Ocean Freight Increases

Ocean freight has risen sharply and it is predicted it will stay in the same position this year. It has been increasing since the autumn of 2020. The prices now have been tripled compared to last year’s rates. Also, charter prices of the vessels also have a similar rise in prices. The capacity of containers is limited and even if when new capacity arrives, it will take time for the freight to go back at that certain price. The pandemic has created imbalances in production and demand because countries are under lock-down which delays everything and only certain shipping routes are open. Also, on the other hand, all the goods which are delivered, have to stay in quarantine for 14 days and have to be sanitized properly. Port closure and delays cause the shortage of containers and this is the main reason for the price spike.

As most of the goods are transported through the ocean, so it has a direct impact on the prices of the goods. The importers and exporters are bearing the cost as it is the only way to survive this freight wave. Also, China is currently facing power crisis which has already resulted in price increase and delay in the production. Freight is stabled at the moment but it is predicted it is going to increase soon as the holiday shopping season is going to start all around the world. It is the best time for importing tyres as the prices and freight both are predicted to increase very soon.

Hoa Phat Group has planned to set up a container factory to meet up the global demand and they will be manufacturing 500,000 TEU containers annually. It is expected to be in the market by mid of 2020.