Even though the pandemic is fading around the globe, the price of shipping has repeatedly broken records and reached the highest peak in months. Can you imagine how dramatic the upsurge is? Let’s dig deeper!
Freight rates are more than 200% higher than 2020
According to the Drewry World Container Index, container shipping rates from Asia to the U.S. increased to new record levels over the past weeks. The spot rate for a 40-foot container from Shanghai to Los Angeles increased to a record $9,733, up 1% from the previous week and 236% higher than a year ago.
Smaller and mid-sized brands get “squeezed out”
In order to get accustomed to the new shipping system, brands are taking actions to sidestep the crisis. Home Depot contracted its own ships in hopes of avoiding delays and rising prices, and Peloton spent $100 million to expedite deliveries, according to INSIDER’s report. On the other hand, brands that do not have abundant funds can only withdraw in the drastic changes.
US imports soar to record high
While the price of shipping containers has skyrocketed, the market still does not have enough massive ships to keep up with American’s outsized demand. According to the analysis of Trading Economics, imports to the U.S. increased by around USD 40 billion to USD 277.3 billion from July 2020 to May 2021, led by higher purchases of consumer and household goods.
When will the catastrophe end? Perhaps when all cities loosen Covid restrictions, people will return to local restaurants and cinemas instead of placing orders online or shopping in retailers whose products are mainly made from Asia. Do you agree with this perspective? Or do you have other opinions to share with us!!
