We have all seen price increases in virtually every aspect of our lives. Gas is up, groceries are up, lumber is way up there and there are so many others. Another factor driving higher prices is a dramatic increase in sea freight and much of the increase is yet to show up in the market.
So here are the numbers. Prior to the pandemic it cost around $3000 to get a 40′ container from Asia pecific to Vancouver. This rate had gone above $10,000 only 2-3 months ago due to demand increases, gas price increase and many other factors. As of end of July this cost has gone to around $25000.
Sounds insane? Yes but its true. The buzz is that raw material shipments to Asia Pacific have dropped significantly while imports have surged. So many more containers are coming to North America but not many going back. This means ships are going back empty and that extra cost is being passed on to the importers and eventually to the end buyer. It’s not only the shipping cost but also the cost of containers. Since old containers aren’t going back, importers are having to purchase new containers and those are costing a fortune due to high demand (North of $10k).
All these factors are driving prices to levels not seen before, and much of this price increase yet to kick in fully. We expect further price increases in the coming weeks.