Over the past week, the prices for containers dropped slightly, 2%, but prices continue to be vastly elevated compared to a year ago. For about a month now, freight rates have stopped increasing exponentially, however, this is not translating into relief for businesses. Multiple weeks now have seen prices stagnate or decrease, but only by a small percentage.
According to Drewry, their World Composite Index remains 276% higher than one year ago. Spot freight rates for Shanghai to Rotterdam, Shanghai to Genoa, and Shanghai to New York all saw the largest drop in price, 3%, while Los Angeles to Shanghai fell by 1%. Rotterdam to Shanghai and Los Angeles to Shanghai both rose 1%.
Bogged down with shipping delays and cargo that continues to pile up, officials from the ports of Los Angeles and Long Beach have announced a new fee for those containers that are lingering around the docks. Starting from November 1, carriers will be charged $100 per container with an additional $100 per container per day.
This new fee will not be assessed until November 15. Mario Cordero, the Port of Long Beach Executive Director said, “The terminals are running out of space. We need to make room in our terminals, approximately 530,000 container units are sitting on those waiting ships.” The hope is that this new fee may clear up the terminals to allow for more containers to be unloaded, easing the bottleneck.
As many ports face long delays, there is a growing fear that the holiday season will be severely impacted. According to an article from ABC News Australia, around 90% of all goods in the world are transported on ships, and shipping delays and container shortages are threatening to make this a holiday season like no other in recent years.
Moreover, manufacturing in China has been hit hard by the shipping delays, rising inventories, and an energy crisis. An article from CNN Business reported that the month of October was the worst month for Chinese factories since the start of the COVID-19 pandemic. For a second consecutive month, a government survey of manufacturing activity has shown a contraction.