The cost of shipping goods from China to Western countries is spiking due to a confluence of factors. This surge in ocean freight rates is creating a challenging situation for exporters.
The Shanghai Containerized Freight Index (SCFI), a key indicator of shipping rates, has reached record highs in 2024. This increase is attributed to a significant rise in demand as economies recover from the pandemic. Additionally, disruptions like the ongoing crisis in the Red Sea are causing delays and forcing cargo ships to take longer routes, further straining capacity and driving up costs.
Exporters are caught in a difficult situation. The holiday season typically brings a surge in demand for goods, and businesses are rushing to get their products shipped. However, the high freight rates combined with potential delays pose significant challenges for profitability and timely deliveries.
Source: Logistics Insider