Understanding the International Freight Increase and Its Impact on Prices

You may have noticed recent price adjustments on some of our products. These changes are primarily driven by the significant increase in international freight costs. To help you understand why this is happening, we'll explore the reasons behind the rising freight rates and how they affect our pricing.

The Surge in Ocean Freight Rates

International freight costs have skyrocketed over the past few months, a trend that's affecting businesses worldwide. According to Freightos, "the combination of high demand, port congestion, and limited capacity has led to significant delays and increased costs" . This sudden surge in demand has created a bottleneck in the supply chain, resulting in higher shipping prices.

Factors Contributing to Increased Freight Costs

Several factors are driving the dramatic increase in ocean freight container shipping rates. Xeneta highlights that "a surge in demand for goods, limited container availability, and disruptions caused by global events have all played a role" . These factors have combined to create a perfect storm of supply chain challenges, pushing costs higher across the board.

1. Increased Demand for Goods: The pandemic has led to a shift in consumer behavior, with more people shopping online and requiring home deliveries. This surge in e-commerce has increased the demand for shipping containers, outstripping supply.
2. Port Congestion: Major ports worldwide are experiencing severe congestion. For example, the ports of Los Angeles and Long Beach have seen unprecedented backlogs, with ships waiting days or even weeks to unload. CNBC reports that this congestion is a significant factor behind the rising freight rates .
3. Limited Container Availability: The global shortage of shipping containers has further increased the problem. Containers are often stuck at ports or in transit, leading to a scarcity that drives prices up.

The Impact on Product Pricing

As a result of these increased freight costs, businesses like us are facing higher expenses to import goods. This increase in shipping costs is inevitably passed down the supply chain, affecting the final prices of products. Flexport notes that "full ships and rising rates on Far East-Westbound ocean routes are putting upward pressure on shipping costs" .

Why Prices Are Increasing

At Custom Cup Factory, we strive to provide high-quality products at competitive prices. However, the current international freight landscape has necessitated price adjustments. These changes ensure that we can continue to deliver the products you need without compromising on quality or service.

References:

Freightos. (2023). Shipping Delays and Cost Increases

Xeneta. (2023). What is Behind the Sudden and Dramatic Increases in Ocean Freight Container Shipping Rates

CNBC. (2024). A Sudden Container Crunch is Sending Ocean Freight Rates Soaring

Flexport. (2023). Full Ships and Rising Rates in Far East-Westbound Ocean Routes