In recent months, US exporters have struggled to find containers for ocean shipping, amid a surge of Chinese imports to the US and skyrocketing rates from container shipping Asia to the US and Europe.
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The issue: ocean container lines find it more lucrative to move empty containers back to Asia for shipping at high rates rather than wait many days to get the containers to US exporters for eventual shipping for comparatively low pricers.
Now, however, the great container shortage is hitting Chinese exports too.
The situation with containers only exacerbates existing challenges to get container freight out of China booked and delivered given the surging demand, with containers not coming back to China fast enough to meet rising export volumes, even when sent back empty.
All this has led container shipping rates from China to jump by more than 300% since lows seen in March.
As reported this week in the South China Morning Post, “an uneven distribution of containers at major ports around the world is causing a major headache for exporters. They either have to pay thousands of dollars extra to book shipping space instantly [pot market or wait several weeks before their goods can be transported [contract market].”
Chinese exports, at least according to government data, hit a record monthly high in November, rising 21.1% versus 2019 to $268.1 billion, while imports grew by just 4.5% to $192.7 billion. This led to a giant trade surplus of $75.4 billion, up 102.9% from the same period in 2019.
The South China Morning Post reports that with imports in China well below its exports, container vessels sailing foreign ports have not been able to reach full capacity. As a result, containers have been stacking up at yards abroad, while ports in mainland China, including Shanghai, Xiamen and Ningbo, have insufficient inventory of containers for exporters to use.
The Post quotes on Chinese freight forwarder as saying shippers looking to book a space on a container vessel bound for North America have to spend an additional $3,000 for a premium service that guarantees containers, priority loading and shipping.
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That on top of soaring spot market rates. It cost just about $1,200 for transporting a 40-foot container to the US west coast in the US in March, but have soared to about $5,000 in November.
All this of course is happening well after the normal peak Christmas season jump in volumes, meaning the situation may not return to more normal conditions any time soon.
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