With the peak of the U.S. shopping season’s coming, rising retail orders add strain to global supply chains. Container shipping rates from China to the East Coast of the U.S. have scaled new highs above $20,000 per 40-foot box.
The acceleration in Delta virus outbreaks in several countries has slowed global container turnaround rates and prompted several countries, mostly in Asia, to cut off the seafarers’ access to inland transportation. As a result, approximately 100 thousand sailors were trapped at the sea and the working hours of the crew exceeded the peak during the lockdown in 2020.
The flood in Germany and typhoons off China’s busy southern coast in late July also contributed to the crisis of the global shipping market.
“These factors have turned global container shipping into a highly disrupted, under-supplied seller’s market, in which shipping companies can charge four to ten times the normal price to move cargoes,” Philip Damas, Managing Director at maritime consultancy firm Drewry, said.
The surging container rates have resulted in higher charter rates for container vessels, which has forced the shipping companies to prioritize services on the most profitable routes.
It is estimated that the shipping price would slump this year. However, with the strong demand for main routes and transportation shortage resulting from port congestions, most of the analysts predict that the high level of the fee would not decrease until February 2023.