How The Rise In Shipping And Container Costs From China Could Be Affecting Your Wallet?

The cost of importing products from China to the rest of the world has skyrocketed at exponential levels, which means increases in all products from the Asian country. 

“If you used to pay US $ 2,000 to move a container from China to the west coast of the United States, now you have to pay US $ 20,000,” explains Teddy Heinsen, president of the Association of Shipowners of the Dominican Republic in an interview for BBC News.

This unimaginable increase in maritime freight is due to the so-called “container crisis”, explained as a low production of available space to transport products from Asia to the West, together with delays in most international ports and temporary closures of some maritime terminals in china, due to the biosecurity regulations decreed by the government of this country to control the covid-19 pandemic.

“There are not enough ships, there are not enough containers, and there are too many delays at the ports to get in and out. This affects the logistics chain ”, Heinsen points out.

The detriment in ships and containers is not enough now that the international economy has begun to recover and consumers in different countries want more products, rising demand that the global shipping system cannot satisfy, a demand that will increase as the Christmas and New Years holidays arrive.

“Most importers are doing their Christmas shopping right now,” he adds. But because the situation is so challenging, “it is very likely that there is a shortage of Christmas products because they will not arrive in time.”

Carlos Restaino, executive director of the Argentine Association of Toy Companies, explains to BBC Mundo that “It is not just toys, it is a general problem, the price of a container from China to Argentina has doubled but the fear of importers is that at the end of the year the value rises three or four times “

“No sabemos cómo esto puede afectar el precio que pagarán los consumidores, pero es probable que algunos juguetes no estén disponibles” le dice Restaino a la BBC Mundo.

It also confirms that there are Chinese companies that are manufacturing less due to the restrictions associated with the pandemic, since when there are outbreaks in certain places, production is forced to stop, which generates delays in delivery times, so, every time they close a port, an importer will be running out of merchandise.

The Increase In Prices

Data from Drewry Shipping, a firm that monitors ocean freight prices, explains that the cost of shipping a 40-foot container on eight of the main East-West routes reached US $ 9,613, an increase of 360% compared to last year. 

The largest price increase occurred on the sea route linking Shanghai and Rotterdam in the Netherlands, where the cost rose 659%.

For Latin America the situation varies by country, the cost of shipping a container between Shanghai and South America before the pandemic was approximately US $ 2,000, now it has risen to more than US $ 7,000, according to estimates made by the Bank Inter-American Development Bank, IDB. 

This increase in prices may cause small businesses to close their doors in critical cases, meanwhile, many merchants anticipate the purchase of Christmas merchandise to help face this situation. 

The final cost will be evidenced in the rise in product prices, that is to say that it will be the final consumer who will have to suffer these costs due to the lack of space and containers in Asia.

Info taken from: BBC Mundo

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