Container shipping rates are rising around the world. Importers and exporters, accustomed to lower container shipping rates post-COVID-19 pandemic, are left wondering how much higher rates will increase as the industry enters peak season shipping.
Long Beach, California – The twin ports of Los Angeles and Long Beach have shown strong, consistent volume since the beginning of 2024, a surprise not only to the local Southern California drayage community but to freight forwarders, customs brokers, importers, and exports alike. The Port of LA in the first 4 months of 2024 recorded increases in loaded imports handled compared to 2023, while May 2024 recorded a slight decrease in imports of 4.5%. Exports increased for the 12th consecutive month per statistics published by the Port of LA.
Rough seas, however, are on the horizon. External forces outside of industry control have begun wreaking havoc on global supply chains that have only recently started to recover post-COVID-19.
Red Sea Crisis
Houthi fighters in Yemen have attacked cargo vessels in the Red Sea, a vital trade route that connects Asia with Europe, in response to the war in Gaza between Israel and Hamas. Container shipping lines have rerouted their vessels from the Red Sea route, and instead, are routing their vessels around the Cape of Good Hope in South Africa, increasing transit times for container vessels, and transit times for the shipping containers returning empty to manufacturing hubs in Asia.
Increased Import Demand
Consumer demand in the United States for cost-effective goods manufactured overseas in Asia has maintained strong levels. Importers are shipping their goods to ports in the U.S. earlier than usual to avoid peak shipping season supply chain strains. The Red Sea crisis, compounded with strong consumer demand, has reduced available space on container vessels, causing importers to pay premium prices on the spot market to get their containers on available vessels.
Tariffs on Chinese Products
The Biden administration and European government authorities have enacted tariffs on certain goods of Chinese origin, such as EVs, steel, and solar panels. Importers of these products are shipping these products as fast as possible, and paying premiums for space on container vessels, to beat tariff start dates.
The strongest storms make the best sailors. Since 2009, Comex Logistics LLC has assisted importers and exporters in the US with their container shipping needs. Contact us at door@comexlogisticsllc.com for any questions related to container shipping or drayage.
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