Global Container Shipping Rates Soar In Wake of the Pandemic and International Trade Volatility
Global container shipping rates are at record highs, with the coronavirus pandemic causing major disruptions to the flow of international freight and supply chains around the world.
The Harpex Shipping Index has more than doubled since July 2020 (to the highest level recorded since 2008), while the Freightos Baltic Global Container Index (FBX), a weighted average of 12 major global container routes, has risen by 30 per cent since 1 July 2020 to sit at US$2,359 per forty-foot equivalent – another record high.
For reference, the cost to ship a container from China to the U.S. East Coast, one of the world’s most significant trade routes, has risen by 42 per cent since July 2020, while rates from China to the U.S. West Coast are up nearly 50 per cent over the same period. Similar trends have been observed in exports from the USA to rest of the world, and imports into the Australian market.
Price hikes can be attributed to a combination of growing restocking demand across the United States and Europe, and the increasing scarcity of available containers at export hubs. One of the major factors behind these trends is the indefinite grounding of much of the world’s air fleet, with companies that rely on transporting goods by airfreight in the cargo storage areas of commercial passenger jets forced to resort to sea cargo. Additionally, shipping lines looking to recoup some of their lost revenue over the past nine months are charging exorbitant prices to capitalise on the upward trend in freight demand.
Extensive global lockdowns are expected to lead to persisting high prices and unpredictable price fluctuations through to the end of 2020 and well into 2021. Given the volatile and uncertain nature of this pandemic, and the rapidly evolving situations in major economies across the world, there is still the potential for abrupt changes to the trajectory of shipping rates next year.
Pure Dairy will continue to monitor these trends and is working hard with our suppliers to ensure we are still delivering the best possible outcomes for our customers. While the challenges of this extremely difficult freight situation have been significant, and in many respects unprecedented, our global network of dairy trade experts remain committed to providing the tailored support and alternative solutions that our customers need to overcome them.
If you have any further questions about the above and how it may affect your business, please contact your local Pure Dairy representative.
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