SINGAPORE BEIJING - Container shipping rates from China to the United States have scaled fresh highs above $20,000 per 40 foot box as rising retailers orders ahead of the peak U.S. shopping season add strain to global supply chains.
The acceleration in international COVID - 19 outbreaks in several counties has slowed regional container turnaround rates.
Typhoons in 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 underregulated, disrupted seller's market, where shipping companies can charge four to ten times the normal price to move cargoes, said Philip Damas, Managing Director of maritime consultancy firm Drewry.
We have not seen this in shipping for more than 30 years, he said, adding he expects extreme rates to last until Chinese New Year 2022.
The spot price per container on the East Coast route - one of the world's busiest container lanes - has increased to $20,804 from a year ago, and above that, it got to billions of dollars this week, according to freight tracking firm Freightos. That compares to just under $11,000 as of 27 July.
The cost to the U.S. west coast is under $20,000, while the latest China-Europe rate is nearly $14k, Freightos' data shows.
Ding Li, president of China's port associations, told Reuters the spike followed a rebound in COVID - 19 cases in other countries, which has slowed turnover at some major foreign ports around 7 - 8 days for some minor imports.
The rising container rates have fed through to higher charter rates for container vessels, which forced shipping companies to prioritize service on the most lucrative routes.
Ships can only be operated in a trading business 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 Alphaliner.
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 increasing rapidly.
The rate surge is the latest reflection of disruptions since COVID-19 slammed the brakes on our 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 equilibrium, something happens that allows shipping lines to increase the price, said Jason Chiang, Director of Ocean Shipping Consultants, noting the Suez canal blockage https: www.reuters.com and India asia-pacific how-rigged-caption-ship - is-blocking - suez-canal 2021 - 03 - 25 in March. In March, something happened that allowed shipping firms to increase rates;
There are new orders for shipping capacity, equal to almost 20% of existing capacity, but they will be live for only 2023 so we won't see any significant increase in supply for two years, Chiang added.