Shipping & Freight Cost Increases, Current Shipping Issues, and Shipping Container Shortage [2023]

Last updated: March 13th, 2023

Freight & shipping costs & delays

Extremely elevated logistics costs have been one contributor to inflation during the pandemic.

But since the spring of 2022, ocean freight prices have come down, with China-West Coast US rates recently hitting pre-pandemic levels.

Volumes of imported containers to the US continued to fall through November 2022,  and congestion eased significantly, especially at LA/Long Beach, where congestion levels returned to normal in late November.

Freightos data shows that rates to ship a 40-ft container from Asia to the US West Coast dropped by more than 80% since the end of April 2022, while prices to the East Coast  fell by almost two-thirds. A big driver in falling logistics costs is a drop in consumer spending, which had been responsible for increased sales among many importers over the last two years.

Keep reading for the monthly freight market update for March.

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Ocean freight market update & forecast for 2023

According to Freightos data, Asia- N. America rates have dropped 40% since the end of February, and are now on par with 2019 levels, suggesting carriers are opting for a price war on this lane as well as on the transpacific.

• Asia- N. America West Coast rates fell 8% to $1,071/FEU this month, 93% lower since a year ago, and essentially on par with its November 2019 level of $1,321/FEU.
• Asia – N. America East Coast rates fell 10% to $2,344/FEU, and are 87% lower than last year.
• Asia – Europe rates continued to decrease along with falling volumes as well, as prices fell 17% to $2,344/FEU, 87% lower than last year.

Transpacific rates continued to fall as well, with West Coast prices below $1,100/FEU – 30% lower than March ‘19 and in fact lower than at any point in 2019.

These are container freight rates for the second week of March 2023 according to the Freightos Baltic Index:

Last week’s average Asia – Europe container rate decreased 17% compared to a week prior, but the latest daily rates indicate prices are now at about the $1,500/FEU level, a 40% drop since the end of February and about on par with March 2019 rates. This significant come-down suggests Asia – Europe ocean trade has entered price war territory as demand continues to slide and carriers are keeping some excess capacity active. 

Asia – Mediterranean prices are at about $2,755/FEU, a 30% drop since February, but still 30% higher than in 2019.

A recent joint statement from West Coast port operators and the ILWU reported that both the ports and the union are hopeful that a deal would be reached soon, and negotiations have begun on other West Coast labor issues in the US and Canada as well.

But it remains to be seen if the significant discount to ship to the West Coast relative to East Coast rates will be enough to entice some importers – who shifted volumes to East Coast destinations to avoid potential labor disruptions – to shift back to the west before a new labor agreement is signed. 

Some ocean carriers who used record profits to expand to air cargo are now pulling back on air capacity too as demand for air cargo continues to fall. Some airlines are nonetheless optimistic that this year’s revenue will be stronger than in 2019 even if volumes are well below last year’s levels.

Watch the video below to learn what to expect as we move into 2023:

Freight cost changes from 2020-2023 

The past few years have been volatile for shippers around the world. At the beginning of the pandemic, attempts to hedge against dramatic rate drops via capacity management contributed to an increase in prices when consumer demand shot up in the summer of 2020.

Now two years into the supply chain crisis, rates have dropped significantly – although on some lanes prices are still much higher than they were pre-pandemic.

For a bird’s eye view of freight cost increases in 2022 and since the beginning of serious supply chain disruptions, check out the chart below based on FBX data.

Air freight market update, delays, cost increases, and forecast for 2023

The subdued demand of the past couple of months continued into December reflected in Freightos Air Index rates ex-China to N. America and Europe remained stable compared to November but were about 40% lower than a year ago. Carriers are hoping that –  if key economies can avoid serious recessions – demand will recover to more typical levels and seasonality will return in 2023 as inventories normalize. 

• China – N. America rates: $6.34/kg 
• China – Europe rates: $6.01/kg 

Amazon shipping costs in 2023

Keeping up with door-to-door pricing for Amazon FBA shipping can be a hassle. With data from thousands of weekly pricing points from freight forwarders, we’ve developed a weekly index of freight prices including for Less than Container Load (LCL), Full Container Load (FCL), and air cargo, from major export cities in southeast Asia to the most popular Amazon fulfillment centers in the US.

Want to know what the rates are instantly? Check out Freightos.com’s FBAX, the Amazon FBA freight index.

With data from thousands of weekly pricing points from freight forwarders, we’ve developed a weekly index of freight prices including for Less than Container Load (LCL), Full Container Load (FCL), and air cargo, from major export cities in southeast Asia to the most popular Amazon fulfillment centers in the US.

Read up on how Amazon sellers can deal with rapidly-changing consumer demands as well as inventory challenges HERE.

Will shipping prices keep going down?

In the current situation, many importers and exporters are wondering when they can expect freight rates and shipping prices to go level off. The answer? Not yet.

But, despite potential delays and volatile freight shipping costs, there are a few steps importers can take right now:

How to navigate the current freight market:

• Compare at least a few quotes and modes to make sure you are getting the best cost and most efficient service possible.
• Buffer your freight budget and transit time for changes. Costs due to unforeseen delays or limited capacity can arise, so be prepared.
• Explore warehousing options to mitigate the effects of lowered demand and business restrictions in the US.
• Pay attention to the profitability of your goods and consider if a pivot could be worthwhile. Additionally, remember to factor in freight costs when assessing profitability.

How small or midsize importers can plan for operational success on Freightos.com:

• Understand that delays and extra charges may arise. Freight forwarders are trying their best to move goods on schedule without additional fees, but in this unstable period, delays and additional charges can occur out of forwarders’ control.
• Consider which shipping mode is best for you right now. During non-pandemic times, ocean freight is typically far cheaper but has a significant lead time. If your transit time demands it, ship by air and you’ll have confidence in the transit times.
• Book now if you can. Freightos.com is fully operational, so book orders now to get goods moving as quickly as possible.
• Communicate regularly with your freight forwarder. This is more important than ever – staying in touch means you’ll have a better handle on your transit time and stay on top of any changes that may arise.
• Make sure that you have the manpower to accept your goods upon arrival. This will minimize delays.

How to stay informed: 

• Keep up to date on the industry with our weekly freight market update.
• Check out our daily FBX ocean rates index to help you stay on top of freight rates in 2023.

As always, we at Freightos.com are here to help. Please reach out if you have any questions or concerns.