Shipping costs skyrocket 1000% on some routes
The cost for Portuguese shipping agents in transporting containers has skyrocketed by 1,000% on some routes between the West and Asia, which reflects the global supply chain crisis.
The cost of Portuguese exports on some routes to Asia and the Far East has risen by as much as 100% according to the business daily, Jornal Económico.
This has been reflected in an increase from €1000 to €2000 for a 40 Teu container or €700 to €1,400 for a 20 Teu container.
“However, it depends a lot on the availability of the containers, and the space on the ships”, says the president of the Association of Portuguese Freight Transporters (APAT), António Nabo Martins.
This increase is also being seen for air transport, with prices tripling on some routes.
Nabo Martins says that this increase is down to the “complete disruption in the logistics chain and the way it has piled up and has resulted in a lack of shipping containers and drivers, as well as congestion as the world’s main ports, and the increase in the cost of fuel. The impact is likely to be felt in the pockets of Portuguese families with an increase in retail prices for the final consumer.
Now, during the pandemic, people are buying so many more goods that it’s boosting demand and leading to a shortage of containers, which has sent their prices surging, according to Janet Porter of Lloyd’s List.
She says they went from $1,500 for a 20-foot container and $2,800 for a 40-footer in late 2019, up to $3,000/$5,800 in 2020. Now they are about $4,000/$6,400, but she has seen spot deliveries go as high as $6,000/$8,000. She expects that the prices will drop once the supply chain crisis ebbs.
“The reason there’s a shortage is because a lot of them are stuck on ships that are waiting outside ports because of this supply chain crisis,” Porter says. And not only does that cause delays for businesses waiting for goods and parts to arrive, but she adds that “those containers can’t be moved back to where they’re needed”.
The shipping containers can’t be unloaded at the docks fast enough to be sent back to Asia, where they’ll be used again to help meet consumer demand.
China, the world’s largest manufacturer of shipping containers, is trying to pick up slack — companies there produced 300,000 containers in September alone, Reuters reported.
But no matter how many there are, the supply chain crisis won’t be solved until the containers are more quickly unloaded and turned around.