Tumultuous Time For Container Shipping

Recent shipping rates have skyrocketed as much as 187% over equivalent China - US West Coast shipments from the previous year, and as much as 84% over China - US East Coast shipments.

There are several contributing factors that could explain the rise:

• Alternate shipping patterns/routes created during COVID lockdowns have not fully shifted to their previous ports/routes, creating an under-supply of container ships at larger ports
• Production and shipping delays caused by COVID shutdowns, along bumps in ecommerce sales have created some backlog in containers leaving China

As a result:

• China officials have requested that cancelled sailings be restored and pressured state-owned carriers reinstate their blanked sailings
• Maersk & Hapag-Lloyd have added or restored capacity
• Carriers have cancelled or reduced their scheduled September rate increases

Also consider:

• There was likely a bump in demand leading up to China's Golden Week holiday
• Some vessels were held at ports in China or rerouted due to China's military activities in the South China Sea

The prospects for future volumes and activity remain mixed. Predictions vary from strong stable volumes for the remainder of the year, to steady declines for the remainder of 2020.