Freight Rates for Overseas Shipping Hit Historical Highs

WASHINGTON, DC – Another reminder of the COVID-19 shutdowns from last year is making itself known: a shortage of available shipping containers.

Even though the Chinese have built more than 5 million new containers in the past two years, they are not enough to meet the global demand for exporters.

This shortage, or some might say “bottleneck”, along with the recent blockage in the Suez Canal, has led to a tremendous increase in shipping costs as the Shanghai Containerized Freight Index increased 44 percent from the previous week to another historic high, and more than a three-fold increase from 2020 according to CGTN. They also report that a container traveling from Shenzhen to the Port of New York now costs $10,000.

Rep. Jim Costa (CA-16) explains that 44 percent of his state’s agricultural products are exported but demand for the containers are causing owners to demand the return of them empty. “That’s an unfair trade practice in my view”, he asserts. Some of that could be helped by infrastructure improvements in expanding the capacity of the nation’s largest ports (all located on the West Coast). Freight rates are expected to peak later this year and should dissipate at the end of 2022.
(SOURCE: All Ag News)