The cost of transporting containers from Shanghai, the world’s largest port, to Los Angeles doubled between October 2023 and mid-March 2024.

Meanwhile, the cost of transporting containers from Shanghai to Genoa or Rotterdam more than tripled in the same period. 

Overall, according to UNCTAD, all segments of seaborne trade, whether in terms of geography or type of shipment (bulk, containerized, tanker, etc.), have been affected. 

Trade between Asia and Europe, along with the shipping lanes running between the Pacific and Atlantic coasts of the Americas, have experienced severe disruptions. 

Even more striking, UNCTAD notes, are the ripple effects, which have raised freight rates on routes that do not cross these hotspots, due to the disturbing impact on global shipping and logistics. 

Transporting containers

As seaborne trade accounts in volume for over 80% of goods trade and about 70% of its dollar value, disruptions in the Panama Canal and the Red Sea, which in previous years handled, respectively, 2-3% and between 12 and 15% of international seaborne trade volume) have again raised freight costs in recent months.

Container shipping is done by ship, truck or train and a wide range of products are moved in these large metal or plastic containers, from cars and computers to food, furniture and clothing.

Despite such steep increases, freight rates are still well below the record highs of late 2021 or early 2022. 

However, the March 2024 monthly levels of the Shanghai Containerized Freight Index or Dry Bulk Index were above the 85th percentile of their distribution (as of the end of 2009).

Looking ahead, the situation in the Panama Canal is expected to improve after the rainy season begins in late April or early May.