Understanding the China Shipping Costs Increase in May and June 2024

In May, Chinese sellers faced subdued order volumes while maritime prices skyrocketed. Leading shipping companies like Maersk, CMA CGM, and Hapag-Lloyd disclosed recent route rate increases, covering routes from Asia to Europe, North America, South America, and beyond.

1.Why do China Shipping Costs Increase Significantly in May and June 2024?

1) Impact of the Red Sea Crisis: European routes were significantly affected by the Red Sea crisis, forcing ships to detour around Africa. The already limited capacity on African routes saw a surge in ship numbers this year. Longer voyages and additional transshipment ports led to increased operational demands. Long journeys coupled with port congestions resulted in numerous containers being stranded, contributing to the recent container shortage in China.

2) South American Price Surge: Brazil and Mexico's plans to impose additional tariffs on Chinese electric vehicles from July led to price hikes. Many automakers rushed shipments to these regions even without actual orders. Byd, for instance, shipped over 100,000 vehicles! Electric car companies monopolized most of the shipping resources and quickly filled destination ports, leading to widespread freight increases in West Africa as shipping companies diverted vessels for these major orders.

3) Upcoming US Elections: With talks of imposing 50–60% tariffs on Chinese goods post-election, some Chinese companies increased investments in South America. In addition, many importers stock up in advance, making the peak season arrive earlier.

4) Shipping giants use the above reasons to actively and tacitly raise prices together! The nervousness and anxiety of cargo owners have also contributed to the increase in freight prices!

2.The current situation during China Shipping Costs Increase

China Shipping Costs Increase just the beginning of this crazy maritime market! Here are the challenges we're facing: Uncertainty--

• Booking a slot doesn't guarantee space allocation from the shipowner;

• Securing a shipping order doesn't ensure container availability;

• Obtaining a container doesn't guarantee boarding;

• Boarding doesn't mean avoiding container rollings;

• And if you experience rollings, it's not necessarily a one-time occurrence!

3.What can we do when shipping costs rise crazily?

Markets are always changing, and demand and supply are constantly adjusting.

1) First of all, we need to plan transportation as early as possible, because there is currently a shortage of containers in the Chinese shipping market and shipping schedules are unstable. Do not hesitate to arrange in advance to reduce the occurrence of accidents to a certain extent.

2) Face this situation, stay patient, and focus on the long-term relationship, not just short-term benefits. Try not to choose a new freight forwarding company because of its price advantage. 

When there is a shortage of containers, regardless of the smoothness of your cooperation with the new freight forwarding company, the reliability of the new freight forwarding company itself also needs to be considered.

3) Try other transportation methods. For example, if the goods are in Europe, you can consider rail transportation. Although rail transportation is more expensive than sea transportation, it is much faster than sea transportation. The delivery time is stable and the price is much cheaper than air freight.

Get the latest railway freight quote for shipping from China to Europe.

4) When the market fluctuates, try to think about the problem from the customer's perspective, explain to the customer, appease the customer, and help them find the most appropriate solution.

JIKE Logistics | Help you solve shipping problems during the China shipping costs increase

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