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The shipping industry is experiencing the worst crisis in several decades. Over the past year, the average world cost of transporting one container has increased by 370%, on some popular destinations prices have increased by 500%.

Today shipping a 40-foot container from China to the east coast of the United States costs $ 20,000, although a month ago the price was half that.

Shipping prices have increased due to:

  • rapid recovery in demand after the global lockdown,
  • port blockades
  • and a shortage of containers.

How did the container shortage come about? After the lockdown in 2020, China was the first to recover, and transport companies carried containers from there to the United States, but did not return back. In addition, due to the quarantine, cargo in American and European ports was processed much longer than usual.

At the same time, 96% of containers are produced by Chinese companies. It is almost impossible to increase production in the future due to the shortage of steel.

Meanwhile, China’s exports rose 50% in the first quarter of 2021. Reuters notes that shipping companies have begun to openly hunt for profits, and the shipping market has become a major auction.

The crisis was deepened by the accident of the container ship Ever Green in the Suez Canal on 23 March. Six days while the ship was being floated was enough for the world economy to lose about $ 100 million.

In May, an incident occurred in the port of Shenzhen. An asymptomatic carrier of Covid-19 was found among the workers, and the Chinese policy of “zero tolerance” led to the fact that just for one patient, the whole terminal was closed for almost a month. This led to a redistribution of goods to nearby terminals. And in August, the same incident occurred in the port of Ningbo-Zhoushan.

Consequences for Ukraine

The crisis has already affected world prices for coffee, rice, sugar and a number of other goods. Although the end consumers will not feel this immediately.

For Ukraine, the increase in the cost of shipping goods by sea will primarily affect imports from China – prices for Chinese goods may grow by an average of 10%. If due to the pandemic it cost 2-4 thousand dollars to send a 40-foot container from China to Odessa, now the price has risen to 10-15 thousand.

Thus, it is possible to establish a railway route from China to Ukraine through two ferries, bypassing Russia. Previously, such a route was too expensive, but now it is quite capable of competing with the inflated prices of sea transportation. The same goes for air travel.


Source: EP

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