Container shipping rates from Asia to the U.S. and Europe increased to new record levels over the past week, ensuring transportation costs will stay elevated for companies heading into a peak season for rebuilding inventories.
The spot rate for a 40-foot container from Shanghai to Los Angeles increased to a record $9,733, up 1% from the previous week and 236% higher than a year ago, according to the Drewry World Container Index published Thursday. The Shanghai-to-Rotterdam rate rose to $12,954. The composite index, reflecting eight major trade routes, hit $8,883, a 339% surge from a year ago.
Among the reasons for the tight market: a persistent shortage of containers along the busy transpacific lane carrying American imports. Goods in containers are flooding into the biggest U.S. gateway for seaborne trade at five times the volume of steel boxes full of exports.
“The backlog of getting containers, getting the product, getting it on the ships and just the delays in getting any of those products is significant today,” Clarence Smith, chairman and CEO of Atlanta-based Haverty Furniture Cos., said during an investor conference this week.
Asked how long he expects the supply problems to last, Smith said “I’m hearing it’s going to go into next year. I don’t see it really getting better this year, maybe a little bit better. We’re having to pay premiums to get containers.”
The Port of Los Angeles on Wednesday said loaded container imports totaled 467,763 20-foot equivalent units in June, while exports fell to 96,067—the lowest level since 2005. At Long Beach, import volume rose 18.8% to 357,101 TEUs last month, with exports dipping 0.5% to 116,947.
Combined, imports into both ports last month were up 13.3% from the same month in 2019.
Meanwhile, the number of anchored container ships waiting to discharge cargo at L.A.-Long Beach stood at 18 as of late Wednesday, compared with 20 a week earlier, according to officials who monitor harbor traffic. That bottleneck has persisted since late last year, peaking around 40 vessels in early February.
L.A. port Executive Director Gene Seroka said during a press briefing that the demand for consumer goods looks to stay solid for the rest of the year.
“Fall fashion, back-to-school items and Halloween goods are arriving on our docks, and some retailers are shipping year-end holiday products early,” Seroka said. “All signs point to a robust second half of the year.”
Long Beach Executive Director Mario Cordero said that while the port expects e-commerce to drive cargo movement through the rest of 2021, volumes might be peaking. “June serves as an indicator that consumer demand for goods will gradually level off as the national economy continues to open up and services become more widely available,” Cordero said.