The prices quoted by shipping companies to bring a container of goods from China to Malta have come way down over the last months, and are currently just a fraction of their peak price.
Recent quotes resulted in an average price of €3,620 per 40-foot container, 76 per cent lower than the €15,000 being quoted mere months ago.
However, they remain significantly above pre-pandemic levels.
During 2021 and early 2022, a supply chain crisis caused by COVID lockdowns, particularly in China, burgeoning consumer demand, and high traffic in many major ports (with 500 ships left in limbo) sent shipping prices spiralling upwards.
Major US retailers like Walmart, Home Depot, Costco and Target responded by chartering their own smaller ships to ensure time-sensitive goods like Christmas-themed products arrived on time.
In February, vice-president of the Chamber of SMEs Marcel Mizzi said that container prices bringing cargo from China to Malta had skyrocketed from around €2,000 to around €17,000, with the impact being especially felt in low value, high volume goods, like household items and toys, as well as construction material like pipes.
For such items, the cost of shipping often ended up being higher than the cost of the goods themselves.
Incredibly, two-thirds of global sea freight deliveries in August 2021 arrived late – a record high. The average delay hit 7.6 days, also a new high.
The impact of these issues were felt by consumers across the globe, and Malta was no different, with shoppers reporting almost weekly increases in the prices quoted on the shelves of all kinds of stores.
Shipping industry sources contacted by BusinessNow.mt gave a lower peak price than that quoted by Mr Mizzi, at an average of around €15,000 for a 40-foot container, although they stressed that much also depends on the port of departure, route, and goods carried.
It should also be noted that prices quoted remain close to double the pre-pandemic norm.
The figures they quoted were derived by collating a number of quotes and extracting an average.
The global context
The downward trend in container shipping prices is a global phenomenon, although the decrease seems to be more pronounced in Malta.
In September, Freightos Baltic, which provides a daily freight container index, showed a decrease of 60 per cent in the cost of a container from China to the West Coast of the USA, and a decrease of 42 per cent for goods shipped from China to Europe.
Marine Insight reported that the rate for both routes peaked at over $20,000 (€20,000) in September 2021, with the ensuing decrease pinned on the threat of global recession, caused by surging energy prices due to Russia’s invasion of Ukraine, the threat of runaway inflation (itself partly due to high shipping costs), and the return of other avenues for consumer spending, like travel, leisure and other services.
Analysts told the shipping publication that shipping rates are set to further ease for the remainder of the year and in 2023, as a series of new vessels will hit the water over the next two years, with net fleet growth expected to be over nine per cent in 2023 and 2024.
However, it is unlikely that container prices will go down to pre-pandemic levels in the near future, with higher fuel costs making ships more expensive to run.
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