Rising consumption in China before and after the Labour Day holiday, along with a strike in Canadian railroads and concerns over labour disputes at US ports, are contributing to the ongoing spike in freight rates, according to a report from the Korea Ocean Business Corporation (KOBC).
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The report highlighted that, in addition to the well-known Red Sea crisis and the resulting shortage of vessels and containers, other factors have significantly contributed to the surge in freight rates.
The Chinese government's declaration of 2024 as the 'year of promoting consumption' to stimulate demand also played a crucial role. As part of this initiative, the government encouraged home renovations and the replacement of old goods.
Chinese consumers received subsidies of up to CNY 10,000 (US$1,380) to replace their conventional vehicles with electric or hybrid models.
During the Labour Day holiday, trade-ins of old goods boosted sales of vehicles, home appliances, and furniture by 5% to 8% compared to last year. E-commerce sales grew rapidly, increasing nearly 16% year-on-year. Throughput at the Port of Shanghai rose by 4% year-on-year in April, reaching 4.18 million TEUs.
Meanwhile, increasing US consumer demand is driving up US containerized imports.
Source: www.container-news.com