Background Logistics
Bad news: rates in logistics are rising again
The average price for container transport by sea showed a decrease for the first time in months in mid-October. And that way down was held. With that, the recovery in the logistics chain seemed to have started. Nothing could be further from the truth, because a clear increase is visible again this week. Drewry's World Container Index is up 2,3%. Freightos also reports that the declines are over for now.
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Choose the subscription that suits youThis week, Drewry's World Container Index stands at $9.262 per 40-foot container. The average price for container transport by sea is therefore 2,3% higher than a week earlier. Compared to the same period last year, an increase of 170% is visible. The average prices are even higher at Freightos. On the west coast of Asia and the United States, the price is $14.924 per container. That's the same as last week. Container prices in the east increase 2% to $17.195 per 40-foot container.
The largest increase was visible last week on the route from Shanghai to Los Angeles. The price rose by 5% to 10.138 per container. An increase of 4% was visible on the route from Shanghai to New York, to $13.118 per container. Looking closer to home, we see that shipping products between Rotterdam and New York has become 1% more expensive, up to $6.283 per container. Transport costs between Shanghai and Rotterdam remained stable at $13.564 per container.
Backlog is not decreasing
One of the reasons for the turnaround in the logistics sector is the fact that the backlog in the ports of Los Angeles and Long Beach, among others, is not decreasing. This, analysts say, is the price the global economy is paying for "building ultra-efficient networks in which just-in-time inventory practices dominate manufacturing and retail." If this system works well, manufacturers and retailers can reduce their inventory costs. But if the system becomes unbalanced, as is currently the case, analysts say it could take years before everything is restored. This is reinforced by the shortage of workers and storage locations.
This shortage also plays a role in air transport. According to logistics service provider Freightos, the popularity of this mode of transport is slowly increasing. But because the capacity of passenger aircraft is lower and there is a shortage of ground staff, the pressure on air rates is increasing. Air freight prices rose 0,5% last week to $4,2 per kilo. European rates have risen 30% since early November to $7,84 per kilo.