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17 November, 2021 Industry News

Shipping Crisis Defined by Congestion and Elevated Rates

Shipping Crisis Defined by Congestion and Elevated Rates


The latest news on the global shipping situation.


Updates on the shipping industry continue to be dominated by two major themes: congestion and prices. As of last week, there were 111 container ships all waiting to anchor at the Ports of Los Angeles and Long beach. This broke the previous record of 108 ships, reported on October 21. Starting November 16, ships coming into the Southern Californian Ports will have to anchor and wait 150 miles off the coast, in efforts to reduce ship congestion and pollution that is emitted by waiting ships.
 
Turning to ocean freight rates, Drewry’s World Container Index shows that prices remain unchanged from the previous week, and 250% higher than one year ago. Rates for Rotterdam to New York edged up 2%, while Shanghai to Los Angeles and vice versa increased 1%. The only route to show a decrease in the index was Shanghai to Genoa, which saw a 2% drop.

Combining both congestion and elevated rates, the hit on American farmers is becoming more and more evident. Due to the logjam in the Southern Californian Ports, once unloaded, ships are rushing back to Asia with empty containers in order to load up with more goods. According to Drewry, it costs around seven times more to ship goods from Shanghai to Los Angeles compared to the other way around. This significant difference in price means ships are opting to skip the smaller ports in the US, making it difficult for American farmers to get their products on boats.
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