Ocean shipping costs rise to record levels

The industry is still reeling from the Suez Canal lockdown in March as it faced a terminal closure in CHINA due to the covid-19 outbreak. The price of sending a container to Europe amounted to $11,000 — 4.5 times more than in October

The cost of shipping cargo from Asia to Europe has increased several times compared to last year due to the pandemic, disruptions in Chinese ports and other factors. It is reported by the Financial Times.

The publication, citing Freightos online freight market data, writes that the cost of sending a standard 40-foot container from Asia to Northern Europe for the first time exceeded $11 thousand. For comparison, in mid-May the price was $8.5 thousand, and in October last year - $2 thousand

A record rise in shipping prices in recent weeks has contributed to the failure of the major southern China port of Yantian. At the end of May, the authorities closed the terminal for almost a week after the CORONAVIRUS was detected in several port workers. To date, the terminal's performance has only recovered by 70%. The port closure has caused congestion in nearby terminals in China.

BLOOMBERG estimated the impact of the blocking of the Suez Canal on transportation prices Business

The outage has put additional strain on an already struggling shipping industry and increased delays in supply chains around the world. The FT predicts it will take six to nine months to restore maritime logistics.

According to Lars Jensen, executive DIRECTOR of consulting company Vespucci Maritime, Yantian's disruption could have been much worse. “The Chinese authorities are trying hard to suppress the slightest outbreaks of COVID-19. Just a few cases of infection are enough to close entire areas,” he explained. According to the expert, if the coronavirus is detected in other major ports of China, for example, in Shanghai, then the consequences for global cargo transportation could be even more catastrophic.

According to the FT, instability in the shipping market has been observed since the end of last year: due to pandemic restrictions, there was a shortage of empty containers. The closure of the Suez Canal for almost a week at the end of March only exacerbated the situation. The increased demand for containers was also affected by the boom in online shopping against the backdrop of countries recovering from the corona crisis.

According to the largest container carrier Maersk, the average waiting time for ships in the terminal is now 16 days. In an attempt to avoid problems, many shipping companies divert their ships to other ports; some, in order to reduce delays, do not call at the southern Chinese ports at all.

Sea shipping between the US and China caused a rise in prices for goods in RUSSIA Business

Some companies were looking for an alternative to sea transportation in the form of air or rail shipments. According to Claus Gab, Vice President for Supply of the European electrical manufacturer Eaton, Klaus Gab, alternative transportation has also risen in price and become difficult to sell - the price of transporting goods throughout Eurasia has doubled since the beginning of the pandemic and now stands at $36,000 per truck.

At the end of March, because of the Ever Given container ship that ran aground in the Suez Canal and blocked navigation, many companies sent their ships around the African continent. Bloomberg reported that the prices for sea freight from China to Europe increased several times in connection with the incident. Compared to pre-pandemic levels, freight costs have quadrupled.