The cost of shipping containers from Asia has surged by nearly $10,000 for urgent shipments, and retailers are now placing orders for December ahead of the peak times. The costs are preliminary due to the rising demand and ongoing Red Sea attacks, says US logistics firm, The Logistix Company.
Buyers are stocking up and placing orders for the Christmas shopping season to avoid delays and further increases, as seen last year.
Last year, retailers risked not having enough stock on the shelves when the world’s largest shipping company, Maersk, halted all transits through the Red Sea.
The BBC reports that for the last few months, vessels belonging to Western firms have been attacked in the Red Sea by Houthi rebels backing Hamas in its war with Israel, driving shipping prices up.
Rates affected by Red Sea
The Logistix Company is painting a bleak picture of future shipping prices. It states that French carrier CMA CGM SA, the world’s third-largest, has announced rates of up to $7,000 for a 40-foot container to northern Europe.
Its premium services now range between $7,500 and $10,000.
“This surge in costs comes as the container shipping industry faces stretched capacity due to more than five months of attacks in the Red Sea. Importers are increasing orders in response to concerns about port congestion, labor strikes, and potential higher tariffs on Chinese-made goods,” says Logistix.
Industry spikes compared to pandemic times
Although not customary, these spikes surfaced in September 2021 during the COVID-19 pandemic. “Spot rates for 40-foot containers to the West Coast from China soared to over $20,000 amid a pandemic-driven surge in demand,” remembers Logistix.
The rates for China-to-Europe shipments peaked at $15,000 at the beginning of 2022. There is an ongoing struggle to balance demand and capacity.
This week, one of the world’s biggest shipping companies, Maersk, raised concerns about further port congestion caused by the Red Sea crisis. It’s already warning of a ripple effect on container freight rates and delays.
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Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
