Resolving global shipping delays may take a while
Rates are expected to continue to rise and remain above the pre-pandemic levels. This means businesses can expect to pay these higher prices in the long term.
Why Are the Prices Going Up?
One of the reasons you can expect to see the prices continue to go up is that there are continued global imbalances that are making the prices increase. The COVID-19 virus affected every country across the world, but not every country is tackling the outbreak the same anymore. With countries locking down and opening back up at different times, there is an imbalance. This is also impacted by shipping companies cutting the capacity of major trade routes. On top of this, there is a shortage of empty containers.
Here are a few other reasons why these prices are going up:
- There is a lack of alternatives to ocean freight. This means that it is difficult to avoid the increasing transportation costs at this moment.
- Canceled port calls cut about 10% of scheduled capacity. There have been improvements this quarter, but cancelations are still happening.
- Between port congestion and closures, increased shipping costs are a direct result.
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