Global Container Freight Price Pressure
As a Global business with factories in four Continents, import and export are a major part of our daily operations. With key manufacturing sites set up in strategic places around the globe, we are reliant on a network of freight carriers and couriers to move around Raw Material and Finished Goods both between sites and out to our customers. As the next in our series of pieces looking at upward pressure on cost base, we take a quick look at what is happening with containers and the factors impacting on cost and time.
“Container freight rates increased dramatically between July 2019 and December 2021. The year 2021 saw an especially steep increase in global freight rates, reaching a record price of over 10,800 U.S. dollars in September 2021. In November 2021, the global freight rate index stood at about 9,300 U.S. dollars” (The Guardian)
According to the survey of 650 manufacturers, which is tracked by the government and the Bank of England for early warning signs from the economy, inflows of new work from overseas dropped for the fourth month in a row.
While firms reported continued growth at the end of last year and a slight easing of supply chain delays, manufacturers said logistics issues, Brexit difficulties and the possibility of further pandemic restrictions at home and overseas had damaged export demand at the end of the year.
New trade restrictions since leaving the EU and the impact of the pandemic mean that Britain’s exporters are on track to be the slowest among big European economies to recover from Covid-19, according to research by Euler Hermes.”
It is plain to see that the manufacturing industry and process itself has taken a beating in the past few years. Not to mention importing the goods have become more difficult once we have got the materials in and made them. It is coming from every angle but considering this, we are still a growing & successful industry.
What is causing the rise of freight rates?
The Global Supply change requires several factors to be in place all at once for it to efficiently work without issues. Naturally, with the COVID-19 pandemic, general inflation & post-brexit way of life, this has severally disrupted the chain. There have been all sorts of chaos, such as port closures from coronavirus outbreaks, congestion delays and shortages of labour, not to mention shortage of new shipping containers! All these things mean everything slows down, goods take longer to arrive and consequently everything costs more! It isn’t all doom and gloom as the supply chain is still moving, but with changes and not without its difficulties.
Global Container Freight Index | Credit Statista