It’s been months since we first started hearing about the worldwide container shortage, so for all of those wondering what ocean freight marketplace conditions are looking like right now, the short answer is: not great for shippers. With container production playing catch up, elevating demand, and increasing supply chain logjams, there doesn’t seem to be any relief from the equipment scarcity issues on the immediate horizon. And after being swamped by an influx of imports coming from the Suez Canal blockage, European ports are particularly struggling to manage the box shortage in the midst of all the piled-on port congestion.
As ocean carriers prepare to roll out another new wave of GRIs on June 1, it appears that shippers are also stuck with extreme freight rates for a while too. So, what’s driving this surge in shipping costs? According to Hellenic Shipping News Worldwide, “the strong rise in demand for intermediate inputs on the back of stronger manufacturing activity raised the demand for Chinese exports and the demand for container shipments. At the same time, shortages of containers at Asian ports have exacerbated supply bottlenecks and further increased shipping costs as companies in Asia are reported to be paying premium rates to get containers back.”
Meanwhile, U.S. LTL carriers are “raising their base rates and contract prices and intensifying their focus on assessorial charges,” following increases in labor, equipment, and real estate operating costs. Then, you have the shipping industry’s search to lower carbon emissions. At this point in time, many companies are using LNG powered-ships to bridge the gap between heavy bunker fuel and zero-emissions vessels. To learn more about this week’s top stories, check out the links below:
