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June Update: Shipping Congestion Continues To Threaten International Trade

Logistics companies, freight forwarders, and packaging companies like Crate This will often say you should work with them because even on a good day logistics can be a headache. And if logistics are a headache on a good day, the last 18 months have been a chronic migraine. South China has seen a large spike in shipping congestion that is affecting both imports and exports. After the Suez Canal blockage, the massive spikes and inflated prices for international shipping, and just the general maelstrom of logistical nightmares COVID-19 has produced, we are still not at the end of this.

What Is Happening In Southern China’s Shipping Ports

In late May, one of China’s busiest ports announced that it wouldn’t accept any new export containers because of a COVID-19 outbreak. This happened after months of delays and high demand had increased international shipping through the roof. Around the time experts were saying “we have never seen freight prices get this high” the Yantian Port closed. According to shipping authorities in the area, they believe that the Yantian Port will be back to normal by late June. But like with the Suez Canal blockage, just because things will be “back to normal” by X date, that doesn’t mean prices or schedules will return to normal. It took months after the Suez blockage for things to stabilize due to the rerouted shipments. And now we will likely see more months of delays, price hikes, and inflation.

What Does This Mean For International Shipping

We are at a breaking point as a global economy. For almost 18 months it has been one disaster after another for international trade. And just when experts are hoping to predict stability and a return to normal the next emergency hits. This is especially troubling because late summer is when peak demand occurs for both Europe and the United States. The inflation costs and delays of these shipments will likely be felt by all Americans as commercially imported goods will likely see large price increases. It is expected that international shipping is going to continue at maxed-out capacity for the foreseeable future. The cost increases for international trade will likely domino into affecting prices on almost all imported goods in America. And many experts fear that the Yantian Port closure could happen again. More outbreaks of COVID-19 around busy ports could cause further closures setting off more chain reactions through our international trade routes.

How Crate This Can Help

At Crate This we have decades of experiencing navigating international trade issues. We have been with our clients through all sorts of international trade issues. And although the current situation is unprecedented, we have the tools to help our clients make sense of these logistics obstacles. For more information on how we can help you store, pack, and ship goods, please contact our team.

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