Chinese shippers face abyss as freight rates plummet 60 per cent from ‘unprecedented’ highs at height of coronavirus pandemic

Windfall brought by the Covid-19 pandemic ‘is history’, Shanghai-based shipping agent says

Shippers are currently charging 60 per cent less to transport a 40-foot equivalent container to the US’ west coast, compared with the beginning of this year, according to data from Freightos

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Shanghai’s Yangshan Deep-Water Port. The city’s two-month citywide lockdown has also affected supply and demand for shipping. Photo: Xinhua

Published: 2:00pm, 9 Sep 2022Updated: 2:10pm, 9 Sep 2022

China’s shipping industry has reported a 60 per cent drop in freight rates, as congestion linked to Covid-19 eases globally and the country’s foreign trade slows down.

The decline was seen between January this year and now, and is expected to continue in the coming months, affecting shippers’ bottom lines.

“The windfall at shipping companies brought by the Covid-19 pandemic is history,” said Lu Ming, an agent with Shanghai Ocean Shipping Agency. “The high shipping rates arising from the disruption in supply and demand created by the pandemic will never come back.”

Shippers are currently charging US$4,797 to transport a 40-foot equivalent container to the US’s west coast, down about 60 per cent from the beginning of this year, according to data from Freightos, a global freight booking platform.

Shipping companies in Shanghai benefited from stringent coronavirus controls around the world following the pandemic’s outbreak in early 2020. In mid-2020, a severe shortage of containers propelled ocean freight rates to an elevated level, which could be as high as five times normal rates, as exporters rushed to ship their goods and execute overseas orders.