Shipping Costs Have Tripled Since Last Year as Port Congestion Returns to Pandemic Levels - The Average Joe

Newsletter

Latest Issues Subscribe

Company

About Us Jobs
×

Become a better investor with our free daily newsletters

Join 250,000+ investors discovering new market trends and ideas.

    Shipping Costs Have Tripled Since Last Year as Port Congestion Returns to Pandemic Levels

    Rhea Lobo

    June 24, 2024

    Shipping companies might want to consider frequent sailor miles with all these delays due to port congestion. Since last year, Houthi rebel attacks near the Red Sea have closed the Suez Canal, causing major delays and increased congestion at ports from Singapore to Spain. These disruptions have extended voyage times, thrown schedules into chaos, and stranded containers worldwide — leading to a sharp spike in shipping costs.

    • As of Jun. 14, the average global cost of shipping a 40-foot container reached ~$4.1K — more than triple last year’s price and the highest rate since Sept. 2022, according to Freightos.
    • DeSales Trading’s Michael Murray notes that routes from Asia to the US East Coast are currently at $7K — a substantial rise from the pre-pandemic typical rate of ~$3.5K.

    Costly currents: The ongoing crisis is taking a toll on company earnings. DFS Furniture has halved its profit outlook due to prolonged delivery delays and escalated freight costs, affecting nearly $18M worth of goods. Similarly, apparel retailer J. Jill had to resort to costly airfreight to rush items ahead of Mother’s Day impacting logistics expenses. However, Nils Haupt of Hapag-Lloyd remains optimistic, stating, “Freight rates will fall, because there is no escaping that there is a lot of extra capacity at sea.”

    Trending Posts