- The cost of shipping goods from China to Europe increases by up to 600 percent in recent weeks.
- The rise in cost of shipping goods is attributed to pandemic that has disrupted the trade routes balance.
- It has resulted in a shortage of shipping containers.
A recent news article published in the CGTN written by Jemima Walker, reveals that the soaring shipping costs from China to Europe takes place amid container shortage.
Shipping cost of a container
At the beginning of 2020, it cost around $2,000 to ship a container from China to Europe. Now, some companies are being quoted up to $14,000.
What is the main reason for increase in prices?
The issue is caused by a shortage of shipping containers in China and other parts of Asia because they are stuck in the wrong places.
“I’ve been trying to look through 30 years of data and we have never seen freight rates skyrocket to this point that we have seen now,” said Lars Jensen, CEO of shipping consultancy SeaIntelligence Consulting.
Brexit pressure
“If Brexit works out fine and there are no major congestions in the ports, everything will work as normal,” Jensen of Seaintelligence Consulting.
“If Brexit turns into causing more congestion at major ports in the UK, as a major container line, the back-up plan would be we’ll just skip the UK port and discharge the cargo over in the continent.”
This could potentially cause serious issues for UK companies trying to import goods.
It is hoped the Chinese New Year holiday in February – when there is a lull in factory production – will bring down shipping costs.
However, it is likely the problem will continue in some form for months, as people turn to online shopping because of lockdowns, which increases demand for Chinese goods.
Increasing shipping costs – a short bio
Shipping lines canceled due to pandemic in the first half of 2020.
Asian economies restart, demand for China-made goods on a rise in western countries.
But congestion in Europe means containers can not be returned to Asia quickly.
Therefore prices increase as companies fight for the few containers in circulation.
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Source: CGTN
