Shippers might finally be catching a break, as China-US spot freight rates plunge in the first week of October. With Chinese manufacturers throttling production due to the power crisis and the off-season coming into view, competition for freight capacity in terms of containers and vessel space has fallen off, moving prices down by up to 51.4% on some routes.
Data provided by digital freight forwarding company Shifl shows that the spot rate for shipping a 40-foot container from China to Los Angeles dropped by $9,000, or 51.4% between September and October of this year, from a high of $17,500 to $8,500.
However, this temporary reprieve could soon be overshadowed by a growing backlog of unfulfilled orders. Chinese energy rationing policies and the impact of COVID-19 shutdowns are throttling factory output meaning that US and EU manufacturing orders are not being filled on time. While US and EU businesses scramble to diversify their supply chains, inventory shortages and price increases will become more pronounced.
“Before the pandemic, our customers were getting containers shipped for around $1,500,” said Shabsie Levy, Founder, and CEO of Shifl.
“Some agents (co loaders) took advantage of the price increases and congestion by buying up capacity, and now they are looking to unload it as quickly as possible,” he added
“For shippers with inventory still in China, access to capacity at lower rates is great news. But the big question now is whether or not there will be products to fill these containers”
“These rates could go even lower. We’re already seeing long-term rates for shipping 40-foot containers from China to the U.S. go below $5,000,” added Levy. “
Shifl is bringing the freight forwarding industry into the future with technology and innovation that brings a huge array of real-life benefits to its customers. If you’re an importer looking to bring your business into today’s digital age, be more in control of your shipping processes, and pay less — Shifl is for you. Shifl is headquartered in New York and maintains offices in China, India, Vietnam, Bangladesh, Georgia, and The Philippines.