Container Freight Rates Spike to New Extremes, Up 500% for Asia-U.S., Asia-E.U. Since Early 2020. Worse Still Ahead.

by Wolf Richter
Wolf Street

“Turns out it’s a heck of a lot easier to create demand than it is to bring supply up to snuff”: Jerome Powell

Amid continued reports of container shortages, shipping capacity constraints, port congestion, and blistering global-stimulus-fed demand for goods – in part the result of the Pandemic-related shift of consumer spending from services to goods – the cost of shipping those goods from Asia to Western countries has exploded to new highs.

Average port-to-port spot rates from Shanghai to Los Angeles soared from around $1,500 per 40-foot container in early 2020, and from a five-year average of $2,177, to $4,000 in September 2020, to $8,000 in June, and to $9,631 in the week ended July 8, according to Drewry Supply Chain Advisors. This would be an increase of over 500% from early 2020 (green line in the chart below).

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