Surge in container rates set to continue as shipping crunch tightens
NEW YORK: Container shipping rates from Asia to the United States and Europe increased to new record levels over the past week, ensuring transportation costs will stay elevated for companies heading into a peak season for rebuilding inventories.
The spot rate for a 40-foot container from Shanghai to Los Angeles increased to a record US$9,733, up one per cent from the previous week and 236 per cent higher than a year ago, according to the Drewry World Container Index published on Thursday.
The Shanghai-to-Rotterdam rate rose to US$12,954. The composite index, reflecting eight major trade routes, hit US$8,883, a 339 per cent surge from a year ago.
Among the reasons for the tight market: a persistent shortage of containers along the busy transpacific lane carrying American imports. Goods in containers are flooding into the biggest US gateway for seaborne trade at five times the volume of steel boxes full of exports.
“The backlog of getting containers, getting the product, getting it on the ships and just the delays in getting any of those products is significant today,” said Clarence Smith, chairman and chief executive officer of Atlanta-based Haverty Furniture Cos, during an investor conference this week.
Asked how long he expected the supply problems to last, Smith said: “I’m hearing it’s going to go into next year. I don’t see it really getting better this year, maybe a little bit better. We’re
having to pay premiums to get containers.”
The Port of Los Angeles on Wednesday said loaded container imports totalled 467,763 20foot equivalent units (TEUs) last month, while exports fell to 96,067 — the lowest level since 2005.
At Long Beach, import volume rose 18.8 per cent to 357,101 TEUs last month, with exports dipping 0.5 per cent to 116,947.
Combined, imports into both ports last month were up 13.3 per
cent from the same period in 2019.
Meanwhile, the number of anchored container ships waiting to discharge cargo at Los AngelesLong Beach stood at 18 as of late Wednesday, compared with 20 a week earlier, said officials who monitor harbour traffic.
That bottleneck has persisted since late last year, peaking at around 40 vessels in February.
Los Angeles Port executive director Gene Seroka said the demand for consumer goods looked
to stay solid for the rest of the year.
“Fall fashion, back-to-school items and Halloween goods are arriving on our docks, and some retailers are shipping year-end holiday products early,” he said. “All signs point to a robust second half of the year.”
Long Beach executive director Mario Cordero said while the port expected e-commerce to drive cargo movement through the rest of the year, volumes might be peaking.