What is the reason for the price increase of international logistics during 2020-2021 ?

Whether as  a steel manufacturer and exporter or as an steel importer, we all are very concerned about the changes in logistics prices.
What is the reason for the price increase of international logistics during 2020-2021? 
XUD STEEL ( steel pipes & steel coils & hydraulic cylinders solutions supply enterprise) take you have a look together why international logistics prices continue to rise. 

Covid-19 Epidemic is an experience for the global supply chain. The various changes in the international logistics system are mainly due to the supply chain rupture and unidirectional recovery caused by the epidemi, the resulting extreme imbalance in transportation capacity has resulted in the current distortion of the entire international logistics market. 

The rupture of the chain and one-way output have caused extreme distortions in the entire shipping market.
First of all, last year has caused the suspension of the entire international shipping market in the first quarter. For example, international shipping giant service provider MSK and China COSCO have been severely damaged during this period.In order to survive, Logistic Shipping giant MSK took self-rescue measures, such as shrinking routes and increasing prices. It turns out that the market can still accept the price increase. The entire market begins all the way to the price increase. The imbalance in the international supply chain caused by this epidemic has brought about one-way output. For example, there is no return cargos + shipping containers after it was transmitted to the United States.  If wait for the containers to return, the cost is not as good as re-producing the containers. This has also caused the price of containers to remain high. The third, The epidemic caused uninterrupted shutdown of regional ports unloading, and also caused the overall cost to rise.

The epidemic has spawned a series of shipping problems. The state and government have too little penetration of this force, and there is almost no state-level forces to intervene in coordination. As far as freight rates are concerned, there are very few places that China can control. The Chinese government can only ask China Shipping and other state-owned enterprises not to increase prices. They did. But there are others like MSK and other shipping companies on the market. Therefore, the state cannot exert a fundamental market influence on this area. 

When will the logistics market return to normal?

The shipping market is an international market. The market will have a supply-demand relationship, which will change due to imbalance.Analyzing from the source, the only solution is to restore supply and restore the balance of the supply chain.It's just that in the short term, it will not be able to return to the state before January 2020.This requires a cycle to recover. 

The market has undergone earth-shaking changes in a year and a half. Some changes will remain as normal.We expect that starting next year, the entire international logistics market will gradually return to normal, but there will be several changes. 

XUD STEEL  hope that shipping prices can return to rationality. We hope that our customers can purchase satisfactory steel pipes steel coils products at low prices and reasonable costs. 

Contact Us