The cost of shipping a freight container is usually different due to weight, item quantities, shipping requirements such as refrigeration, and many other factors. Even so, the volatility of freight container prices in recent years has been significant. So what’s caused the changes?
In this article, the team at Allegro Freight Forwarding will discuss the rise in freight container prices, the reasons why the prices have changed, give some of the key factors affecting prices for freight in 2023, and offer some ways to decrease the cost of your freight forwarding process.
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The Rise in Freight Container Prices
During 2020, the price of a freight container sharply rose. Freight transportation typically comes with a number of variances in price brought about by factors like speed, quantity of goods, and time of year, but this unprecedented rise in price took the value of a freight container to new heights.
But why did it change? And what is the price of a freight container now?
The Effects of Global Events on Freight Container Prices
Two key global events occurred during 2020 that changed the value of freight containers.
The first notable event was Brexit in January of 2020. This led to changes in shipping routes with particular impact on the cost of delivering freight to Europe – especially from the UK.
Due to this, the cost of shipping freight into the UK from Europe and vice-versa rose, both due to changes in the value of currency and due to new tariffs and regulations that impeded the delivery of goods across the border.
The second event was the easing of the covid pandemic in the latter half of 2020. This impacted nearly every sector, leading to rapid changes in the value of goods and services. In particular, the increase in manufacturing of goods led to a supply that outweighed the available transportation services, leading to a bottleneck of supply and demand which caused prices to sharply rise.
Since these events, markets have settled down, leading to freight container prices that are more in-line with the pre-rise values from early 2020.
The Drop in Price of Freight Containers
From the peak prices in September 2021, the price of a freight container has been consistently lowering. The rapid decline began at the start of 2022 and has continued through 2023. Currently, freight container prices are at a similar level to what they were before the rise began in 2020 due to Brexit and the global pandemic.
Secure the solution that’s right for you – read our article on the difference between air and sea freight for overseas shipping >
Why do Freight Containers Change in Price?
Freight containers change in price depending on the factors in the marketplace such as supply and demand, changes in regulations for borders, duty and tolls, changes in the value of currency, and more.
Although these factors often result in small changes in price, occasionally a large event such as Brexit or a bottleneck in the supply chain can lead to rather drastic differences in the cost of a freight container.
On the other hand, once the market settles down from these events, or other resolutions occur such as a currency levelling out or the supply-demand becoming more even, it is likely to see freight container prices drop back down.
On an individual basis, freight containers may also display different prices based on:
– The type of cargo.
– The quantity of goods.
– How far away the destination is from the point of export.
– The transportation method.
– The desired shipping speed.
These, among other factors, all contribute to the overall cost of a freight container. However, there are a few ways in which the cost of shipping – both international and domestically within the UK – can be lowered.
Ways to Lower the Cost of Shipping
There are a few different ways to lower the cost of shipping overall, making the dips in freight container prices more beneficial while helping to offset any rises.
Firstly, utilising a freight forwarding service to ship your containers is the best way to ensure the overall costs are kept to a minimum. A freight forwarder takes all the stress and hassle out of shipping, managing the contact points at ports and even navigating things like customs to ensure you get the most out of your freight with the least admin time for you.
Another way to lower the cost of shipping is to use multimodal services. This can be hard to arrange yourself, but a good freight forwarder has the ability to manage their transportation methods and integrate them into a route that is the most efficient for the specific journey of your freight.
Finally, integrating freight forwarding with logistics can also help to cut down on costs. Once your goods reach port, they’ll need to move on to the next stage in the supply chain. Utilising an end-to-end management system lowers the overall time and costs of your transportation, giving the most value to both you and your customers.
Lower the cost of your freight with forwarding services from Allegro. Get in touch today.
Factors Affecting Prices for Freight Containers
A large factor affecting the price of freight containers is its destination. Aspects of the journey like distance travelled, time taken, and crossing borders all contribute to the costs associated with shipping a freight container.
The Effects of Distance on Freight Container Prices
Some of the most popular ports to ship to from the UK are:
– Hong Kong
– New York
– Los Angeles
These locations vary in their distance from London, with 449 miles at the lowest (Hamburg) all the way up to a staggering 6736 miles at the highest (Singapore). The actual distance travelled may vary too, as the shortest route is typically not a straight line.
Other Effects on Freight Container Prices
During covid, freight containers went up to ten times their original cost. This meant a £2,000 container was suddenly valued at around £20,000. Other events like the Suez Canal incident also amplified this.
It’s come back down since, with freight container prices sitting at around where they were pre-covid. However, the actual cost will still vary greatly depending on a number of factors:
– Whether it’s a partially filled container or a full container load.
– The size of the freight container e.g. 20ft, 40ft.
– The type of material. Hazardous materials such as lithium-ion batteries will affect estimates.
The overall price of shipping a freight container can vary drastically depending on the listed factors above, alongside many other aspects of the process. Getting definitive estimates for your freight container price will require contacting an agent at the relevant ports for your freight journey.
Using a freight forwarder will help you find the best solution for you – get in touch today! Your entire freight solution could be just one call away.
Cost-Effective Freight Services from Allegro
Due to changes in the global economy, large marketplace events like Brexit, and the after-effects of the pandemic, freight container prices have been volatile over the last three years. However, with prices settling back down to the values they were before the rise, now is the best time to get back into forwarding your freight for import and export.
Get started with cost-effective freight forwarding today. Contact a member of our team to receive a freight plan bespoke to your needs, utilising the best transport modes for your freight’s journey. See our services for an overview of our offerings or read on with some related articles.
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