Shipping container rates have spiked by as much as three or four times since the onset of the pandemic. According to industry experts, as the global demand for goods continues to outpace available capacity, they are likely to remain elevated beyond the Lunar New Year in 2022.
Even when the demand starts to ease, participants on a webinar hosted by online freight shipping marketplace and platform provider Freightos said that container rates are unlikely to return to their previous levels. Panellist Robert Khachatryan, founder and COO of shipping forwarder Freight Right Global Logistics: “I have been in this business for 20 years, and $4,500 was the previous high I had seen for a container from Asia to the US West Coast before the pandemic. I think that will be the new floor. Maybe even above $5,000. I think that could become the new market rate.”
Container ships now carry a wider scope of cargoes, including consumer products like electrical appliances and automobiles, so demand for that space has risen as economies reopened after lockdown measures because of the pandemic. Container shipping has a peak season for goods from Asia to the US – from about July to October – but the added demand kept volumes above typical peak season levels.
Image: Freightos – fbx.freightos.com
Rates began to spike in Q4 2020, driven by the shortage of containers, and after some easing, shot up again when the Ever Given became lodged in the Suez Canal. Rates continued rising recently when an outbreak of COVID-19 infections at the port of Yantian, one of China’s busiest container ports, led to lengthy delays at the port and added additional strain to the network.