The cost of shipping a container from China to the U.S. West Coast has reached record highs in 2021 and global supply chain conditions are causing predictions for more increases. Container carrier contracts being signed by major U.S. importers suggests that these increased rates are going to be around for a while. Rates in recent contracts have been ranging between 25% and 50% higher than a year ago while spot freight rates are coming in at as much as 300% higher.
Factors Contributing to Rising Ocean Freight Rates
Uneven economic recovery contributed to the start of the rising shipping container rates. China is exporting to the U.S. and Europe at a much higher volume than the other way around. China’s economy recovered much more quickly than others as the pandemic situation within the country was under control around the second quarter of 2020. The surge in demand for logistics services is causing a shortage of containers and delays at seaports.
Due to China’s increased export volumes compared to other countries, there are approximately three containers leaving for every one that is arriving. U.S. backlogs and staffing issues are causing longer processing times and making containers slow to return to Asia. Desperate companies trying to ship goods from China to the U.S. and Europe are paying premium rates and waiting longer to obtain containers. Low international flight volumes are also creating a demand for ocean containers for product that would normally be shipped via air freight. Lack of options and increasing demand for international shipping are causing the bloated rates to linger.
Ship Overweight Containers to Mitigate Rising Costs
Shippers of heavy, dense cargo (e.g. metals, stones, bricks, grains, etc.) are often paying to ship empty space in partially filled 40-foot containers to stay within legal weight limits for U.S. roads — a maximum of 44,000 lbs. for a container. The weight limit of the actual container is typically at least an additional 10,000 lbs.
Solutions are available that allow shippers to maximize their containers and still legally transport product over the road. There are additional costs associated with these solutions including overweight drayage, transloading, and final delivery of deconsolidated loads. However, the cost savings from shipping fewer, heavier containers is usually more than enough to offset the additional costs for moving over the road. Companies average overall savings of 15-20% by shipping fewer overweight containers.
Move Overweight Containers to Smart Warehousing with No Additional Fees
Smart Warehousing is a 3PL warehouse partner located in Logistics Park Kansas City. Our warehouse is less than a mile from the BNSF Intermodal and within a heavy haul corridor. Our proximity to the rail and access to the heavy haul corridor provide significant cost savings for our clients shipping heavy, dense cargo. Containers up to 58,000 lbs. can be moved over the road to Smart Warehousing with no additional fees over a standard weight container.
Our team can inspect your inventory, palletize, and deconsolidate onto trucks to be delivered to their final destination or provide storage services. Partnering with Smart Warehousing for storage, distribution, and fulfillment eliminates the need and costs for transloading and transporting to another warehouse or distribution/fulfillment center.
To learn more about shipping overweight containers to Smart Warehousing or our other 3PL services, contact the Smart team.