The cost of shipping goods between China and Europe has soared with pandemic lockdowns fueling an online shopping boom, and a shortage of empty transportation containers and port staff available is disrupting global trade.
Shipping container prices have hit record highs in the past eight weeks, the Financial Times reported, with costs from China to Europe having "more than quadrupled".
According to importers quoted in the paper, the cost of shipping a 40-foot (12-meter) container from Asia to northern Europe has increased "from about $2,000 in November to more than $9,000".
It quoted one freight forwarder as saying some businesses were now being charged as much as $12,000 per container.
Shippers told The Daily Telegraph that prices for a standard 20-foot container shipped from China to Europe have rocketed six-fold from $730 in May, "when the virus caused international trade to collapse", to $4,400.
When shipping companies canceled sailings in the summer due to the pandemic, "empty containers that would normally be returned to Asia began building up in different locations", the Telegraph noted.
John Butler, president of the World Shipping Council, told the Financial Times that congestion at ports is pushing up costs, with shipping lines charging extra "to compensate for longer waiting times".
Jonathan Roach, container market analyst at ship broker Braemar, told the Telegraph that there was huge demand from the West for deliveries from Asia.
"COVID restrictions with less people in ports mean that it's taking 20 percent longer to turn around ships at ports. There are bottlenecks with supply of containers as they haven't been returning to Asia," he said.
Lars Jensen, from consultancy Sea-Intelligence, told the Financial Times that the rates are being stoked by "customers fighting over a limited resource－containers".
China's economic recovery is also driving up prices for ships "carrying materials to feed the country's factories", the Telegraph noted, with deliveries of iron ore from Australia and South America being chartered "at rates of $20,000 per day, almost double the level of six months ago", according to Braemer's data.
Producers in Europe will not be able to absorb the increases in freight costs, according to the United Kingdom's Association of Manufacturers of Domestic Appliances.
It said in a statement that in "cases where the increase in cost of shipping is greater than the retained profit from the goods, ... these costs will have to be passed on to end users".
Companies in the UK are also coping with disruption caused by the end of the Brexit transition period on Jan 1, when the nation separated from the European Union's single market and customs union.
Dean Reynolds, the commercial director for Globelink Fallow, a British shipping services company, told The Guardian he had "never seen such expensive shipping rates", adding that prices would likely be passed on to UK consumers.
Roach said he expects container rates to normalize later in the year after COVID-19 vaccines have been rolled out globally.
Source:Chinadaily
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