Why Is The Price Of Shipping From China So High?

Posted by Marian

With many companies now going digital, shipping challenges have also escalated which resulted to shipping rates going double and triple this year. The shortage in shipping containers and the increase in freight rates have posed a global challenge for many businesses that constantly move supplies and products across several points in the world.

How then do you build resilience in the global supply chain? Shipping rates have gone through the roof over the past couple of months which created this domino effect on all industries. It has been a rough patch for everyone – big and small players. This has been impactful for many countries especially those that source materials from China.

Supply vs. Demand Shift

The pressure and shifts in pricing is a result of the supply and demand tilt. The shipping or freight industry is one badly hit industry by the COVID-19 pandemic. The disruption in production especially by the major oil producing countries has also caused this upward slope in freight pricing.

The upsurge or the sudden increase in the demand of certain goods and services plus the shortage of shipping containers have also cause the significant increase of freight rates. The freight restrictions set due to the pandemic has also caused the increase in shipping rates.

In addition to that, many companies now also have to amplify or step up their manufacturing game plan to meet the high demands of many companies and consumers. This has resulted to intensified pressure or demand placed in the shipping industry; which also affected the turnaround time for many containers especially with ocean freight.

Speed and Convenience of Split Shipments

Entrepreneurs in the e-commerce space especially in China and other parts of the world have been using splits shipments for many years now because it banks on speed and convenience.

If you need to pick up and transport inventories to different locations or split up goods into individual boxes creating sub-orders especially when you need to segment bulk orders into different categories then this is one of the best options you can tap into.

Split shipments is very popular and is the preferred option by many businesses when it comes down to international shipping of goods especially if you have to ship to different locations. However, with multiple shipments come higher shipping costs which also lead to increased carbon footprint.

Demand for More Shipping Containers in China

The sudden surge or increase in shipping rates from China is also because of the high demand in their shipping containers. China also happens to be the biggest manufacturer in the world and that means every country like in Europe, Asia, and the United States would depend on China for supplies and other basic goods.

This is precisely the reason why even the first-world countries would not budge or complain even if shipping rates from China would be double or triple the usual price. With the limited supply of containers due mainly to the pandemic and the huge demand from companies and consumers, shipping rates have also significantly increased.

Communication Problems

In order to recuperate from the losses, some companies would increase their prices which result to inflation. Lack of communication or even last-minute cancellations or changes can have that negative impact and increase shipping rates too. When these large or giant corporations take drastic actions like increase product prices, the entire economy is shaken as well.

What Should We Do?

If your business is affected by the price hike in shipping rates from China, there are a couple of measures that you do to combat the hike in freight rates:

  • Change the date and time of shipment and resort to shipping during non-peak days or Mondays and Fridays; except Thursdays which is regarded as the busiest day for freight. You can save by as much as 15% to 20% on shipping costs every year this way.
  • It pays to plan your shipping in advance. You can ship different or multiple deliveries all at once rather than make individual shipping. This way, many companies can save from shipping fees and also take advantage of discounts and incentives when they ship in bulk.
  • Avoid over-packaging because this can increase the total shipping costs and also contribute to pollution.
  • Partner up with transportation or freight forwarding companies for your shipping so you can take advantage of lower shipping fees plus also get perks and discounts when you choose to ship in bulk.

Planning your shipments in advance can help you save a lot on shipping costs plus also avoid unnecessary delays when you ship from China. You can also track freight costs, trends, and also predict rates when you choose to plan your shipments in advance. Collaborations, employing advanced tools and tech, using data-led insights, as well as digitizing operations will help you strategically ship from China while keeping the high costs at bay.

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