- China-US shipping rates begin to cool as power crisis forces production cuts, but freight costs are still elevated
- the spot rate for shipping a 40-foot container from China to Los Angeles has dropped about 51 percent from US$17,500 last month to US$8,500
- shipping costs between Asia and the US also dropped 16 percent last week, marking the first significant dip since August, according to Freightos
- despite falling shipping rates, transpacific freight costs are still about four times higher than in the same period last year
The cost of shipping between China and the United States has fallen after months of steep increases, as orders for year-end holidays slow and a power crunch in the world’s second-biggest economy disrupts the production of goods says an article on SCMP.
Costs for containers have fallen
Though prices are still far higher than this time last year, costs for shipping containers have fallen by more than 51 percent on some routes between September and October, according to freight forwarding platform Shifl.
The spot rate for shipping a 40-foot container from China to Los Angeles has dropped from a high of US$17,500 last month to US$8,500, while rates to the east coast of the US have tumbled 28.2 percent over the past month to US$14,000 per container.
The Freightos Baltic Index also showed shipping costs between Asia and both coasts of the US dropped 16 percent last week, marking the first significant dip since August, though this week transpacific ocean rates remained largely unchanged.
Shipping rates sky-high
Surging prices for containers and congestion at ports around the world have driven shipping rates sky-high over the past year, causing major headaches for Chinese exporters, who are also struggling with high raw material prices. Many smaller producers of low-value goods have started cutting back on production and turning away orders to preserve their margins.
Despite falling shipping rates, transpacific freight costs are still about four times higher than the same period last year, and more than 10 times higher than pre-pandemic levels, said Judah Levine, head of research at Freightos.
Uneven distribution of containers at major ports around the world due to pandemic-related lockdowns and port suspensions are behind the elevated costs. Since the middle of last year, most shipping containers sent from Asia to North America and Europe have not been returned because of logistics disruptions and a lack of goods to stock them.
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Source: SCMP
