Sea shipping rates to US soar as China’s foreign trade revives
Container rates from China to the US have soared in recent weeks, driven by the US’ high demand to restock amid the COVID-19 pandemic, the upcoming holiday season and China’s pick-up in foreign trade in the fourth quarter.
The cost of a standard 20-foot-equivalent container jumped 4 percent from September to $2,300 in mid-October, an increase of about 20 percent from the end of June when it hit a recent low. Rates now stand 30 per cent higher than the same period in 2019.
The sharp rise has mainly been driven by high demand on China-North America routes, which led to a container shortage, the Global Times have learned.
An employee at Shanghai Port told the Global Times on Monday that in recent weeks, more clients have encountered container shortages, which delayed their shipments.
“Some book a shipping space but cannot find containers,” the employee said, and shipping rates soared in recent months as export orders boomed.
The total shipping cost from China to the US West Coast is 30 percent higher than the same period last year, while costs to the East Coast have almost doubled, Li Xian from Shanghai Lixian Freight Forwarding Co told the Global Times on Monday.
“Ships are not available at present. One would be lucky to be able to book a space as early as mid-November,” Li said, noting that the pandemic in the US has led to low work efficiency at ports, which prolonged the entire shipping process.
Demand for sea shipping has rebounded as lockdowns ease and the US seeks to prepare for the pandemic to worsen in the winter, along with high demand for Chinese goods in the holiday season, Lin Guijun, vice president of the University of International Business and Economics, told the Global Times on Monday.
Business insiders predicted that these conditions could persist for a while as more manufacturing orders shift from third countries that are engulfed by a second wave of the pandemic – such as India – to China, where economic activities have returned to normalcy.
China’s GDP grew 4.9 percent in the third quarter, bringing the growth in the first three quarters to 0.7 percent from a year earlier.
Foreign trade increased 7.5 percent year-on-year in the third quarter to 8.88 trillion yuan ($1.32 trillion), with exports achieving a strong rebound of up to 10 percent from last year.
“With the containment of COVID-19, China has won more foreign trade orders from third countries. It is expected that China can enlarge its global export share by 2 percent this year,” Lin said.
Source: China Daily