From the end of the year 2020, shipping costs have skyrocketed due to the trade imbalance between EU/USA and China, causing freight rates to increase 200% to 300% across different routes, and trade congestion to occur worldwide. Containers are also in high demand and will require premium rates to be available as well.



 
Due to COVID-19, importers have decreased their level of activity, causing a decline in orders for Chinese suppliers during 2020 Q2 and Q3. However, with Christmas season coming up, demand started to surge at Q4. The consequences were delivery delays and tight congestion worldwide, especially for EU-China supply chains.
 
The CNY holidays also prompted western companies to up their orders to prepare for the halt of production in China. However, most Chinese companies opted to work through the holidays to try to keep up with their already overloaded schedules. This indicates that this trend may very well persist through 2021 Q1.
 
Another outcome of the pandemic has been the shortage of containers, with China aggressively trying to get empty containers back. This resulted in 3 out of 4 containers from the US to go back empty, instead of being full of cargo. Similar crisis is also met in numerous European countries as well, But even the supply of steel and lumber for building containers are also being hit by COVID-19.
 
For 2021, problems such as the lack of containers and higher rates will remain the same, as forwarders continually remind clients to plan early and understand present difficulties and delays. Air freight may be affected also by urgent requests concerning vaccine transportation, so space will be decreased even more. Exploring warehouse options and monitoring freight budgets, transit time will be key as well.
 

Reference links:
https://www.cnbc.com/2021/01/22/shipping-container-shortage-is-causing-shipping-costs-to-rise.html
https://www.freightos.com/freight-resources/coronavirus-updates/
https://www.supplychainbrain.com/blogs/1-think-tank/post/32361-what-an-unpredictable-year-means-for-freight-costs-in-2021
https://www.shiphub.co/increase-in-freight-rates/

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