This Week's Top Stories About Shipping Costs
This Week's Top Stories About Shipping Costs
2021-06-11

Ocean freight is currently a mess! When the Ever Given megaship blocked traffic in the Suez Canal for almost a week in March, it triggered a new surge in ocean freight rates. It now appears that this is just the beginning.
Shanghai Ocean freight fee in May

Ocean freight rates have a particular impact on global trade because about 80% of the goods we consume are carried by ships. Alucoworld collects several recently frequently asked questions from our customers and the corresponding answers.
Many ocean shipments are delayed

1. Why are Ocean Freight Rates So High?

No standard answer. In our opinion, the impact of COVID-19 cannot be ignored. Health issues and lockdown restrictions caused the market to depend heavily on ecommerce. According to a McKinsey survey, as lockdowns have eased up and vaccines are rolling out, these savings translate to pent-up demand waiting to be unleashed in what we can call revenge shopping. But the increased demand for certain goods comes with a price, that price being soaring ocean freight costs.
Why Ocean Freight Rates So High?

2. When Will It Normalize?

Alucoworld has questioned a lot of information in order to get an official and credible answer. Unfortunately, it seems that "yesterday" was the day of normalization.

Some reports say that a less volatile freight market is possible but there are factors that suggest rates will remain higher for some time. Another obvious problem is delivery delays and congestion, especially in the China-Europe supply chain.

Others say this situation may last for 1-2 years.
When Will ocean freight Normalize?

3. What Should I Do to Protect My Business Now?

Alucoworld has some suggestions you can take to protect your business.

1) Plan your shipment as soon as possible

With soaring freight costs and unpredictable delivery delay and congestion, it is more important than ever to consider booking your cargo ASAP. Maybe it could save some money.

2) Cooperate with reliable freight forwarders

Be sure to work with a reliable freight company to reduce the bottlenecks, complexity and costs associated with recent price spikes in transportation.

3) Choose the most appropriate solution

Due to shortage of 40ft counters, the price gap between 20ft and 40ft container is further widening.

Take aluminum composite panel as an example, one 20ft container can load 6000㎡ of 3mm aluminum composite panels or 4500㎡ of 4mm aluminum composite panels. The loading weight of 40ft container is same as 20ft container, but 40ft container freight fee is much higher than 20ft container. 20ft container in fact is becoming a more viable option for your order.
20ft container freight fee is much lower than 40ft container
Check out the video below:

Understanding why ocean freight has become more expensive and complex will help you prepare and plan out your procurement more effectively.

We are all in the same boat at all times.

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