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Transport and logistics
BusinessChina Business

Shipping container rates from China jump to 2-year high as panic sets in amid US tariff threat, Red Sea disruptions

  • The Shanghai Containerized Freight Index jumped 12.6 per cent last week to 3,044.77, breaking the 3,000-level for the first time since August 2022
  • The cost of shipping a 20-foot container from Shanghai to Europe is over US$7,000, an increase of about US$1,000 from a month ago, shipping executive says

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A cargo ship loaded with containers leaves Lianyungang port in China’s eastern Jiangsu province in July last year. Photo: AFP
Daniel Renin Shanghai

Ocean freight rates from China are once again surging as exporters front-load shipments for the holiday season battered by worries about US tariff increases and prolonged Red Sea disruptions.

The Shanghai Containerized Freight Index, a gauge of container shipping rates compiled by the Shanghai Shipping Exchange, climbed 12.6 per cent to 3,044.77 last week. It was the first time since August 2022 that the indicator, which is published on a weekly basis, broke through the 3,000-point level.

The growth momentum is set to continue as more exporters book slots on vessels bound for the US and Europe to execute orders, freight forwarders said.

“Shippers could be facing months of very elevated rates and increased delays as higher demand combines with restricted capacity,” Judah Levine, head of research at Freightos, a global freight booking platform, said in a research note. “But the duration and scale of these disruptions and price spikes could be less severe than those unprecedented impacts seen during the pandemic.”

There is a shortage of empty shipping containers amid rising demand from exporters, industry executive says. Photo: AFP
There is a shortage of empty shipping containers amid rising demand from exporters, industry executive says. Photo: AFP
Chinese exporters, from garment makers to manufacturers of toys and festive lights, normally start shipping goods ordered by Western buyers for Christmas and the new year from July. This year exporters started to panic after US President Joe Biden announced in May that Washington will slap punitive tariffs on US$18 billion of Chinese goods including electric vehicles, battery parts and solar cells.

The additional tariffs have not yet come into effect.

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