Analysis of recent sea freight price increase

Shipping cost have surged again even in the traditional season, I have summarized four ressons.

1.European routes have been significantly affected by the crisis and the Red Sea, forcing ships to detour around Africa. The African route originally had limited capacity, but this year had seen an influx of vessels. Longer voyages and increased trans shipment ports have LED to more vessels needing to operate, extended journeys coupled with port congestion have resulted in many containers not returning. this is also the main reason for the recent container shortage.

2.The price increase in South America is mainly due to Brazil’s and Mexico’s plans to impose additional tariffs on Chinese electric vehicles in July and beyond. Many automakers are desperately shipping to these regions without actual orders. According to a source, BYD has already shipped more than 100,000 vehicles. Electric vehicle companies have seized the majority of shipping resources. Many shipping companies withdrew vessels from running to West Africa for these large orders, leading to a general increase in rates in West Africa. These EV makers not only compete for shipping resources, but also reportedly fill up destination ports’ yards quickly with automobiles.

3.The U.S. election has been claiming future tariffs of 50%-60% on Chinese goods nearing the election day, which has led some Chinese companies to increase their investment in South America. Additionally many importers are stocking up in advance, causing the peak season to arrive early

4.This is the real reason, shipping giants are taking advantage of the above reasons and actively intacidly raising prices together. 

Exporting companies need to plan their shipping schedules in advance, as everyone is scrambling for containers. Estimated tims of arrival is also unstable. 

If you have an accurate purchasing plan, please contact us for quick stock, KESSY hardware provide one-stop product procurement services, will be happy to meet your needs.