Thursday, October 21, 2021

US freight costs from China increased tenfold due to container shortage

Since August, the price of container freight from China to the United States has increased tenfold, a record high. Due to the CCP (Communist Party of China) virus epidemic, containers shipped from China cannot be returned immediately after unloading at their destination, leading to overcrowding due to empty cargo rotation and limited shipping capacity.

Global shipping prices continue to rise as containers become more difficult to find. The cost of container shipping has increased four-fold since January. As of 17 September, the China Containerized Freight Index (CCFI) has increased by 90.34 percent since the beginning of 2021.

According to statistics from previous years, shipping a 40-foot container from China to the United States costs about $1,000 to $2,000. Since August 2021, the container freight rate from China to the United States has exceeded $20,000 per 40-foot container, a tenfold increase and a historic high.

Wang Qian, an employee of China Yuexin Logistics, told Beijing news magazine Caijing that in 2019, the freight cost for a 40-foot container from Tianjin, China to Los Angeles, was $1,600 to $1,700. And now it costs $15,000.

Qian suggested that longer docking times for cargo at foreign terminals result in higher costs. To save costs, many shipping companies collect empty containers before they are returned, resulting in fewer and fewer containers in China. Empty containers are usually taken out completely early in the morning. Many people queue to repair broken containers, and they are snatched away immediately after repair. Some shipping companies have opened online reservations for freight at midnight.

Insider: The vicious cycle of freight delays due to pandemic

Mr. Li, a Chinese shipping agency insider, spoke to The Epoch Times about the situation. Containers from China cannot be unloaded immediately upon arrival at their destination. While cargo is piled up at destination ports, empty containers cannot be put back on ships for return. This vicious cycle has skyrocketed container freight.

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According to Li, during the outbreak of the CCP virus, many countries (including China) temporarily closed their ports, causing delays because container ships could not unload for two or three weeks upon arrival.

“The delay caused a backlog of products waiting to be shipped. When ships return, there are not enough containers for the products. So the shipping capacity goes down, and the cycle lengthens,” Lee said.

“The pandemic has affected the entire consignment industry. For example, workers at dock terminals are also facing shortages. Products are not being delivered to the dock fast enough, increasing shipping costs,” Lee said.

Experts: Many factors lead to container stress

Mike Sun, a private investment advisor in North America, told The Epoch Times that an increase in export orders, insufficient supplies and a lack of empty cargo rotation have caused severe traffic congestion in logistics. And the situation has worsened since the beginning of the year.

Since April, the delta version of the CCP virus, commonly known as the novel coronavirus, has emerged in many parts of the world, experiencing severe outbreaks in countries in South and Southeast Asia, including India, Vietnam, Malaysia which led to some manufacturing and processing. order to return to china

“The situation is still not eased; The traffic jam continues. Orders are backed up and cannot be shipped. A large number of items are being prepared for Christmas, waiting to enter the US and European markets,” Sun said.

“China’s container companies have been expanding their production capacity, but not for two months or more, they still haven’t been able to quench their immediate thirst. [The containers] cannot be produced and put to immediate use; They should not expect any improvement in the short term,” Sun added.

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This News Originally From – The Epoch Times

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