News

By Brendan Murray (Bloomberg) —

Container shipping rates from Asia to the U.S. and Europe increased to new record levels over the past week, ensuring transportation costs will stay elevated for companies heading into a peak season for rebuilding inventories.

The spot rate for a 40-foot container from Shanghai to Los Angeles increased to a record $9,733, up 1% from the previous week and 236% higher than a year ago, according to the Drewry World Container Index published Thursday. The Shanghai-to-Rotterdam rate rose to $12,954. The composite index, reflecting eight major trade routes, hit $8,883, a 339% surge from a year ago.

Among the reasons for the tight market: a persistent shortage of containers along the busy transpacific lane carrying American imports. Goods in containers are flooding into the biggest U.S. gateway for seaborne trade at five times the volume of steel boxes full of exports.

“The backlog of getting containers, getting the product, getting it on the ships and just the delays in getting any of those products is significant today,” Clarence Smith, chairman and CEO of Atlanta-based Haverty Furniture Cos., said during an investor conference this week.

Asked how long he expects the supply problems to last, Smith said “I’m hearing it’s going to go into next year. I don’t see it really getting better this year, maybe a little bit better. We’re having to pay premiums to get containers.”