over the past two weeks. He told Daily Economic News that Ningbo's container trucking industry has fallen into comprehensive losses, with individual drivers losing money on every job. Liang is calling for an urgent increase in freight rates to accelerate loss reduction and maintain market stability.

At Xiamen's Haicang Port Area, Qu Kun (a pseudonym), a logistics operator handling European and American routes, manages a fleet of over a dozen trucks. "There's simply no business right now. Fuel prices are too high, there are no containers to move, and freight rates are being slashed," Qu said. Since last year, cargo volumes have dropped significantly. To maintain driver income, he has to operate at a loss.

Shanghai Waigaoqiao: Fewer Jobs, Lower Pay

At 11 a.m. on September 11, at Shanghai's Waigaoqiao Port Area, Pier 4 had yet to see its peak arrival period. Container truck drivers waiting in line to unload at the yard reported an oversupply of trucks and a shortage of cargo. "It takes two to three days to get one job," one driver said. Individual drivers with truck loans have no income if they can't find work, forcing them to accept low-paying jobs.

The contrast is stark: while ocean freight rates have soared and container bookings are difficult to secure—with comprehensive quotes often exceeding 10,000 yuan—port container truck operators face the grim reality that "not working means losses, but working also means losses."

Over several days, Daily Economic News reporters visited multiple port areas and found that the maritime supply chain is being torn apart by geopolitical storms. A group of workers—those with the least bargaining power—are the first to feel the chill of this transformation.

Individual Drivers Lose 200 Yuan Per Trip

At Shanghai's outer port, peak entry times for container trucks are 3 p.m. and 10 p.m. A veteran gatekeeper surnamed Zhang told reporters that road improvements are underway to ease long queues, with additional gates planned to reduce congestion.

"Usually, there's a small shipment surge the week before a holiday. Mid-September is relatively quiet. Traffic depends on the size of arriving vessels and the volume of container loading and unloading," Zhang said.

Driver Xiao Chen (a pseudonym), who handles LCL (less-than-container-load) cargo, quickly finished a boxed lunch by the roadside. "Business gets worse every year. We work more but earn less. Factories export with thin margins, and that trickles down—everyone in bulk and container transport is struggling."

For container truck drivers, eating at mobile food stalls and visiting fixed repair points are routine expenses. But now, these small costs can wipe out an entire day's profit.

"When times were good, driving for a fleet could earn me over 10,000 yuan a month. Now, with my own truck loan, my gross income is only about 20,000 yuan," said Driver Wu, an independent operator who was getting a tire repaired. His wife and children live in Shandong, and he works far from home year-round. After accounting for all costs, he nets only 50,000–60,000 yuan annually.

A tire repair costs 50 yuan, oil changes every three months, annual insurance premiums are high, and diesel prices keep rising. Wu's truck handles short-haul runs from yards to the port, with relatively fixed freight rates. Even running two or three trips a day, the high-intensity work does not yield high returns—and payment delays add to the frustration.

The Math of Losses

Liang Sanbo provided a detailed breakdown. In Ningbo, about 80% of container trucks are affiliated with fleets but owned by individual drivers. Their income consists of driving wages and property income. However, the affiliation system creates an illusion that drivers can still break even. Rising fuel costs have further squeezed per-trip profit margins. After accounting for insurance, depreciation, maintenance, and residual value amortization, each trip actually results in a loss of about 200 yuan.

"Why would the industry still compete on price and take orders if every job means a loss?" a reporter asked.

"Because individual drivers still have loan payments to make. They'd rather operate at a loss than stop," Liang replied helplessly. "Everyone is just enduring, hoping fuel prices will come down."

Causes: Rising Fuel, Falling Freight, Shrinking Volumes

On September 16, at Xiamen's Haicang Port Area, fleet owners were calculating the same equation.

"Fuel prices have risen from just over 5 yuan per liter in June to over 7 yuan now," said Boss Su, who runs a small fleet of seven or eight trucks. "What does a 2-yuan increase per liter mean? It adds 100 to 200 yuan in fuel costs per trip."

Su lamented the intense competition: freight rates keep falling while fuel costs keep rising. "Before, a single trip could yield 500–600 yuan in gross profit. Now it's only about 100 yuan."

Su's logistics company is a family business, representing nearly the entire household income. "We can only hold onto existing clients. We don't dare take new orders—they'd mean losses. Everyone is just hanging on. Those who can't will be washed out."

"If falling freight rates are due to insufficient cargo, why are trucks still lining up at the port?" a reporter asked.

Su explained that yard congestion is not due to high cargo volumes, but because similar containers are concentrated at one location for dispatch, and port opening times are synchronized. All trucks head to the same place at the same time, creating long queues.

Multiple industry insiders told reporters that business volumes have declined significantly.

Industry analyst Gao Qiang noted that the fundamental issue is oversupply of container truck capacity. The products currently driving export value—the "new three" (electric vehicles, lithium batteries, solar products)—do not require container trucks. Meanwhile, light industrial products that do need container truck transport are shrinking year by year. Additionally, barge and rail-sea intermodal transport have diverted some of the trucking market.

If zero-kilometer rail-sea transport is achieved, each container could save at least 200 yuan in short-haul costs.

Another factor is price-cutting competition among fleets for orders.

