Container freight rates from China and Asia to the East and west coasts of the United States rose again as there was no sign of a slowdown in U.S. consumer demand for goods, according to a new report.
Independent commodity intelligence service (ICIS), a global market intelligence provider, pointed out in a recent report that the latest global port tracking report of the National Retail Federation (NRF) of the US Trade Organization shows that the throughput of the country's ports will remain high and then return to normal growth later this year.
The NRF said that even after the holiday, the supply chain challenges will continue because although the significant growth of imports has calmed down, the number is still high.
In addition, the Omicron variant "is a wildcard that will not only affect the supply chain workforce, but also promote more imports again if consumers stay at home and spend their money on retail goods rather than going out," the Federation said.
According to freightos, a logistics platform, the freight cost of transporting a 40 foot container from China to the west coast of the United States once reached $20000 in August 2021. As of January 14 this year, this figure fell back to $14600, which is more than 10 times higher than that before the outbreak, although it is lower than the peak last summer. In February 2020 before the global outbreak, the price was about $1200.
The operating rate of many factories at home and abroad is not saturated, the docks are shut down, and epic congestion is being staged. In recent months, tens of thousands of containers full of imported goods have been stranded in U.S. ports, and a large number of ships have lined up at the port for weeks. ICIS said 101 container ships were recorded at the ports of Los Angeles and long beach in mid January.
Lars Jensen, a container shipping expert, said congestion in North America had deteriorated significantly recently, and data as of January 14 showed a sharp deterioration in port conditions. "Judging from their status since they started providing these updates in November 2020, the situation in North America is much worse than at any time in the past 14 months," he said in a social media post.
At the same time, the Los Angeles and Long Beach port authorities said that the consideration of "container detention fee" of the two main portals would continue to be postponed. They added that the total number of stranded containers at the two ports had decreased by 55% since the plan was announced on October 25 last year.
The analysis shows that the obstruction of global supply chain and the mismatch of market supply and demand are the direct reasons for the rise of global sea freight. In addition, factors such as the reduction of terminal operation efficiency, the shortage of labor force, the sharp rise of ship and container leasing costs, and the increase of costs caused by the continuous attempt of supply chain alternative solutions have also promoted the further rise of freight rates.