From the end of 2020,the sea freight increased a lot till now,no matter for importers abroad or exporters in China,they all face a lot of pressure.Let’s analyze the reasons which cause this phenomenon.
- The COVID-19 pandemic
- Fewer sailings & container shortage
- Lockdown restrictions slowing down global trade
- The trade imbalance between China and the West (trade tensions between China and the US)
- Lack of manpower due to the pandemic
- Big shipping firms taking advantage (lines add surcharges to ocean freight rates)
Apart from the above reasons, another major reason behind these surged prices is the tremendous demand for containers in China. China being the largest manufacturer in the world there is a huge dependence of western countries such as the US and Europe on China for various goods. Therefore countries are willing to shed double or triple the price to procure goods from China. So while container availability has anyway shrunk drastically through the pandemic there is a huge demand for containers in China and the freight rates too are substantially high there. This has also contributed significantly to the price hike.
So when will the situation change into normal level?
From our point,it can’t recover in short time till mid of 2022.Unless the global pandemic cases lower,other manufacturing countries and areas recover from pandemic.
If you are in the supply chain,what we should do now is making purchasing plan in advance,to avoid the increasing cost and unforeseen risks.
