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With so many unforeseen incidents stalling global trade, ongoing delays have sharply reduced the system’s effective capacity and put upward pressure on shipping rates that began reaching record highs months ago.

Unfortunately, carriers have no extra ships to meet a tidal wave of freight demand, containers are in short supply or can’t get quickly repositioned where needed, and destination ports are piling up with boxes because they can’t keep up with the volume. The logjam has been adding weeks of delay for major export trades from Asia. Some shippers say they are unable to get containers or space on vessels at ports of origin, as demand for ocean freight continues to outstrip supply, keeping ports congested and prices high.

One report shows Asia-U.S. West Coast rates six times higher than a year ago, and the price for shipping to the U.S. East Coast has quadrupled. Rates from Asia to Northern Europe climbed 4% since last week, and are more than eight times higher than a year ago and 2.5 times more than at the start of the year.

The massive tide of imports has flooded air transport, trucking, rail and warehousing, thus overwhelming capacity in many commercial centers. Carriers have canceled many sailings to help restore schedules. Unfortunately, these blanked sailings come at a time when the global supply chain needs more capacity, not less.

Source: Freightwaves