As you may have read in the BBC news website, The Times and other mainstream media the cost of container shipping from China to the UK and also the rest of Europe as well as the USA has steadily risen from last November and continued through 2021.
Why are prices increasing so much and are we going to reach a peak? We are hearing that due to western economies coming out of lockdown, demand is up 29%, but all container ships are in service and furthermore the supply of containers can only be increased at 8% per year due to limitations of production in China.
With demand constantly outstripping supply, shipping lines increase their prices each month with the intention of dampening demand and probably more importantly for them, making as much money as possible.
It seems shipping lines themselves are as surprised as anyone that the constant price increases are not dampening demand and the increases are being paid.
Unfortunately the global picture is that as long as the demand carries on prices will carry on increasing.
Why can you not buy ahead and lock in bookings at current prices?
This is not how container shipping works and prices are those at the applicable at the time of shipment.
So, for example, if a shipping line would allow a customer to make a booking for three months in advance, the rate that would apply would be based on the scheduled departure date of the ship. So whatever rate is applied at the time of booking is superseded by the rate applicable on the scheduled date of departure.
This is a double edged sword as shipping lines do not normally then charge if bookings are amended or cancelled.
What are governments doing about this?
Governments are doing very little, if anything. Container shipping is a worldwide industry and the UK Government, on it’s own, is too small to force changes on the industry, even if it chose to do so.
The container shipping lines themselves have a block exemption from cartel legislation in the EU and other jurisdictions.
How do I get containers booked at a competitive freight rate?
The simple answer is consult K&L Freight.
We can advise you what the very latest news is on sea freight rates and container availability, as prices can change every few days with every port being different, depending on demand.
We can also advise on part load (LCL) shipments from China and the Far East. Often, at the present time, it makes sense to send smaller shipments, more often using this service, than to save up orders and then send as a full load.
If sea freight transit is too slow for you, we, at K&L Freight, have market leading airfreight rates rate and can price any requirements you may have.