Container rates are continuing to reach new heights, as the shipping industry is getting back on track, in the post-pandemic world.
The rise in container rates are making shippers struggle, due to the massive increase in costs. While this comes as a blessing to the carriers, as the rise in container costs are making them good profits.
Xeneta, a market intelligence firm, reports that the historically high long-term contracted container rates are being raised to new heights. The first few months of the year 2021 has seen a commendable growth in all major trade corridors. In May alone, there has been a rise of 9% in the container rates.
According to Drewry Shipping Consultant’s data, during 2016-2020, container rates, even during fluctuations, never exceeded the $3,000 mark. However, ever since the world began to rise from the lows of the COVID-19 pandemic, from the last summer, there have been a steady increase in the container prices. Drewry’s composite, for the first time, exceeded $5,000 in 2021 and in the China to Rotterdam route, the rate has exceeded $10,000 for the first time!
According to a data released on 27th May by Drewry’s World Container Index , the rate for a standard 40ft container shipped from Shanghai to Rotterdam is drastically up by over 485% year-over-year, and a further 3% in the last week. Making the price reach an unbelievable amount of $10,174. The composite which looks at eight of the world’s primary shipping rates is up by 293% year-over-year and a further 2% last week to $6,257.
Experts believe, that the sudden rise in exports, the Suez Canal blockage, the COVID-19 Pandemic are some of the reasons behind such a huge increase in the container prices. In the short term, there is a negligible hope of the rates being reduced. But the rates would surely be reduced in the coming future.