Sea and rail container export freight rates are soaring

The medium- and long-term impact of the Red Sea crisis is already taking effect. The voyage is longer, the transportation time is longer, and the cycle of returning containers to China after export is also greatly extended. This has led to a continuous decrease in the number of containers available in the Chinese market. The normal operation of the shipping system requires more containers to be put on the market.

Yulia Shlenskaya, head of KBT, a Russian customs clearance and logistics service company, said that from May 20 to 26, most container shipping companies introduced GRI (comprehensive rate surcharge), which increased shipping freight rates by 15%-30%. Affected by the increase in shipping prices, both direct rail transport services from China and rail transport from Russia's Far East to the central and western regions have also increased in price.

A railway operator said that since May, container rail freight rates from China to Russia have risen by 10% to US$5,900-6,300/40-foot container. Among them, it is necessary to take into account the cost increase of about US$430-500 in the Kazakhstan section.

Anastasia Kizuleva, deputy general manager of Noytech Supply Chain, a shipping logistics provider, said that the shortage of containers began in April and the situation is still very serious.

Dmitry Arzhanyk, partner of SLK Group, believes that "the shortage of containers mainly occurs in the ports of Ningbo, Tianjin Xingang, Shanghai and Dalian. China can only achieve a relatively balanced flow of containers with a few markets such as France, Germany, Japan, South Korea and Vietnam."

Industry insiders pointed out that the price of renting a container has risen by 500-700 US dollars in late April and early May, reaching 1,700-2,100 US dollars depending on the region. It is expected to rise by another 500 US dollars in June.

Yulia Shlenskaya also said that in the case of insufficient supply of shipping capacity and shortage of container sources, shipping companies will launch paid "priority" services, and paying an additional 400-600 US dollars will ensure that customers get containers.