If you’re shipping goods to Asia, this is an important article for you to read. At Smart Directions, we’re keen on keeping our customers up to date with changing markets and impacts on the global supply chain. We have an ear to the ground, and this update is no different.
Asia, What’s the word hummingbird?
Ocean freight costs are rising faster than the global sea level. Maybe that’s a bit dramatic, but we are being made aware of a significant increase in cost to ship goods in and out of Asia.
This news hits particularly hard, especially as rates for the crossing had plummeted just 6 months ago. The conflict in the Red Sea routed ships away from the area, leading to a price reduction and plenty of space for shipments at short notice.
The prolonged diversion has now had a long-term impact…something we expect to see take effect from the month of November.
The projected price increases are certainly very unwelcome now that we approach the busiest time of the year.
How have things changed in the last 6 months?
It’s becoming quite a substantial problem, and there are plenty of carriers passing on these rising costs through the supply chain. We’re seeing port congestion, longer journey times and more vessels needed in the water to cope with the demand. In fact, it’s been reported that “carriers needed to add 2-3 extra vessels, and probably 25-40,000 more containers to every single service loop, just to maintain weekly schedules.”
The reports suggest that there hasn’t been enough capacity or equipment available, and demand now begins to outweigh availability. Every voyage to and from Asia now costs an estimated $1 million in extra fuel. With limited access to the Red Sea route, and no clear intention on when we can expect passage to resume, it’s probable that rates will continue to increase.
Could this be an early peak season boom?
This is a possibility. Christmas is just around the corner and crossings now take longer from start to finish. So it’s possible that carriers are anticipating a backlog, and are working hard to get freight to consumers as quickly as possible to mitigate other unforeseen delays.
What can you do to keep business moving?
At Smart Directions, we like to offer bespoke solutions across various transport routes, and using a variety of transported methods. We advise customers to get in touch with their concerns about requirements so that we can discuss potential contingencies and alternatives. With over 40 years of experience, we’re able to help you to safely navigate these price rises and keep up with demand. If you’d like to find out more, fill in a contact form or call us directly on 01442 507240