China-US shipping rates begin to cool as power crisis forces production cuts, but freight costs still elevated

The spot rate for shipping a 40-foot container from China to Los Angeles has dropped about 51 per cent from US$17,500 last month to US$8,500

Shipping costs between Asia and the US also dropped 16 per cent last week, marking the first significant dip since August, according to Freightos

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Surging prices for containers and congestion at ports around the world has driven shipping rates sky-high over the past year. Photo: Reuters

Published: 12:30am, 9 Oct 2021Updated: 5:12am, 9 Oct 2021

The cost of shipping between China and the United States has fallen after months of steep increases, as orders for year-end holidays slow and a power crunch in the world’s second biggest economy disrupts production of goods, new data shows.

Though prices are still far higher than this time last year, costs for shipping containers have fallen by more than 51 per cent on some routes between September and October, according to freight forwarding platform Shifl.

The spot rate for shipping a 40-foot container from China to Los Angeles has dropped from a high of US$17,500 last month to US$8,500, while rates to the east coast of the US have tumbled 28.2 per cent over the past month to US$14,000 per container.

“These rates could go even lower. We’re already seeing long-term rates for shipping 40-foot containers from China to the US go below US$5,000,” said Shabsie Levy, founder and CEO of Shifl.

The Freightos Baltic Index also showed shipping costs between Asia and both coasts of the US dropped 16 per cent last week, marking the first significant dip since August, though this week transpacific ocean rates remained largely unchanged.

Surging prices for containers and congestion at ports around the world has driven shipping rates sky high over the past year, causing major headaches for Chinese exporters, who are also struggling with high raw material prices. Many smaller producers of low-value goods have started cutting back on production and turning away orders to preserve their margins.

China-US shipping rates begin to cool as power crisis forces production cuts, but freight costs still elevated

The spot rate for shipping a 40-foot container from China to Los Angeles has dropped about 51 per cent from US$17,500 last month to US$8,500 Shipping costs between Asia and the US also dropped 16 per cent last week, marking the first significant dip since August, according to Freightos

The spot rate for shipping a 40-foot container from China to Los Angeles has dropped about 51 per cent from US$17,500 last month to US$8,500

Shipping costs between Asia and the US also dropped 16 per cent last week, marking the first significant dip since August, according to Freightos