Prices to ship a container of goods from China to Malta have dropped significantly over the last months, and are currently relatively low compared to the pandemic levels.
The recent quotes resulted in an average price of $3,620 for a 40-foot container, 76 per cent less than the $15,000 quoted just months before. However, they are still significantly higher than pre-pandemic levels.
A supply chain crisis caused by COVID lockdowns, particularly in China, growing consumer demand, and high port traffic (leaving 500 ships stranded) in 2021 and early 2022 sent shipping prices spiralling upward.
Major US retailers like Walmart, Home Depot, Costco, and Target chartered their smaller ships to ensure that time-sensitive goods like Christmas-themed products arrived on time.
Marcel Mizzi, vice-president of the Chamber of SMEs, said in February that container prices to bring Chinese cargo to Malta had risen from around $2,000 to around $17,000, particularly hurting low-value, high-volume products such as household items and toys as well as construction materials like pipes.
The shipping costs for such items were often higher than the items themselves.
The record proportion of delayed sea freight deliveries in August 2021 was astonishing—two-thirds of deliveries arrived late. The average delay reached a new high of 7.6 days, also a new high.
Consumers across the globe felt the impact of these issues, and Malta was no different, with shoppers reporting almost weekly increases in the prices quoted on the shelves of all kinds of stores.
Global container shipping prices have been dropping, although the drop seems to be more dramatic in Malta.
Between September and November, Freightos Baltic, a daily freight container index provider, reported a 60 per cent drop in the cost of a container shipped from China to the West Coast of the United States and a 42 per cent drop in the cost of goods shipped from China to Europe.
According to Marine Insight, the price for both routes peaked at over $20,000 (€20,000) in September 2021, with the subsequent decrease credited to the possibility of a worldwide economic downturn, resulting from Russia’s occupation of Ukraine, the chance of uncontrolled inflation (which itself was partly caused by soaring shipping costs), and other alternatives for consumer spending such as travelling, entertainment, and other services.
According to the shipping publication, shipping rates are predicted to drop for the remainder of 2019 and 2020 as new vessels enter the water, and net fleet growth will be over nine per cent in 2023 and 2024.
However, containers will probably remain expensive for the foreseeable future, as higher fuel costs make ships more expensive to operate.