The global shipping industry is witnessing the numbers from 2008 for the first time due to the combination of booming demand for goods and a global supply chain that is currently collapsing under the weight of the Covid-19 which is further increasing freight prices.
According to experts, the sudden jump is caused due to a 333 percent increase in shipping cost due to the outbreak of Covid-19 that resulted in disruption of global supply chains. The hike in cargo charges has also aided in inflation around the globe. The increase in transportation cost also resulted in a cascading effect in the global economy and the end-users are affected the most.
The majority of the global trade takes place via sea, therefore the impact of the higher shipping cost will not be limited to one economic sector. At present, a 40-foot container from China to Europe costs $14,287, which is more than 500 percent from the previous year.
Currently, with the global economy reopening and rebounding from the Covid-19 pandemic, the containers sector is set for huge profits due to a rise in demand for raw materials and other items. Additionally, logistics companies are also amassing huge profits. Recently, Maersk posted an estimated $5 billion in earnings last month. This is likely to continue for a while in the near future since the demand for raw materials and other items are not expected to go down anytime soon.