The increase in prices for moving containers puts world trade to the test, specifically raw materials. In February of this year, the average freight rate for a container tripled.
Why? According to Charles Hess, CEO of the consulting firm CABI Data Analytics, the coronavirus continues to cause problems in the global shipping and air freight industry. And one of them is the constant increase in the costs of container shipments around the world.
He explains that the regular price of the wagons prior to the pandemic was between US$1,500 and US$1,700. But that in May they began to rise, until reaching US$2,200 in October 2020.
But in December the average value of carrying a wagon began to increase until in February 2021 it stood at US$4,300, the highest that has been recorded in a year.” From April 2019 to May 2020, the price did not exceed US$1,600″, says Hess.
Who does this increase affect?
This rate hike directly affects raw materials worldwide. "We see high increases in plastic, steel, wood, melamine, textiles and clothing, especially those that come from China," says the CABI Data Analytics analyst.
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Why is there a rise in container prices?
What happens is that there are no shipments in China. Why did this happen? When the pandemic began, many sectors stopped producing and others reduced production. But one of the few countries that didn't was China. So when it continues to produce, it also sends shipments, explains the analyst.
He adds that the problem was that none of those shipments, which were in other countries around the world, returned to China. “What is happening is that in that Asian country there are no contenders or there are very few. So there is a supply and demand fight.”
Which coincides with what panelists explained in the webinar promoted by Europartners Group “what happened in 2020 was an explosion in demand. Consumers and companies required transportation, but, when there was also a phenomenon of reduction in shipping capacity (lack of spaces), the rates of those that were available went through the roof”.
For example, shipping from China to Europe costs almost US$8,000. And towards the west of the United States, California, it is around US$4 thousand. And to the east, New York, $6,000. "But from the US to China we're talking about $600 or $800," Hess says.
Will these costs continue?
The analyst of the firm dedicated to the development of intelligence, explains that the prices observed so far could be the highest, and there are possibilities that in the short-medium term they will be between US$4,000 and US$4,500, up to reach about $2,000 or $2,200. As long as the lockdown restrictions don't continue.
Global challenge
Michele Lira, representative of Europartners Group, says that transport agents should focus on the adaptability potential of importers, which is directly related to the characteristics of their products.
"Getting to book a little more in advance is essential to get equipment, spaces and outings," she guides.
She also predicts that basic necessities, electronics and medical items will not stop being a trend; luxury items will be impacted by rising unemployment levels.
