Higher shipping prices, Higher shipping prices everywhere!!!
Oh no!!! It’s 2021 and COVID-19 is still around, with no sign of it being a thing of the past any time soon. There is no doubt that COVID-19 has had a deep effect on all aspects of our lives, especially on all economies around the world.
As borders shut, countries go into lockdown and production slows, the impact of COVID-19 is felt deeply in the shipping industry, affecting the entire supply chain. Especially shipping from China to the USA.
Take a deep breath.
We’ve got some great tips and insights on what is currently happening and how to prepare when you do eventually take that leap of ordering your shipment.
🚢 Shipping prices have skyrocketed (seriously)!
In the past year, the price of a 40-foot container has increased by over 350% for shipments between China and North America.
The cost increase can be attributed to numerous factors, but none more so than the impact of Covid-19 on the shipping industry and a mismatch between the timing of lockdowns around the world.
A 20ft container from China/East Asia to North America East Coast this past year:
• Lowest: $2,873
• Highest: $7,629
😯 What exactly is going on?? 😯
1. Containers are stuck in the USA:
China came out of lockdown as the EU and the US entered lockdown. There was a surge in demand for consumer goods that are often manufactured in China, leading China’s shipping companies to send more ships and containers to these markets.
However, there has been little or no incentive to return the shipping containers to China; with economic activity in large parts of the EU still limited, many of the containers would likely return empty.
2. Containers are stuck in China:
China’s warehouse storage is oversubscribed, meaning that companies that are unable to export goods because the US/European ports are at capacity have little choice but to store stock in any available containers, usually portside, until the West comes out of lockdown and this congestion can start to be cleared.
Both outcomes result in the price of shipping increasing because there is greater demand and less certainty regarding shipping times, costs and loads. So even though demand for international shipping dropped overall by as much as 14% in volume and 21% in value last year, prices have still skyrocketed.
Your patience will be tested due to SHIPPING DELAYS
The average shipping time from China to the USA has been delayed by 3 days up to 2 months. COVID-19’s effects on the freight forwarding industry caused a massive delay in shipment arriving on time, and the general cost of shipping.
• A door to door air freight delivery takes 5 - 7 days before the pandemic, which now takes 8 - 10 days
• A door to door ocean freight delivery takes around 25 - 35 days before the pandemic, which now takes 45 days MINIMUM
🚧 Reduced port staff and factories temporary closed:
Many countries entered lockdown, and economic activities were restricted. This reduced the number of port staff and slowed down cargo handling speed. At the same time, factories temporarily closed. To maintain freight and avoid economic losses, shipping lines quickly reduced the number of operating ships.
⛔️ Fewer ships and lack of space:
In the autumn of 2020, world economic activities started to recover. Countries resumed their production and export volumes increased. But shipping lines still operated with fewer ships (meaning lack of space) and the ports with less staff. This caused massive delays and container shortage.
⏰ Longer wait times:
Some countries were taking selective measures by opening their factories for production one week and closing them again the next. This irregular goods flow created huge problems with port congestion and shipping lines choosing not to enter certain ports due to the long waiting times.
How does that affect me as an E-commerce business owner?
A large number of containers are either stuck in the wrong ports or delayed by several weeks.
Containers are piled up in ports in North America and Europe, where they are not needed, while other countries are in desperate need, struggling with container shortage. This means that if you need to ship goods between China and Europe – especially goods that require special containers – it may take weeks to get hold of them.
Breathe. A few downward dogs might help too. We can get through this together!
There are ways in which you can have more “control” and information on your shipping needs and how to navigate during the pandemic. Check below
👏How to maintain your cool when the shipping price skyrockets and delays are abundant?
Plan Plan Plan:
“The early bird catches the worm”. We cannot stress this enough. Book your shipments early.
Because of the container shortage and general delay caused by the pandemic, many shippers are unable to make last-minute bookings.
Make sure to book your shipments as early as possible, even a few months in advance, just to secure a space for your goods.
• We recommend at least 7 days for air freight
• We recommend 2 - 4 weeks for ocean freight
Communication is key:
The last thing you want is to wait for a shipment without knowing where it is or when it will arrive.
Make sure to communicate regularly with your shippers, if they are facing any delays, holds or storage issues. We believe in open and transparent communication between us and our valued customers.
Split your shipping:
Ever heard the saying, “Don’t put all your eggs in one basket”? We agree. Try splitting your shipments between various shipping methods.
An example would be to ship your smaller goods and quantities by air and the larger ones by ocean. This gives you options just in case there are any unforeseen delays.
Allow customers to pre-order your products:
Allowing customers to pre-order your products gives you the time to plan accordingly on how many products you need to ship from your supplier/manufacturer. This decreases the chance of any surprise delays or shipping price surges.
Insurance is a game-changer:
This is a no-brainer. According to industry observers, cargo theft and loss estimates range from $10 billion to $30 billion a year.
Yikes!! Don’t get caught without a safety net, insuring your shipment is valuable.
Get your packaging pandemic safe:
Also the threat of COVID-19 is still very real, seeing as shipments are handled multiple times. Ideally you would want insurance included with your shipment and for it to be packed and delivered in one piece.
We recommend using Packmojo for all your custom boxing
Check out our article on how to save your cost on shipping
❤️Stay strong, it will be over soon! ✈️
As COVID-19 is still a big part of society and its effects can be felt throughout the E-commerce industry, the growing uncertainty around shipping prices and times are likely to stay for a while.
But with proper planning and a shipping partner, these uncertainties can be mitigated. So go ahead:
Have fun and take that leap (safely)!!
Let us take care of everything and receive your first shipment with ease. Get a free instant quote.
Proud Co-Founder and CEO of Bookairfreight. Shortly after starting to work in the world of logistics, I was astonished at how difficult and time consuming it was for businesses to get their hands on a simple air freight quote. I saw this as an opportunity to really make a difference in people’s lives, and felt like I had to do something. It was the spark that lit the fire of Bookairfreight’s creation.