The past six to eight weeks have seen more disruption to shipping between Asia and the UK than we ever thought possible.
Rates increase by 600%
Port to port prices have increased by 600% over a matter of weeks. The below below graphic shows how rates for 40ft containers have sky rocketed.
Current Rates
A severe lack of space on vessels has led to a bidding war, driving prices to these ridiculous levels. Rates for shipments in shared containers are around £115 more per cubic metre than 3 months ago. Costs for 20ft and 40ft containers on FOB terms are commonly around £7,000 and £11,000 + UK Duty & VAT respectively.
Planning ahead
Rather than the rates falling as quickly as they’ve risen, we no longer expect a rapid fall in rates following Chinese New Year (CNY), but a gradual and partial return over a number of months from March 2021.
Initial market intelligence expected rates to soften fairly quickly post-CNY (in February) as this would provide the break in proceedings that the ports and shipping lines need to return to an even keel.
The rates have increased so dramatically that it’s meant many importers are “waiting for the rates to drop”. We expect this to have created an invisible backlog of imports that are yet to be booked. As importers finally see a rate that suits, or they can wait no longer, we expect lot of these shipments will be booked, keeping vessels full in the spring.
Shipping lines may not see the empty space on vessels which is necessary for prices to be driven down by competition between the lines… unless the port congestion improves and empty containers relocated appropriately allowing the shipping lines to run more vessels.
Plan for delays
If you’ve had a shipment on the move in December, we fully expect that you’ve been told about a delay to your shipment, when leaving China, arriving in the UK, or both. If you’re planning an import between now and Summer 2021 we would suggest that you add two weeks onto the standard shipping times to take these delays into account (although it could be worse on occasion).
If you know the outbound port and a ready date, please feel free to use our Delivery Estimator to plan ahead. Again, don’t forget to add two weeks onto the estimate due to the current level of delays.
These issues are breaking out of the industry press, hitting the mainstream media and are being raised in parliament…. but that doesn’t get your goods here any quicker or reduce your prices so we fully appreciate and understand the frustration that many importers feel!