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.”

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.