"Freight rates can always go lower. If diesel trucks won't take a job, electric trucks will. And the proliferation of private vans has spoiled freight forwarders," one driver said. "It's individual drivers who are losing money. Affiliated fleets still take their cut, so why would they proactively ask forwarders for higher rates?"

Power Imbalance in Freight Negotiations

Unlike self-owned fleets, affiliated fleets earn income by providing cargo sources and taking a cut of individual drivers' freight fees.

Liang Sanbo explained that adjusting freight rates in Ningbo's container trucking industry is difficult because affiliated fleets' profits are not significantly affected by fuel price fluctuations.

On one day, Liang visited four Ningbo fleets. At one, three affiliated trucks had drivers who chose to take leave and go home.

One individual driver, after five days without a job, decided to return to his hometown. "I asked the fleet to negotiate higher rates with the forwarder. They said the forwarder wouldn't agree—there are plenty of others willing to take the job. But with fuel prices this high, I can't afford to lose 200 yuan a day running the truck."

On September 14, the Shenzhen Container Transport Association issued a notice on reasonable collection of fuel surcharges.

The notice stated that the ongoing escalation of the US-Iran conflict has driven international crude oil prices sharply higher, causing severe losses on some routes. If the Middle East conflict continues, further fuel price increases are possible. The association recommended temporarily charging a fuel surcharge of 80–100 yuan per 100 kilometers on unfinished and new orders. If the listed price of No. 0 diesel falls below 7.0 yuan per liter and remains there for 15 consecutive days, companies may cancel the surcharge as appropriate.

Liang Sanbo noted that according to industry association pricing guidelines, publishing benchmark prices or recommended guidance prices is explicitly prohibited. However, given the severe cost inversion situation in various regions, some associations have taken the risk to protect industry income.

On September 19, the Ningbo Transportation Association and Ningbo Logistics Association jointly issued a statement opposing vicious low-price competition and disorderly internal competition. They advised companies to communicate and negotiate with clients based on fuel price fluctuations and their own operating conditions to reasonably pass on costs.

Reporters learned that when fleets apply for rate adjustments, they are often rejected. Freight forwarders and cargo owners demand justification and documentation. In some regions, the effect of official statements on price increases has been minimal, though Ningbo has shown the strongest progress.

Diesel Prices Hit New Highs

According to CCTV on September 21, US diesel prices have exceeded $6.5 per gallon, setting a new record. The Zhejiang Provincial Development and Reform Commission announced that on September 11, the maximum retail price for No. 0 diesel in the province was raised to 7.95 yuan per liter, a 25.79% increase since the beginning of the year.

Some freight forwarders questioned how prices could be considered "rising" when the average price of No. 0 diesel in 2024 has been around 7.7 yuan per liter.

Liang Sanbo explained that Ningbo container truck operators typically use skid-mounted fuel tanks to reduce costs. Skid-mounted fuel has lower density and is cheaper. Previously, the price difference between skid-mounted fuel wholesale prices and gas station listed prices was about 1 yuan per liter. However, since February, skid-mounted fuel prices have surged by 55%, nearly matching retail prices.

What Lies Ahead?

In the comment section of Liang Sanbo's public account, discussions about electric container trucks are as heated as those about rising fuel prices.

"Don't underestimate the impact of electric trucks on diesel trucks," said fleet owner Qu Kun. "With increased local subsidies, electric trucks are flooding into Xiamen Port, using cost advantages to drive down freight rates. The survival space for diesel trucks is shrinking."

To cope with rising fuel costs, a supply chain company executive told Daily Economic News that Xiamen Port is primarily increasing the use of lithium-battery new energy transport vehicles and using intelligent dispatch systems to reduce empty mileage. Excluding maintenance and insurance costs, electric container trucks have a comprehensive cost of about 1.5 yuan per kilometer, with overall per-trip operating costs 70% lower than diesel trucks.

Times are changing. Cost reduction and efficiency improvement have become the main themes of port development. Domestic port collection and distribution systems are shifting from single-mode transport to multimodal transport. Container truck drivers have almost no bargaining power in this transition.

Their only choice is whether to switch to electric trucks.

However, "unclear subsidies, range anxiety, inefficient charging, and high purchase costs" still deter many individual drivers from actively seeking change.

Qu Kun said he needs to earn some money first before considering replacing his trucks. The industry's immediate priority is to change its current state of internal competition.

Progress in Ningbo

On September 23, Liang Sanbo provided an update: 80%–90% of Ningbo container truck fleets have now achieved freight rate adjustments, with price increases of approximately 10%.

He said that Ningbo freight forwarders have received an industry "ultimatum" to complete rate adjustments by October 1. For major forwarders that have not yet accepted the adjustment plan, industry associations will intervene to mediate. If negotiations fail, the matter may be escalated to relevant authorities for discussion.

"Currently, self-owned fleets facing loss-making orders can only suspend operations. Some large Ningbo forwarders have recognized the need for rate adjustments, but progress is slow," Liang said. "The goal is simply to break even and ensure supply chain stability."

On the evening of September 24, a Daily Economic News reporter, without identifying themselves, called the Ningbo Transportation Bureau to inquire about the reported freight rate adjustments. A staff member said they would look into the matter and might provide an update after the holiday.