Ocean freight is typically around 90% of global trade volume. But the COVID-19 pandemic has seriously affected the logistics industry. In the past, shipping costs from Vietnam to other countries have increased dramatically.
In detail, the ocean freight from Vietnam to Miami, USA has increased triple since the same period last year, from US$ 3,200 in July 2020 to US$ 11,000 in June 2021. The cost of shipping a container from Vietnam to Le Havre has reached US$ 6,700 (Yangming transport). While rates to Southampton currently sit at US$ 6,900/container (Yangming transport).
A shortage of containers is the main driver of the rate increase. The company has to book containers at least one month before the shipping date – which is much earlier than the normal practice of one week ahead. This is a risk for the exporters since they cannot get the actual price as they book the container one month earlier. On the other hand, in April, the Suez Canal blockade held up about 300 ships, and forced others to reroute around the Cape of Good Hope. This also led to soaring freight costs. One more factor that impacts the scheduling of ships is the increasing number of Covid cases among seafarers.
We predict that it will be very difficult for ocean freight from Vietnam to decrease the cost, even for next year.
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