Ocean freight rates plummet despite peak season

Freight rates across many of the world’s key channels are finally receding back toward pre-pandemic levels, despite peak season, a time when stock deliveries are ramped up for the festive season, arriving.

One example of the sharp decline in pricing is the 50% decline in cost to ship from China to the West Coast of the USA, with a 40-foot container on this route now coming in at around $5,400. In the past week alone a 14% drop in prices on the Shanghai to Los Angeles route has registered.

European rates still sit higher, but are likewise sharply down. Similar containers from Asia into Europe are now coming in at around $9,000, which is over 40% lower than rates at the start of this year. In September of 2021, when supply chain shocks were a major cause for concern across the cycling industry, the rates had tipped north of $20,000 on some routes. The net result of this surge in pricing and lack of container availability led some larger box shifters to charter their own vessels to get around the bottlenecks.

For specific updates on particular routes, the Drewry Container Index has live charts.

Since that time stocks have begun to normalise in most quarters, although there still remains a lack of goods, mostly at the higher-end of the product spectrum and across certain popular service parts.

In the UK there remain problems at the docks. Recently the largest dock in the country saw strikes and there is renewed threat of further industrial action following a deadlock in talks.

As sideline issue, but a nonetheless pertinent one for brands to consider is the sustainability angle attached to shipping goods across the globe. As the friction loosens commentators have taken note of the carbon footprint disclosures made thanks to regulatory schemes and ESG rules.

A free to attend webinar on the subject of freight has been shared with CyclingIndustry.News, for which you can register below:

“How to stay on top of your containers from pick-up to drop-off” on September 20, 2022. (Sign up here)