By Jessica Mao and Ellen Wan
Since August, the price of container freight from China to the United States has soared ten times, setting a record high. Due to the CCP (Chinese Communist Party) virus pandemic, containers shipped from China cannot return immediately after unloading at their destinations, causing congestion due to empty cargo rotation and limited shipping capacity.
Global shipping prices continue to rise as containers become difficult to find. Since January, the cost of container shipping has grown four times. As of Sept. 17, the China Containerized Freight Index (CCFI) has increased by 90.34 percent from the beginning of 2021.
According to data from previous years, shipping a 40-foot container from China to the United States cost around $1,000 to $2,000. Since August of 2021, the container freight rate from China to the United States had exceeded $20,000 per 40-foot container, an increase of ten times and a historic high.
Wang Qian, an employee of China Yuexin Logistics, told Beijing news magazine Caijing that in 2019, the freight cost for a 40-foot container from Tianjin, China to Los Angeles was $1,600 to $1,700. And now it costs $15,000.
Qian suggested that the long docking time for cargo at foreign terminals results in high costs. To save costs, many shipping companies return before collecting empty containers, resulting in fewer and fewer containers in China. Empty containers are usually fully taken in the early morning. Many wait in line for the broken containers to be repaired, and they are snatched away immediately after the repair. Some shipping companies have opened online reservations for freight in the middle of the night.
Insider: The Vicious Cycle of Delay in Freight Caused by The Pandemic
Mr. Li, a Chinese shipping agency insider, talked to The Epoch Times about the situation. Containers from China cannot be unloaded immediately after arriving at their destination. While cargo piles up at the destination ports, empty containers cannot be put back onto the ships for return. This vicious cycle has caused container freight to skyrocket.
According to Li, during the CCP virus outbreaks, many countries (including China) briefly closed their ports, causing delays as the container ships couldn’t unload for two or three weeks upon arrival.
“The delays caused a backlog of products waiting to be shipped. When the ships return, there aren’t enough containers for the products. The shipping capacity is therefore reduced, and the cycle escalates,” Li said.
“The pandemic has affected the entire freight industry. For example, workers at the dock terminals are also facing shortages. Products are not getting transported fast enough to the docks, driving up the shipping costs,” Li added.
Expert: Multiple Factors Lead to Container Tension
A private investment consultant in North America, Mike Sun, told The Epoch Times that a surge in export orders, insufficient supply, and lack of empty cargo rotation have caused severe traffic congestion in logistics. And the situation has become worse since the beginning of the year.
Since April, the Delta variant of the CCP virus, commonly known as the novel coronavirus, emerged in many parts of the world, with countries in South and Southeast Asia, including India, Vietnam, Malaysia, experiencing severe outbreaks, causing some manufacturing and processing orders to return to China.
“The situation has not been alleviated even now; the congestion cycle continues. Orders are backed up and cannot be shipped. A large number of goods are currently being prepared for Christmas, waiting to enter the American and European markets,” Sun said.
“China’s container companies are expanding their production capacity, but not for two months or so, they are still far from being able to quench their immediate thirst. [The containers] cannot be produced and put into use immediately; they should expect no improvements in the short term.” Sun added.