It will be interesting to see if this settles back in near the pre Covid rates or whether it enters a phase of bouncing volatility like many of the commodities.
Thank you @David_Bagdy and @Bill_D
@David_Stallcop @Craig_Parker what do you think about this topic?
@Matt_Layman @Matthew_da_Silva
Hello @Nadia. I have been fairly silent as of late since I have been traveling so much internationally. I am home for a week and then I fly out next Saturday for Europe again and at the end of a the trip, I have a chance to don my Lederhosen at Octoberfest in Munich after a 2 year break due to Covid! It is true that for certain routes the container rates are getting back to more “normal” levels. However container rates from Europe to the US East Coats are still 25% more expensive than breakbulk, plus you have to pay a port warehouse facility $800~$1200 to strip the container. So, that makes shipping from Europe to the US East Coast via container nearly 35% more expensive than breakbulk shipments. This is one of the reasons why all of the breakbulk ports are full and congested. All except for Lake Charles Louisiana which will most likely start getting more attention from carriers in the coming months. “China to US rates at $4300”, I have not personally seen yet. But the downward trend is definitely good news for importers from that region. Many US owned companies who had manufacturing in China, shut it down and moved all of their equipment to Mexico in the past few years as spot market container rates were as high as $22,500 from China to the US and extreme Covid shutdowns in China further forced companies to move to where there was less Covid related regulation and much lower freight costs to get their products to the US. Many Chinese owned factories have also moved their manufacturing to Mexico to get around US tariffs on Chinese made products. The extremely high container rates that we saw over the past few years plus extreme Covid restrictions have completely changed the global supply chain to the US and I don’t see a lot of that business going back to China anytime soon if alternative routes were developed.
Click here to read the Bloomberg article on Chinese firms setting up shop in Mexico
