- Container shipping rates from China to the United States have scaled fresh highs above $20,000 per 40-foot box.
- As rising retailer orders ahead of the peak U.S. shopping season add strain to global supply chains.
- The acceleration in Delta-variant COVID-19 outbreaks in several counties has slowed global container turnaround rates.
A recent news article published in the Reuters by Roslan Khasawneh and Muyu Xu states that China-U.S. container shipping rates sail past $20,000 to record.
China’s busy southern coast
Typhoons off China’s busy southern coast in late July and this week have also contributed to the crisis gripping the world’s most important method for moving everything from gym equipment and furniture to car parts and electronics.
“These factors have turned global container shipping into a highly disrupted, under-supplied seller’s market, in which shipping companies can charge four to ten times the normal price to move cargoes,” Philip Damas, Managing Director at maritime consultancy firm Drewry, said.
Rate hikes
The spot price per container on the China-U.S. East coast route – one of the world’s busiest container lanes – has climbed over 500% from a year ago to $20,804 this week, freight-tracking firm Freightos said. That compares to just under $11,000 on July 27.
The cost from China to the U.S. west coast is a little below $20,000, while the latest China-Europe rate is nearly $14,000, Freightos’ data shows.
Ding Li, president of China’s port association, told Reuters the spike followed a rebound in COVID-19 cases in other countries, which has slowed turnover at some major foreign ports to around 7-8 days.
The surging container rates have fed through to higher charter rates for container vessels, which has forced shipping firms to prioritise service on the most lucrative routes.
“Ships can only be profitably operated in the trades where freight rates are higher, and that is why capacity is shifting mostly to the U.S.,” said Tan Hua Joo, executive consultant at research consultancy Linerlytica.
Some shippers have reduced volumes in less profitable routes, such as the transatlantic and intra-Asia, said Damas.
This means that rates on the latter are now increasing fast.
No Respite
The rate surge is the latest reflection of disruptions since COVID-19 slammed the brakes on the global economy in early 2020 and triggered huge changes to the flows of goods and healthcare equipment around the world.
“Every time you think you’ve come to an equilibrium, something happens that allows shipping lines to increase the price,” said Jason Chiang, Director at Ocean Shipping Consultants, noting the Suez canal blockage in March had played a major role in allowing firms to hike rates.
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Source: Reuters
