Shipping Costs Rise Even as Demand Drops
Although consumer demand is starting to soften, shipping prices are bolstered by container shortages and port congestion, said Lori Ann LaRocco, CNBC senior editor, during a news report. "East Coast [port] congestion has created a floor in prices at around the $9,000 range," she said. "Because congestion takes boxes out of the supply for future use."
The average wait time at the port of Savannah is up roughly 123% over the last quarter, and the ports of New York and New Jersey have implemented a $100 per container dwell fee for both loaded and empty containers, LaRocco reports. "The goal of the tariff is to reduce an excess of empty containers dwelling at the port and free up space for container pickup," she wrote in an American Shipper article.
Some trade routes are worse than others. For example, rolling labor strikes are expected to take place this month at Britain ports and rails as workers call for higher wages. "Global shippers should be prepared for volatility in the coming quarters," Peter Sand, chief shipping analyst at ocean and air freight research firm Xeneta, told CNBC. "I think patience is required, not only in terms of understanding how market dynamics constantly develop, but certainly also to realize that no two markets are alike."