The cost to ship cargo between China and the United States is going down after months of steep increases as the Omicron COVID-19 variant has caused restrictions and closures in the industry.
On April 22, the Shanghai Containerized Freight Index (SCFI), a bellwether of the box spot markets, stood at 4,195 points, down 32.67 points from the previous week, its lowest level since July last year.
Jin Xiaomin, chairman of the Zhejiang Kingston Supply Chain Group Co., Ltd., a Yiwu, Zhejiang province-based goods exporter, says freight rates for most international routes have gone down substantially from their mid-January highs.
"For instance, the cost for a 40-foot container shipped from ports in China passing through the Red Sea to Saudi Arabia is now about 5,000 US dollars and was around 8,000 dollars last year. Plus, the shipping rate between China and the west coast of the United States has dropped from over 15,000 U.S. dollars in the second half of last year to its current 8,000 U.S. dollars," added Jin.
Meanwhile, China Containerized Freight Index, a type of economic transport shipping index, fell 0.6 percent to 3,109.78 points.
Industrial insiders say logistic bottlenecks, coupled with a lack of orders due to strict pandemic lockdowns, are amongst the reasons for the price slump.
According to Jin, the most important job right now for his staff is to find clients.
" So, we are looking for orders now. We plan to add about 20 people (to manage) the front office," said Jin.
Analysts expect prices to rise again during May, the peak shipping season, fueled by increasing shipping orders.
Several freight companies have also announced adjustments to the General Rate Increase (GRI) for routes from Asia to the United States starting in May. The shipping costs are expected to rise by 1,000 to 2,000 U.S. dollars per FEU.
Source: CCTV
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