As more Americans shift their purchasing to online home shopping, transpacific sea freight rates have risen to the highest on record and fueled Asian container shipping industry growth.
Household appliances exported from South Korea to the U.S. increased over 50% in August over 2019, delivering a third consecutive month of increases, Korea Customs Service data show. At the same time, shipments of computers, laptops and other technology soared over 150%.
Shipping rates on the transpacific route almost triple from earlier this year’s based on a number of reasons including increased consumer demand, border closures from the coronavirus pandemic, and slowing economic activity. The stay at home orders affecting much of the world’s population, created increased demand for technology goods and home improvement items. The upcoming Christmas holidays has caused Retailers and consumers to increase purchasing as well.
“With Black Friday and the Christmas holiday coming up, the outlook for the container shipping industry looks good until the end of this year, and even until January,” Um said.
“The coronavirus outbreak has changed the way consumers spend money,” said Um Kyung-a, an analyst at Shinyoung Securities Co. in Seoul. “Because they’re at home more than ever, most of the money they spend is to improve their quality of life, and that’s benefiting shipping companies.”
According to Drewry World Container Index, the spot rate to haul a 40-foot container to Los Angeles from Shanghai increased to $3,922 this week from a low earlier this year of $1,318. According to Bloomberg, South Korea’s biggest shipping company, HMM Co., has added an extra vessel capable of carrying 4,600 20-foot containers this month at the request of their clients