The freight rates on the US line have been raised by 6 yuan/KG across the board, and sellers received a price increase notice in the middle of the night!

The ocean freight prices dropped sharply some time ago, but many sellers had not yet had time to ship their goods, and the prices rose again. Some people joked that the freight rates rose too fast, like a tornado.

Freight rates change very quickly. Many people have not yet recovered from the rapid drop in ocean freight rates before the National Day. In just ten days, it has risen again. Especially the freight rates on the US route have risen particularly fast.

Port congestion is one of the reasons for the high freight rates. Recently, due to the surge in peak season demand, the US supply chain crisis has become more prominent. To solve this problem, Biden requires ports to operate 24 hours a day, 7 days a week. In this case, the congestion problem may be alleviated to a certain extent.

Shipping prices rebounded rapidly, and sellers received price increase notices in the middle of the night

Freight rates have been soaring this year. We originally thought that they would not fall this year. However, the "power outage" before the National Day not only put a sudden brake on the rising momentum of sea freight rates, but also caused prices to plummet. In just a few days, the quotation of the Matsun channel dropped from the original price of nearly 30 to 10.

However, the price reduction came and went quickly. Many sellers reported that after the National Day holiday, the shipping prices rose again.

A seller said that he received a notice from the freight forwarder in the middle of the night saying that the freight rates had returned to 22, 23, and 24.

Another seller who just shipped 500 kilograms of goods also said that the price of Meisen has increased by 3-4 yuan this week.

Some sellers even said helplessly that the shipping cost to the US has risen to 28 per kilogram.

Seeing the freight rates changing so rapidly, some people joked that the price increase was too fast, like a tornado.

Shocked by the rapid rebound in freight rates, many sellers began to regret not shipping more goods when prices fell. "Last week, it was really cheap, but unfortunately I didn't ship much. Now the price has suddenly risen, which really caught me off guard," one seller regretted.

Some sellers are worried about their hair loss again. "Shipping costs have increased, sales are low, and I can't even make back the advertising costs. I really can't sleep at night. I'm worried about my hair falling out!"

Some sellers also complained that this year's shipping costs are like robbing money. People with unstable mentality want to change careers at any moment after seeing the speed of increase.

But for sellers, the impact of out-of-stock during the peak season is too great, so even if the price rises again, they still have to ship. However, some sellers said that all the goods for Christmas this year are shipped by sea, but the freight is too expensive, and there is not much point in restocking by air at a high price later, and there is not much room for price increase, so they plan to stop shipping until early November.

It is obvious from the above that after the National Day holiday, the wave of price increases hits sellers again. So how much is the specific increase? A "dedicated logistics person" said that after the National Day, the sellers' expectations of post-holiday freight price reductions were not only dashed, but the prices of the US route were also raised by 6 yuan/KG across the board, and some prices of Africa and South America were raised by 10 yuan/KG. At the same time, he also lamented that for more than 21 kilograms, ordinary express delivery to commercial addresses in the United States has reached 70 yuan/KG, and it is expected to reach 80 yuan/KG by November, which is equivalent to a sky-high price.

Not only that, some logistics companies said that prices will continue to rise next week, with the starting price at 28+ and the cost of getting a container reaching 40,000+.

The freight rates driven by the epidemic have been rising all the way, and many people have analyzed that even if the epidemic is over, freight rates will not return to their previous levels. Some logistics groups have already announced freight rate increases for next year.

On October 13, DHL announced that its shipping rates in the United States will increase from January 1, 2022. The average shipping cost per package will increase by 5.9% . At the same time, optional services and surcharges will also increase. The specific prices will vary by region.

As early as last month , FedEx announced that starting from January 3, 2022, freight rates will increase by an average of 5.9% , affecting FedEx's delivery services in the United States and internationally, including FedEx Express, FedEx Ground and FedEx Freight.

Although UPS has not yet announced its freight rate adjustment plan for 2022, past data shows that UPS's annual freight rate increase is similar to that of FedEx.

We know that one of the factors that push up freight rates is "port congestion." Supply chain shortages have been affecting the United States for a long time, and now that the holiday season is here, the crisis in this regard is even more obvious. In this situation, Biden couldn't help but take action and required ports to operate 24 hours a day, 7 days a week. Is this the rhythm of easing congestion?

Biden orders ports to work 24 hours a day, will congestion be alleviated?

Due to the continued impact of the epidemic, the supply chain crisis has intensified. CNN reported on the 10th that recently, shopping malls, supermarkets, and grocery stores in many parts of the United States have experienced shortages of various commodities, including food, beverages, clothing, and daily necessities.

Many supermarket shelves are empty or have only a few items for customers to choose from. Some stores said they were "uncertain when they can restock." Even some large supermarket chains have begun to resume the "purchase restrictions" measures at the beginning of the outbreak in the United States, limiting the amount of daily necessities such as toilet paper that customers can buy.

In a report on the 14th, the American Broadcasting Corporation and the British Reuters warned that if the US supply chain problems are not properly resolved before the traditional holidays at the end of this year, not only will the backlog of goods continue to cause price increases and suppress people's consumption behavior, but it will also damage the interests of various industries in the United States.

Supply chain issues stem from containers and unloading ships piling up at ports, as well as a lack of truck drivers to deliver the products.

The owner of a toy company in California said they also tried to fulfill some orders, but their products were stuck at the Port of Long Beach. Gene Seroka, executive director of the Port of Los Angeles, said: "The congestion is like squeezing 10 lanes of the highway into five lanes."

As port congestion continues to worsen, on October 12, the heads of seven major ports, including the Port of Long Beach, the Port of Los Angeles, the Port of Oakland, the Northwest Seaport Alliance, the Port of New York/New Jersey, the Port of Virginia, and the Georgia Ports Authority, jointly wrote a letter to the Biden administration, urging the government to find ways to incentivize importers and their transportation suppliers to extend port opening hours, and even use defense funds to fund these initiatives.

The letter noted that financial subsidies could incentivize shippers and truckers to use gates that are open at night and on weekends, and reimburse port authorities for costs associated with temporary container loading and unloading operations.

Biden obviously understands the seriousness of the situation. In order to resolve the current crisis, he held a meeting on the 13th with executives from FedEx, UPS, Walmart, and the heads of the Ports of Los Angeles and Long Beach.

The first measure he announced was that the ports would work 24/7, starting with the Port of Los Angeles, one of the most congested ports. (The Port of Long Beach has already taken this approach in September.)

“This is a critical first step toward 24/7 operations across the entire freight and logistics supply chain across the country,” Biden said.

In addition, logistics companies and large retailers such as Walmart and FedEx have also announced that they will extend their working hours and move towards round-the-clock operations.

According to the American Association of Port Authorities, although the Biden administration is helping port operations and commercial trucking, they said it would not help get the supply chain fully back on track until at least mid-2022. However, as the two busiest ports in the United States, the Port of Los Angeles and the Port of Long Beach account for about 40% of the country's import containers. If their working hours are extended and the operation speed is accelerated, it will definitely be good news for easing port congestion, which will also have a certain impact on freight rates.

Ocean Freight Prices