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A critical shortage of containers is driving up transportation costs and delays for goods sourced from China. CNBC reported this in a Jan. 24, 2021, story on its website.

Why have freight costs shot up by up to 300%? Fierce battle for containers
Why have freight costs shot up by up to 300%? Fierce battle for containers.

Companies wait weeks for containers

The pandemic and uneven global economic recovery have caused this problem to surface in Asia. Although other parts of the world are also affected. Industry observers report that desperate companies are waiting weeks for containers and paying top dollar for them, causing shipping costs to skyrocket.

This affects anyone who needs to ship goods from China, but especially e-commerce companies and consumers, who could bear the brunt of higher freight costs.

Spot freight rates up as much as 264 percent

In December, spot freight rates for the route from Asia to northern Europe were 264% higher than a year ago, according to Mirko Woitzik, risk intelligence solutions manager at supply chain risk specialist Resilience36. For the route from Asia to the U.S. West Coast, rates are up 145% from a year ago.

Freight costs from China to the U.S. up 300%

Compared to the low rates last March, freight rates from China to the U.S. and Europe are up 300%, Mark Yeager, managing director of Redwood Logistics, told CNBC. He said spot rates are up to about $6,000 per container, compared with the going rate of $1,200.

Rates from the U.S. have also increased, although not quite as dramatically, according to Yeager.

Source: cnbc.com


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