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The rate of inflation is easing in the developed world except for one area where prices are soaring: the cost of shipping goods on the high seas.
The most recent data shows that spot rates for full-size containers heading to the U.S.A. and Europe from Asia have risen again. Three key routes now all exceed $6,000 per 40-foot equivalent container, according to Drewry World Container Index released on June 13th. All three have tripled in price since the end 2023. However, the rate of increase is slowing.
Nearly six months of regular attacks on vessels in Red Sea have stretched capacity in a sector responsible for about 80% of international goods trade. This has disrupted the normal flow of goods and led to bottlenecks at some of Asia’s largest ports.
Singapore’s maritime hub, one of the world’s major crossroads for seaborne cargo, has been experiencing a prolonged period of congestion. According to industry estimates the waiting time to get a berth in Singapore is now nearing five full days. In Chinese ports Ningbo Shanghai and Qingdao, it’s between one and four days.
Imports in the Port of Los Angeles – the busiest seaport of the US – remained above pre-pandemic levels in the first five month of 2024, despite a slight decline in May.
Drewry reports that the cost of a container 40 feet long to transport merchandise from Shanghai to Los Angeles last week increased by 0.8%, to $6,025. This was the sixth consecutive week of gains.
The charge from Shanghai to Rotterdam has increased by 2.4%, to $6,177. This is the highest level since September 20,22.
Drewry reports that the rate from Shanghai to Genoa in Italy, on the Mediterranean Sea, has risen by 3%, to $6,862. This is one of the routes most affected by the shipping industry’s decision to avoid the Red Sea. This was the highest rate since September 2022.
Drewry said that it “expects freight rates from China to continue to rise next Monday due to congestion problems at Asian ports.”