Industry Challenges Trigger An Increase in Shipping Prices
Ever since COVID-19 started to impact global trading patterns in the first quarter of 2020, shipping companies have been taking immediate actions to ensure trade routes are not disrupted.
With having to manage port congestion, increased freight rates and ship delays amongst several challenges, the Asia Pacific route is not spared from the high costs of chartering ships.
Chartering ships
Swire Shipping which has been operating in the Pacific region for close to 150 years has also adapted its business to ensure its service within the Asia Pacific route is less disrupted.
Over the last 12 months, the largest costs for shipping companies were the cost of chartering/leasing the ships themselves. This included fuel costs and container costs which have significantly over the last 12 months.
Costs increase
General Manager Jeremy Sutton said in some cases, the cost to charter a ship has increased 300-400 per cent while the minimum period of that charter was often
“As such Swire Shipping has increased its shipping prices and will continue to discuss this with customers.”
over two years.
“As such Swire Shipping has increased its shipping prices and will continue to discuss this with customers.
“Swire Shipping has been operating in the Pacific region for close to 150 years and our purpose is to enrich lives by connecting customers and communities in the Pacific. We are absolutely committed to doing so for the next 150 years and beyond.
“Aside from the costs above, one of the other costs which Swire Shipping needs to pay on behalf of its customers is the cost of buying space from other service providers if Swire Shipping’s network does not call directly.
“For instance, in Europe, the cost to ship a container from Europe to Asia has increased from around $1,500 to well over $10, 000,” said Mr Sutton.
Berthing
Mr Sutton adds that in some cases, around the world, ships are waiting to berth for over 10 days which is over the usual waiting time of less than 12 hours.
He said this meant that goods were being delayed and ships were also delayed for their next voyage.
“This compounding effect means that shipping companies are required to use more and more ships to try and maintain the same service levels.
“This is incredibly expensive. Much of the global demand is being driven from North America where the level of discretion spending has increased significantly. People are spending more on goods and less on services,” said Mr Sutton.
Fiji
However, Swire Shipping’s services are designed to call into Fiji directly as opposed to transhipping via other regional ports.
Mr Sutton said this has helped reduce the risk of delays at time like this.
He said Swire Shipping has been working tirelessly to also ensure that service levels and capacity to or from Fiji remain of a high standard.