Ongoing Global Logistics Crisis... Container Freight Rates Quadruple in One Year

Manufacturers Expand Production, Ports Unable to Handle Capacity... High Surge Expected to Continue Until Year-End

[Asia Economy Reporter Byunghee Park] As the logistics crisis caused by supply chain disruptions continues, container shipping rates have been confirmed to have increased more than fourfold over the past year.

The global average rate for a 40-foot container, announced by the UK shipping consultancy Drewry, was recorded at $8,399 (approximately 9.51 million KRW) as of the 1st of this month. Compared to early July last year when it was just in the low $2,000 range, it has risen more than four times. Container rates have also increased by 53.5% over the past two months compared to the first week of May. Container shipping rates from China to Europe or the U.S. West Coast have surged up to $12,000. Rates for containers with imminent shipping deadlines have reached as high as $20,000.

Container shipping rates began to soar around last summer and skyrocketed in early March this year due to the grounding of the large container ship Ever Given in the Suez Canal. The aftermath of that incident has continued to push container rates upward.

Brian Burke, director at Seco Logistics in Itasca, Illinois, USA, said that reservations for containers now have to be made two months in advance.

Experts expect the high container shipping rates to continue until the end of this year as supply chain disruptions persist. With global economic recovery expectations, manufacturers are expanding production and increasing inventories again. However, the surge in containers is causing unloading operations at ports to be inefficient. The port capacity is unable to handle the overwhelming number of containers.

Last month, the situation worsened as Yantian International Container Terminal in Shenzhen, China?one of the world's largest logistics ports?implemented entry restrictions to prevent the spread of COVID-19.

Danish shipping market research firm Sea-Intelligence reported that from January to May this year, 695 vessels arrived at the U.S. West Coast with delays of over one week. From 2012 to 2020, the average annual number of delayed vessels was only about 170.

Philip Damas, director at Drewry, said, "Everything in container shipping is delayed," adding, "Containers are spending more time at sea and it takes much longer to dock." Damas predicted that there are no signs of the supply chain disruptions ending and that the severe situation will continue until the Chinese Lunar New Year next year.

This content was produced with the assistance of AI translation services.