Auto Service World
News   November 3, 2021   by Adam Malik

How high could container costs go?

Ocean freight containers cost 10 times more than they did pre-pandemic and air freight costs have jumped even higher, according to an industry consultant, with no relief in sight.

An ocean freight container in January 2020 — three months before COVID-19 was declared a global pandemic by the World Health Organization — coming from Asia to a U.S.-based port cost about $2,700, reported Thomas A. Cook, managing director at Blue Tiger International, a supply chain management consulting agency that works with the U.S.-based Auto Care Association (all prices in U.S. dollars).

One year later, that same container cost upwards of $12,500. In September 2021, costs were as high as $17,000.

“We’ve seen pricing in the mid- to high [$20,000s] as well,” he said during Reducing Risk and Spend in the Global Supply Chain: Challenges & Opportunities in Import and Export as part of the AAPEX October Webinar Series. “So this is something that’s just growing exponentially, and has almost every month.”

Andy Li/Unsplash

During his presentation in late October, he noted that prices had stabilized. But he called that just a blip.

“As the Christmas season comes on and Chinese New Year comes on, we expect this to continue to get worse,” Cook said.

Air freight — which many companies have resorted to in order to get products from overseas amid delays in moving containers — has seen prices skyrocket as well.

In January 2020, moving product cost $1.80 per kilogram. A year later, that was up to $9 per kilogram. In September, it reached $10 per kilogram. Expedited services could cost between $15-$20 per kilogram, Cook said.

And if you’re looking to move things by truck, prices have gone from $1,400 in January 2020 to $2,800 in January 2021 to $4,000 on average. Expedited services were, on average, $7,000 to move a truck from Los Angeles to New York.

“A lot of people who are in the industry are budgeting numbers in the range $8,000-$12,000 range as we move forward to the end of this year and move into 2022,” Cook said,

As for delays, a backlog of four to six months to get orders through is fairly standard right now, Cook noted. So anything that would normally take 90-120 days will now be doubled in terms of time to be delivered. In some cases, there are 12-months delays.

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