Industry Update: Ocean Freight Costs & Delays Increase

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Industry Update: Ocean Freight Costs & Delays Increase

freight ship docked

The state of shipping internationally continues to be a challenge for many American companies. There has been a non-stop demand for ocean freight from Asia to the United States. Many of our ports continue to be overwhelmed, leading to a variety of issues in international shipping. Our west coast ports have been hit the hardest due to the limitations that the pandemic caused coupled with the increased stress on the international shipping between Asia and America.

Ocean Freight Delays Due To Congestion

American ports are continuing to experience congestion. There were more than 20 ships waiting outside both Long Island beach and Oakland’s ports over the last few weeks. The demand for products and materials from Asia will continue to put pressure on these ports as more American businesses prepare for the summer. Retail locations nationwide are trying to restock and get ready for peak retail season. With increased pressure, it is unlikely we will see an end to shipping delays and price increases in the near future. Even after the Suez was unblocked with the Ever Given release the echoes of that issue continue to haunt international shipping. Even a month after that blockage, global trade is still feeling the effects in both pricing and shipping capacity.

 Ocean & Air Freight Costs Rise

With delays and congestion comes price hikes. Costs for international shipping have spiked for both ocean and air freight for almost all shipments coming to America.

  • Europe-North America: In April, rates for European shipments to the states have spiked 57% since March and 83% since the start of 2021.
  • Asia-US East Coast: Due to reduced capacity caused by the Suez delays last month, shipments from Asia to the east coast have continued to increase.
  • Asia-Us West Coast: Some good news is that congestion on the west coast has seen some improvement from early 2021. However, rates for freight coming from Asia to our west coast are still triple what we saw last year.

International trade is also suffering delays and increased costs between Europe and Asia as well:

  • Asia-North Europe: Shipping rates heading to Europe from Asia have increased by about 4% due in part to the delays that were caused by the Suez blockage.
  • Asia-Mediterranean: Additionally these shipping lanes saw a 7% increase and are continuing to see surges in price as well as frequent delays.

When Will Ocean Freight And Air Freight Prices Normalize?

As countries around the world re-open and decrease COVID-19 restrictions, there is increased demand from consumers who are returning to retail locations and other businesses. This coupled with stimulus programs has increased pressure on American businesses to restock in bulk after a year of being under-stocked due to economic problems related to COVID. We are at a crucial moment globally where most companies are understocked, supplies are down, and demand is skyrocketing. Material costs continue to soar nationally, with steel and lumber prices skyrocketing. Meanwhile, the global consumer base is increasing demand as they return to work, receive stimulus money, and are looking to return their own lives “back to normal”. On top of all of this, issues like the Suez blockage are creating more vulnerabilities in supply chains. With all of these factors, it is unknown when things will return to normalcy. It is expected that high demand, decreased supply, and shipping issues will continue throughout the summer. Now more than ever, it helps to work with freight forwarders and shipping experts who can help businesses make sense of this chaos.

International Crating Services & Freight Forwarding

Crate This partners with Bruning International to provide both expert crating services as well as freight forwarding. If your business could benefit from help with crate manufacturing, commercial storage, and freight forwarding services, please give us a call.

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