Market News

Import costs up 20pc more on China container shortage

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Siginon Group managing director Meshack Kipturgo. DIANA NGILA

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Summary

  • The global freight industry has experienced a deep shortage of shipping containers since the start of this year owing to the economic fallout of the Covid-19 which hurt the demand for goods and disrupted port and factory operations.

Kenyan importers have been slapped with a further 20 percent rise in freight charges following a shortage of shipping containers in China.

A spot check by the Business Daily shows that the average shipment charges on a 40-foot container from China had breached the Sh646,000-mark, up from about Sh430,800 in March initially as traders scrambled for the few available containers. The latest rise means freight charges have jumped 95 per cent since December.

“The freight rates have increased to some extent with some additional charges being incurred. For instance, due to scarcity of empty containers globally, the freight rates, especially from China to East Africa have gone up from the initial Sh430,800 ($4,000) per 40ft container to almost Sh646,200 ($6,000),” Siginon Group managing director Meshack Kipturgo told the Business Daily.

China is a key source market for Kenyan imports, including electronic and electrical products, clothing and textiles and fish.

The global freight industry has experienced a deep shortage of shipping containers since the start of this year owing to the economic fallout of the Covid-19 which hurt the demand for goods and disrupted port and factory operations.

The shortage of shipping containers in China is linked to the fact that while the Asian nation’s recovery from the pandemic has been faster, Covid-19-related restrictions and staffing shortages in ports across the US and Europe have delayed the return of containers to the east Asian ports.

This means Chinese factories and ports are unable to process containers at the normal rate because of the holdbacks in major countries across the globe.

China is home to several of the world’s largest container ports, including Shenzhen, Shanghai and Ningbo-Zhoushan whose operations now stand affected by the shortage of shipping containers. And with the shipping container shortage in China, freighters have been hit with extra costs, which are passed on to consumers.