McKinsey’s Steve Saxon and Jaana Remes discuss why container shipping costs are surging and give their take on what lies ahead for the industry, says an article published on their website.
It now costs up to six times more to ship a container from China to Europe than it did at the start of 2019. Yet global demand for shipping has increased only by around 5 percent during the COVID-19 pandemic. So what’s causing the spike?
In this video conversation, Steve Saxon, McKinsey’s Shenzhen-based partner leading the Travel, Logistics & Infrastructure Practice in China, and Jaana Remes, a partner with the McKinsey Global Institute, discuss this puzzling phenomenon.
Watch the video to learn about
- how changing consumption patterns in the United States are driving up demand for shipping and causing congestion in ports and the surrounding hinterland infrastructure
- how the COVID-19 pandemic has led to port lockdowns and container ships being taken out of service, resulting in an overall reduction in shipping capacity
- why the industry’s response of aggressively adding supply may not be the wisest move the longer-term implications of the boom-and-bust cycle of shipping rates and when rates could be expected to normalize
In addition, to learn more about the lasting effects of the COVID-19 pandemic on consumer spending, download our report The consumer demand recovery and lasting effects of COVID-19.
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