Freight rates continue to rise as a results of Suez Canal Blockage, Covid-19 and Brexit

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Routes around the world are being affected by the continuously rising rates of air freight. After the relaxation of lockdowns in the US and UK, the demand for goods has gone up, and a rise in air cargo prices travelling towards the US is having a knock-on effect on international markets.

 

Covid-19 and Brexit Challenges

Whilst at a supply chain resilience webinar earlier this year, Nick Blenkinsop, customs consultant for the Institute of Export & International Trade, emphasised the challenges both Brexit and Covid-19 presented for businesses.

Nick Blenkinsop noted as the pandemic caused shortages in warehouse capacity and a surge of 300% in container rates, new customs rules and practices brought on by Brexit have left UK EU freight flows more unpredictable. In particular, EU online deliveries to the UK plummeted by 50.7% in the first quarter of 2021, while exports going to the EU dropped by 42% in January. Although exports returned by 46% in February.

 

Suez Canal Bloackage

As reported by Lloyds Loading List, data from Freightos shows that the Suez Canal blockage impacted the Asia-Europe rates, which rose by 6%.

Before the Suez Canal crisis, rates had been falling in February but a knock-on effect of carriers avoiding crowded ports such as Rotterdam resulted in a change of delivery times and prices.

 

UK Charters

Experts from the logistics industry have spoken about Brexit’s impact and how now e-commerce volumes to the UK cannot travel with EU shipments, they will now require multiple charters on fixed schedule flights from China’s inland cities to London Heathrow.

 

Container Shortage

Both EU importers and exporters have been struggling with a container shortage. EU importers have been impacted as their goods have required extra shipment between ports, and exporters having their bookings rejected by carriers prioritising empty containers to Asia.

Freightos says that the one-time shipment cost from the EU to the US has grown by 60% since the start of April and surged to 87% since January.

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