Transportation costs from China. Why are they so high?

Transportation costs from China. Why are they so high?

The rising transportation costs from China are increasing more and more. Curious about the causes?

Chinese New Year

The period around Chinese New Year is almost over. The factories will slowly start up again. However, this does not work as it does in the Netherlands. Not everyone starts working again after two weeks. One producer is closed for two weeks, another for four. Employees also come and go at different times. This causes delays in production.

Shortage of containers in China

There are also other issues that could cause delays. Namely, we are dealing with a remarkable situation surrounding transportation from China. As a result, transportation costs are rising to record highs. One of the reasons for this is a hefty increase in Chinese exports. This while imports remain the same or even decline due to the European lockdown. This causes about 3 sea containers to be exported at the moment. One of these actually enters the country. This creates a huge shortage of containers in Asia.

Sending containers back empty costs a lot of money. Therefore, this is only done sporadically. In addition, boats had already been taken out of service before the rush occurred. Shipping companies have been able to earn little in recent years. Currently, they see the opportunity to improve their margins. The fewer boats there are, the tighter the capacity and the higher the transportation costs.

Little air traffic

On top of that, there is little air traffic and the trains from Asia to Europe are fully booked. So there are hardly any alternatives. The air freight that is still sent is also sent at sky-high rates.

Transportation costs will not fall for the time being

Unfortunately, no major price reductions are expected in the short term. It will stabilize somewhat, but remains very high compared to previous years. Perhaps this will continue until the Corona crisis is under control.

Of course, we will do everything we can to continue to negotiate the best conditions for you and to ensure that your items can be delivered at the agreed time. If you have any questions, you can always get in touch with your contact person.