600% Price increase in 3 months

Asia to Europe ocean freight rates are continuing to climb spectacularly amid declines in available slot space and equipment, with the UK particularly hard hit by price rises and shortages of capacity.

Freight forwarding sources are reporting rates of US$10,500 per container to secure capacity from China to European main ports, with China to UK rates now topping $16,000 per container in what has become an auction for space.

UK freight forwarding sources indicated a roughly fourfold increase in ocean freight prices in the last quarter of 2020, alongside and partly caused by high levels of port congestion, shortages of empty containers, and vessel and cargo diversions to mainland European ports, had continued, with prices rising even further this month. They also confirmed reports indicating that to secure China-UK capacity in the coming weeks was now requiring customers to pay US$16,000 per container or above, a whopping 600% increase from November 2020.

Containers are in seriously short supply and there is no end in sight, the Chinese New Year may also create a bottleneck. This may result in unit cost increases and beforehand, more ‘out of stock’ signs will appear in the virtual basket, as online shipping levels continue to drop among UK and international consumers. For UK importers, this is now survival of the richest!

The Far East carriers do not appear to want UK cargo although they are serving the UK but at a price.  The UK forwarders have good working relationships with their counterparts in the Far East but these relationships are being strained as UK freight forwarders feel that shipping lines are currently profiteering, disrespecting the relationships with their customers. It is still possible to get cargo from Asia to the UK, but it comes at a cost and that cost has risen 600% in 3 months. If the UK does not pay the unreasonable price hikes it will not get the goods, it’s a simple as that.

In the meantime, UK forwarders are working flat out to deal with not just these Asia to Europe container issues, but also complications for customers relating to the end of the UK’s transition period from EU rules at the end of last year, which in some cases are compounding some of the challenges with UK container imports.

The Chinese New Year may offer a small period time for some respite, to get equipment etc in the right place, but the bottom line is that demand has not diminished. It may bring a little bit of respite, but then creates another problem, a bottleneck.

The UK is experiencing the highest rates ever and the worst ever service. Further price increases cannot be ruled out!!!!!!!!

Teckwood are working hard with our partners to mitigate the issues.