The Strategist

FT: Maritime freight costs rise to record levels

06/24/2021 - 03:31

Cost of shipping has risen to a record this year, with the price per container shipped from Asia to Northern Europe exceeding $11,000 for the first time, up from $2,000 in October. This price increase is linked to the disruption to global supply chains, which has been exacerbated in recent weeks by an outbreak of coronavirus in the world's third-largest port.

Maritime freight prices have risen to record levels, the Financial Times reported. The newspaper attributed this to, among other things, major delays at the Chinese port of Shenzhen due to the coronavirus outbreak.

The cost of shipping a 40-foot container (approximately 12.2m long) by sea from Asia to Northern Europe has exceeded $11,000 for the first time ever, the FT cited data from Freightos, an international online marketplace. According to the service, back in October 2020 the price was $2,000 and in mid-May it was $8,500. The cost of shipping freight within Eurasia has more than doubled from pre-pandemic coronavirus levels to $36,000 per truck, Eaton's vice president of supply chain for Europe, Klaus Gaeb, told the newspaper.

Maritime freight carriers have been facing difficulties since late last year: pandemic-related controls and restrictions at borders have led to a shortage of containers, the FT wrote. Demand for container shipping operators has increased due to the growing popularity of online shopping and the recovery of developed economies from the crisis. The situation was exacerbated in March by the blockage of one of the world's most important freight arteries, the Suez Canal. In recent weeks, delays in the global supply chain have been further exacerbated by the outbreak of coronavirus at China's Yantian terminal near Shenzhen, according to the Financial Times.

Manufacturers and retailers will be facing delivery delays around the world for the rest of the year, the Financial Times' interlocutors in the shipping market said. Freight costs will not drop, they said, nor will shipping become more affordable. The average waiting time for ships to call at a port is now 16 days, the FT quoted Maersk, the world's largest container ship operator, as saying.