THE CURRENT PROBLEM OF THE FREIGHT FORWARDING SECTOR

“The shipping containers prices have skyrocket”

I would like to share with you some actual information about the freight forwarding sector. Actually, I’m doing an internship in an international shipping company, and I found interesting to share with you some relevant information about the actual moment of the sector which is also related with this subject.

Regarding the Shanghai index, the container cost has been reached an average of 2.900$ for 20-foot containers. It is 3 times more expensive than January 2020.

Type of containerJanuary 2015January 2020February 2021
20 foot450$1.000$2.900$
40 foot 1.800$5.200$

From the financial crises of 2008, the shipping companies have maintained a very cheap price for the freight of containers, trying to fight against the economic recession. But after the coronavirus crisis this price has been multiplied, and many economists argue that the prices from before will never come back.

One of the reasons of this price increasement is because most of the containers are stocked in China. China receives more empty containers for their exportations than full containers for their importations. Therefore, there is a bottle neck that block a fluent motion of containers and cause an increasement of the prices. Furthermore, during the Chinese New Year holiday, the majority of the factories shut down for two weeks, so the movement of containers has been heavily affected. For this reason, many companies wait for weeks for containers and are paying premium rates to get them faster, causing shipping costs to skyrocket.

A part of that, it is also true that today there is a major demand than offer provoked by a high increasement of the e-commerce companies. Day to day, there are more and more companies that want to import and export goods, but there are not enough containers for all of them. Therefore, it is absolutely understandable the increment of prices due to the increment of the demand.

Many economists argue that the prices of shipping containers are starting to stabilize, but they also maintain that prices will never be as years before. Some experts say that the freight forwarding companies have an agreement for maintaining these high prices, so, perhaps the golden age of import and export of goods is over.

More information:

https://www.eleconomista.es/empresas-finanzas/noticias/11049734/02/21/El-precio-del-transporte-maritimo-se-triplica-y-no-volvera-al-nivel-preCovid.html

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