Breathe in the Fresh Falling Freight Rates of Shipping from China

 In China, Global Business, International Shipping

Businesspeople who import from China can breathe easier than a year ago. No, this article is not about air pollution getting better in Asia. That’s still bad. It’s about freight rates and container shipping costs from China. The cost of shipping from China has been dramatically falling. While that may not be good for carriers, it’s great for those of you who import goods from China.

A little over a year ago, Universal Cargo Management’s own CEO, Devin Burke posted a blog thatLast Year's 40' Price Increase could have knocked the wind out of anyone thinking of importing from China. It reported a 350% increase in freight rates and container shipping costs.

It’s not hard to imagine how this kind of cost increase would affect a business’ bottom line.

The graph on the left shows how much costs for importing 40′ containers from China to the U.S. increased last year.

40′ containers are just one example of the price increase trends of a year ago.

These price increase trends had businesspeople who import from China gasping for air.

Now those same businesspeople can take in a deep breath and let out a sigh of relief.

Freight rates for shipping from China have not only stopped going up, they have been falling.

This Year's 40' Price DecreaseThe graph on the right displays the change in rates for 40′ containers from last year to now and demonstrates the current trends of decrease in freight rates from China to the U.S.

While prices have not fallen as low as they were two years ago, as you can see from the graph, current pricing trends from China to the U.S. are the opposite of what they were a year ago.

Now is a great time to import from China to the U.S.

Of course, this news is not good for everyone. According to a Reuters article, China COSCO reported a larger than expected loss for the first half of the year and this loss was largely due to the downward trend in freight rates.

Don’t worry about those big carriers like COSCO. Carriers have ways of increasing prices such as docking fleets of cargo vessels to affect the industry’s proportions of supply verses demand. There’s no doubt they have strategies in line to change the current trends.

If you put the graphs of this year’s and last year’s trends side by side, it resembles a rollercoaster. That’s no surprise as freight rates tend to rise and dip in the highly volatile industry of international shipping.

Whatever future trends come, it is nice to take advantage of prices when they’re down. Like Grandpappy says, “Get while the gettin’s good!”

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