While inflation appears to be slowing down in developed countries, the cost of shipping cargo by sea remains a major outlier. Prices for shipping containers from Asia to the United States and Europe have tripled since late 2023, with key routes exceeding $6,000 per 40-foot container according to the Drewry World Container Index.
This surge is attributed to several factors. Attacks on ships in the Red Sea for nearly half a year have strained capacity in the industry, which handles roughly 80% of global trade by sea. This disruption has caused bottlenecks in major Asian ports, including Singapore, a vital crossroads for maritime freight. Wait times for berths in Singapore have reached nearly five days, while Chinese ports are experiencing delays of one to four days.
Solid consumer demand, particularly in the US, further complicates the situation. Imports at the Port of Los Angeles, the busiest in the US, remain above pre-pandemic levels despite a slight decrease in May 2024.
Drewry reports that shipping costs continue to rise. The price to ship a container from Shanghai to Los Angeles climbed for the sixth consecutive week, reaching $6,025. The rate for the Shanghai to Rotterdam route is even higher at $6,177, the most expensive since September 2022. Similarly, the Shanghai to Genoa route, heavily impacted by the Red Sea situation, saw a 3% increase to $6,862, also the highest since September 2022.
