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Editor's Note: Below is a brief excerpt from a complimentary research note written by our Consumables analysts Howard Penney and Daniel Biolsi. Check out Consumables Pro for more information. |
Shenzhen reopened after a week-long lockdown on Monday with most businesses and factories resuming work, but part of the central business district remains closed.
Shenzhen is China’s second-highest port in foreign trade by volume. Container prices have fallen 8% in the past two weeks as China locked down several cities in order to contain COVID-19 outbreaks.
In the last week of February, the rate to transport containers from Asia to the West Coast was 179% higher YOY according to Freightos. Rates are four times greater than historical averages reaching $14,000 to $16,000 per container.
Port delays, backlogs, and supply chain tie-ups all contributed to increased use of the spot market for truck shipments. Rates soared in 2021, but not because volumes increased significantly.
2021 showed how interconnected the supply chain is and how problems in one industry could lead to problems in other unrelated industries.
The rollover in shipping rates could indicate improving conditions for other parts of the supply chain.
