UK shippers forced to pay nearly $1,000 more per box from Asia compared to their European neighbours
Just 33 km is all that separates the United Kingdom from the rest of Europe at the narrowest part of the English Channel, yet post-Brexit, combined with the operational scourge of the pandemic, it now costs British shippers nearly $1,000 more per feu to get their goods from Asia compared to their neighbours on the continent.
Historically, freight rates to North Europe and the UK have been the same, but new data from ocean freight rate benchmarking platform Xeneta shows the huge premium UK firms are now having to shell out for, both for short- and long-term contracts.
As of mid-February, the short-term market costs an average of $15,350 to get a container from Asia to the UK, a figure which has not been under $15,000 since September last year.
Shipping into a port south of the English Channel saves shippers more than $950 per container, as spot rates from the Asia to North Europe have never passed the $15,000 per feu mark.
On the long-term market, the premium for going to the UK has jumped considerably as long-term rates to the UK rose by close to $2,000 per feu in the new year, while those from Asia to North Europe only increased by $200, Xeneta data shows.
Rates for long-term contracts signed in the past three months stand at $11,359 per feu from Asia to the UK and $9,408 for those going to North Europe.
Last month, the British International Freight Association (BIFA) sent a letter to the UK government asking it to investigate the state of competition within the current container shipping market.
Historically, before containers, break bulk rates were always higher for the UK compared with the continental trades, so there is a context for the current situation.
Add to that the crippling cozts to put a vessel into UK ports compared with European ports and it is logical that there should be higher rates for Blighty.