A GIANT SHIP wedged across the Suez canal, record-breaking shipping rates, armadas of vessels waiting outside ports, covid-induced shutdowns: container shipping has rarely been as dramatic as it has in 2021. The average cost of shipping a standard large container (a 40-foot-equivalent unit, or FEU) has surpassed $10,000, some four times higher than a year ago (see chart). The spot price for sending such a box from Shanghai to New York, which in 2019 would have been around $2,500, is now nearer $15,000. Securing a late booking on the busiest route, from China to the west coast of America, could cost $20,000.
In response, some companies are resorting to desperate measures. Peloton, a maker of pricey exercise bikes, is switching to air freight. But costs are also sky-high as capacity, half of it usually provided in the holds of passenger jets, is constrained by curbs on international flights. Home Depot and Walmart, two American retailers, have chartered ships directly. Pressing inappropriate vessels into service has proved near-calamitous. An attempt in July to carry containers on a bulk carrier, which generally carts coal or iron ore, was hastily abandoned when the load shifted, forcing a return to port. More containers are travelling across Asia by train. Some are even reportedly being trucked from China to Europe then shipped across the Atlantic to avoid clogged Chinese ports.
Trains, planes and lorries can only do so much, especially when it comes to shifting goods halfway around the planet. Container ships lug around a quarter of the world’s traded goods by volume and three-fifths by value. The choice is often between paying up and suffering delays, or not importing at all. Globally 8m TEUS (20-foot-equivalent units) are in port or waiting to be unloaded, up by 10% year-on-year. At the end of August over 40 container ships were anchored off Los Angeles and Long Beach. These serve as car parks for containers, says Eleanor Hadland of Drewry, a shipping consultancy, in order to avoid clogging ports that in turn lack trains or lorries to shift goods to warehouses that are already full. The “pinch point”, she adds, “is the entire chain”.