Shipping prices from Asia to the USA continues to rise. Prices this week have risen over 6% to an average of $4,978 per Forty Foot Container. Prices along the East Coast of the USA are hitting highs which have never been seen before.
The reason for this is due to congestion along the West Coast of the USA, this is causing price increases everywhere else in the states as shippers seek alternatives to the West Coast.
Prices are expected to increase by $600 in March and a further possible increase is on the cards for April.
Meanwhile, prices of Asia to Europe shipping are continuing its downward spiral. The annual Chinese holidays rush has been able to influence the deteriorating prices. Average prices for a twenty foot container are at $1,057 with is almost a 10% reduction on previous prices. The question is how low this price can go.
The drop in the price of oil is a partial factor. The fuel surcharge prices called BAF has been reduced by half to under $300 per Twenty Foot Container. This shows that the shippers are passing on the benefits of reduced fuel prices to their customers.
Shipping companies have price agreements with their carriers which should prevent the carriers from increasing their rates this year. Hapag-Lloyd for instance recently announced that from the 1st of March they will be seeking a price of $850 for Japan-Europe Freight. The use of these agreements should ensure a stablished shipping rate.
As shippers focus on moving containers instead of reducing shipping space, there is talk in the market that the shipping per Twenty Foot Container could fall to below $300.
So how does this affect the everyday importer of products? Well it means that fixed contact rates with freight companies will of little benefit as the price continues to fall.
**Europe – Tip** It might be a good idea to focus on spot prices for the following months.
**USA – Tip** It might be a good idea to seek contract rates for the following months.