Shipping cost from China has dropped by over half on the back of the availability of empty containers and the low demand for goods in the global market, reversing historic freight charges witnessed in the last two years.
The shipping cost of a 40-foot container to Kenya has now dropped to a low of $3,500 from a high of $7,000 at the height of the Covid-19 pandemic, coming as a major relief to consumers as this will have a direct impact on prices of imported goods.
In December, a 40-foot container was going at $4,000 but has dropped to the current lows of $3,500.
Shippers and traders say there are more empty shipping containers in circulation, reversing a crisis that was witnessed in the last two years where it was hard to get them, leading to exorbitant costs as shippers jostled for the limited available boxes amid high demand.
“With the easing of the container crisis, we have seen the cost of containers come down significantly over the last couple of months,” said James Kariuki, chairperson of the Kenya-China Traders.
A global surge in demand for certain goods during the Covid-19 pandemic had upended normal trade flows, using up cargo containers in supply and leading to bottlenecks.
Mr Kariuki said the opening up of China after stringent lockdown rules as late as December last year has also played a significant role in the continued dropping of charges.
China is a key source market for Kenyan imports, including electronic and electrical products, clothing and textiles, and fish.
The managing director of Siginon Group Meshack Kipturgo said the easing demand for goods in the world market and high availability of empty containers have played in favour of shipping prices.
“The demand for goods, especially among the major economies in the world, has been down. This coupled with normalcy in the supply of the empty containers has eased pressure on freight charges,” said Mr Kipturgo.
Mr Kipturgo said the shipping charges are not expected to go up in the near future and that the current prices will prevail for some time.