Many industries have been significantly impacted due to the ongoing COVID-19 pandemic in the United States and around the world, and the shipping and logistics industry is no different. One way the virus has affected the industry is increased costs in shipping container shipping rates in Houston, TX and beyond.
If you intend to ship internationally, it is important to be aware of these rising costs and how they could affect your company and its bottom line. Here’s an overview of what you need to know.
About the changes in ocean freight rates
Changing ocean freight rates is nothing new—those rates ebb and flow frequently due to a variety of market factors. However, the changes caused by COVID-19 may look a bit different.
Shipments at India’s largest ports heading to the Western Mediterranean and Northern Europe have gone up by nearly 25 percent, largely due to equipment shortages and reduced vessel capacity in that region, caused in part by the effects of the virus on that part of the world. That has led to increased ocean freight rates since March.
While these Indian ports and the changes there have had a significant impact on market rates, they’re not the only ones having an outsized influence on the market. Containers coming from the United Arab Emirates and various parts of China that are heading to Africa have also seen increases in rates.
The good news is that despite the changes in rates caused by issues with equipment availability, other types of charges have remained relatively consistent. For example, pickup and drop-off charges haven’t seen significant movement for most providers in recent months.
What’s also important to note is that while some regions have seen major equipment shortages that have impacted rates, there are other countries that currently have equipment surpluses. This has caused some container imbalances that are partially to blame for the fluctuating rates, but as those imbalances start to level off, so too will those rates.
On the American front, container imports are once again starting to pick back up after a six-month break. Retailers are starting to emerge from pandemic-related lockdowns so they can stock up on inventory before the holiday season arrives. This means increased demand on container ships across the Pacific, and sudden increases in operations. August saw outstanding numbers at ports in the United States, and all signs were pointing to a strong September as well.
Reports indicate capacity from Asia to the Pacific coast of the United States is now 25 percent higher than it was in May and seven percent up on the year, showing a big increase in short-term demand.
All this is to say that market prices may be volatile right now for shipping containers. This is due to all of the uncertainty caused by the early phases of the pandemic, combined with a sudden rush to recover as the holiday season approaches. Keep an eye on prices and expect a bit more volatility, but rest assured this is not a phenomenon that will last forever.
For more information about changes in shipping container costs in Houston, TX, contact the team at A Mobile Box today.
Categorised in: Shipping Containers
This post was written by Writer