Ocean carriers’ schedule reliability is still declining, with delays of up to 30 days on the worst-hit China — EU routes, and almost 22 days on the worst-hit China-US West coast routes according to container tracking data from project44.
While some US ports are still receiving shipments from China without serious delay (by 2021 standards) extant delays remain costly, and are worsening in most cases.
Prices are rising across all major US ports, painting an overall negative picture for shippers in the US.
Looking to the EU, delays are more severe, and shipping costs have created an extremely challenging operating climate for businesses with China-EU supply chains.
Adam Compain, SVP Data Insights, project44, said: “If current circumstances hold, we’re going to see many more empty shelves heading into the holiday shopping season and beyond.”
Josh Brazil VP, Data Insights, project44, added: “There’s no quick fix here. Unless demand drops significantly after the holiday rush, this could be a multi-year problem.
“Shippers can no longer absorb the costs. Sustained astronomical shipping rates coupled with a delayed supply are already causing inflationary pressures in the broader economy.”
Meanwhile, maritime short term contracted rates inked between carriers and Beneficial Cargo Owners (BCOs) and freight forwarders have continued their multi-year rise across major trade lanes with average China — EU container rates rising by triple digits year-over-year across major port pairs, reaching $12,977/40 ft standard dry container in August.
For China-US West Coast routes, short-term contracted rates were up 102% year-over-year to US$6,570 last month, according to Xeneta, the freight rate benchmarking platform.
Patrik Berglund, CEO of Xeneta, noted: “The whole container shipping industry is under incredible stress right now, and it’s going to keep building.
“A drop in rates is not in sight as overall capacity will remain very tight. The upcoming tender season can be the toughest in ocean freight history for shippers.”
Highlighting some notable port pairs, data from project44 showed that between August 2020, and August 2021, delays for containers moving between the Chinese Port of Yantian and the West Coast US Port of Los Angeles increased from a monthly median of 2.46 days to 12.93 days.
Over the same time, the monthly average market price for China- West Coast US routes for a 40-ft container increased from US$3,247 to US$6,570.
Likewise, between August 2020, and August 2021, delays for containers moving between the Port of Shanghai and Rotterdam port increased from a monthly median of 1.88 days to 15.19 days.
Over the same time, the monthly average market price for China- EU routes for a 40-ft container increased from US$1,650 to US$12,977.