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Coronavirus: shipping rates to stay at ‘unprecedented’ levels until pandemic brought under control
- The coronavirus pandemic has driven shipping costs to record levels, with trade disruptions throwing global container flows into disarray
- Despite efforts to boost container production in China, some experts estimate shortages and port congestion could stretch on until early 2022
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In more than 10 years in the logistics business, David Sun says he has never seen shipping fees climb as high or quickly as they have this year.
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“It’s unprecedented,” he said on the phone from Yiwu, a central Chinese city known as the world’s largest trading centre for small commodities.
Ocean freight fees are three to five times higher than the same period last year. The cost of moving a 40-foot sea container from China to Dubai is normally less than US$1,000, but it now costs about US$5,000.
The cash flow pressure is so high that I have mortgaged my house to the bank
The volatile prices have caused a huge financing problem for Sun, who must pay his shipping booking agent monthly, but receives payments from clients once every two or three months. Some customers may take up to six.
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“That means every month I need to pay the agent three to five times,” Sun said. “The cash flow pressure is so high that I have mortgaged my house to the bank.”
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