Why Ocean Freight Rates increasing recently?
1. Red Sea Capacity Absorption: Although there have been significant new-build vessels entering the market, the ongoing disruptions in the Red Sea have absorbed a substantial portion of global shipping capacity. The ongoing conflict is forcing carriers to divert away from the Suez Canal to go down around the Cape of Good Hope on the southern tip of Africa. This removes capacity from the market by significantly extending transit time on each leg of a vessel's voyage. Overall, diversions are removing 9% of global capacity year-over-year2, while according to the latest Drewry Container Forecaster report, new-builds are only adding 8%, creating a persistent deficit that strains overall capacity., creating a persistent deficit that strains overall capacity.
2. Unexpected Demand: Due to increased demand for eCommerce shipments, restocking of inventories, and other factors, Transpacific East Bound (TPEB) and Asia –Europe trade lanes are experiencing demand levels far exceeding original forecasts3. This sudden increase has caught the industry off guard, creating a scramble for available shipping space.
3. Strike Threats: Potential strikes by the International Longshoremen's Association (ILA) in North America4 and Canadian rail workers5 have prompted many shippers to expedite their shipments, fearing disruptions.
What will affect to our business?
As the ocean carriers are in the ‘driving seat’, they do not foresee any short term rectification of the current market conditions which will undoubtedly continue to charge us more unexpected money to pay the havoc with supply chains.
If your order was placed already, we will remain the SAME price and SAME quality just like what we did done always, T&B will take care of all of the EXTRA charge. If you ready to place an order, the price maybe a little bit difference as what we quoted before, please contact with your sales representative directly to make sure everything is good to go.
T&B Kindly reminder : please Consider alternative shipping methods ( FedEx/UPS) for time-sensitive products.
We will continue to keep an eyes on the evolving situation, we will offer our customers the best quotes/options available, being creative with the solutions that we may offer – based on customer requirements – ensuring we always offer the best pricing / quality and deliver against deadlines.
Best Regards,
T&B shipping Team