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3-Minute Market Insight

EP 697 | AIRED 07/01/2024

China Freight: Rising Costs, Shipping Delays, Rates Forecast, and Market Impacts

July 1st, 2024 - Freight rates have surged significantly in recent months, increasing by 45-65% compared to March, with rates to some ports having doubled. For instance, freight to Los Angeles has jumped from $3,500 to $7,700, and to Boston and Chicago, rates are expected to exceed $10,000 by July. Freight to Toronto has already reached $10,000.

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The main factors driving up freight rates include port congestion, a shortage of containers and vessels, and a crisis in the Red Sea area.

Additionally, many vessels have been booked by Chinese EV companies for shipping to Mexico and Brazil, further straining the supply.

This rush is anticipated to complete by July, which may ease some pressure on freight rates.

China Freight: Rising Costs, Shipping Delays, Rates Forecast, and Market Impacts

Predicting future rates is challenging, but there is hope they may soften from August before rising again from October to January 2025.

However, the exact timeline remains uncertain.

These rising freight costs will impact the seafood market significantly. Seafood plants are likely to ship fewer products unless customers share the freight costs, leading to higher prices for end consumers.

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Additionally, ports in Asia, including Singapore, are heavily congested due to a rush of Chinese exports ahead of new U.S. tariffs on Chinese imports.

This congestion exacerbates delays and higher freight rates, affecting manufacturing and e-commerce sectors.

The new U.S. tariffs, starting on various dates from August 2024 to January 2026, target a range of products, including electric vehicles, semiconductors, and medical products.

China Freight: Rising Costs, Shipping Delays, Rates Forecast, and Market Impacts

Buyers should anticipate higher shipping costs and potential delays, which will likely lead to increased prices for end consumers.

Our recommendation to seafood buyers and industry is to ship as soon as possible. Strategic planning and potential cost-sharing arrangements will be crucial to navigating these changes.

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