Ocean freight surging reasons in May, 2024?
Recently the shipping cost has surged again even in the traditional offseason, here Hebei Shaoman International Trade Co., Ltd has summarized 4 reasons for the ocean freight surging in the following:
1. European routes have been significantly affected by the crisis in the Red Sea, forcing ships to detour around
Africa.
The African route originally had Limited capacity, but this year has seen an influx of vessels. Longer voyages and increased trans-shipment ports have Led to more vessels needing to operate. Expending journeys coupled with port congestion have resulted in many containers not returning. This is also the main reason for the recent container shortage. This is a key reason of ocean freight surging.
2. The ocean freight price surges in South America is mainly due to Brazil’s and Mexico’s plans to impose additional tariffs
on Chinese electric vehicles in July and beyond.
Many automakers are desperately shipping to these regions withoutactual orders. According to a source, BYD has already shipped more than 100,000 vehicles. Electric vehicle companieshave seized the majority of shipping resources. Many shipping companies withdrew vessels from running to West Africa for these large orders, leading to a generalincrease in rates in West Africa. These EV makers not only compete for shipping resources, but also reportedly fill updestination ports’ yards quickly with automobiles.
3. The U.S. election has been claiming future tariffs of 50-60% on Chinese goods nearing the election day, which has led some Chinese companies to increase their investment in South America. Additionally many importers are stocking up in advance, causing the peak season to arrive early.
4. This is the real reason of ocean freight surging, giants are taking advantage of the above reasons and actively intacidly
raising prices together.
Exporting companies need to plan their shipping schedules in advance, as everyone is scramling for containers. Estimated Time of Arrival ( ETA) is also unstable.
Chinese exporting companies already have low profits, and this time they have to endure the pain of being squeezed even more. I sincerely hope that there will be an ethical company that can change the situation in shipping. Also here remind of customers to make shipment arrangements and order planning from long-term business consideration.
