Price increase inevitable due to persistently higher sea freight costs

The times of low container prices will not return in the coming years, despite shipping companies ordering new ships en masse. There is no escaping structural price increases.

Although the current high transport price is not sustainable in his view, container transport will remain relatively expensive, even after new ships come into service in 2023. Compared to a few years ago, the shipping companies have become much better at managing the capacity.

The extreme rate increases are mainly due to the corona pandemic. Lockdowns have severely disrupted the logistics chain. A recent example is that China closed ports due to new corona infections. Transporting a container from China to Rotterdam now costs about $12,000 compared to $2,000 more than a year ago. There are extraordinary circumstances and the high price level is expected to continue into the first quarter of 2022.

To meet future transport demand, the three leading shipping companies have ordered new vessels. However, in light of the increased demand for sea freight, there is still a long way to go about overcapacity in the fleet.

Given the whole trend of rising prices for raw materials, packaging materials, (container) transport, we as our industry will be forced to implement structural price increases.