Due to uncertainty and pressures resulting from geopolitical crises and attacks in the Red Sea, there is increasing tension on container freight rates from China with implications for materials procurement that is also becoming a significant issue for the PV industry.
Significant price increases
Currently, according to The Economist Intelligence, about 30% of the world’s container traffic passes through the Suez Canal. The disruption of shipping routes, instability in the Red Sea areas, transport suspensions by some logistics companies, and increased fuel costs due to adjustment to uneconomic alternative routes are limiting the availability of imported products with a significant increase in logistics costs and consequently prices.
Mercantile tariff increases
At the end of the third week of January 2024, Drewry’s World Container Index (World Container Index) reached about $4,950 for 40-foot containers on the Shanghai to Rotterdam route, an increase of more than 380% from about $1,000 in October 2023. Drewry forecasts that there will be further significant rate increases in the coming weeks due to increases in insurance costs and vessel relocation.
The same argument is held by the Milan-based ISPI (Institute for International Policy Studies), which predicts hikes on merchant tariffs just as the effects of the pandemic were being dispelled.
