Experts Forecast 100% Increase in Maritime Freight Costs

Rising volumes of Chinese manufacturers relocating their operations to benefit from nearshoring are driving up shipping costs in Mexico, with maritime freight expenses expected to nearly double in 2024 compared to 2023, according to logistics firm MTM Logix.

Globally, average maritime freight costs started the current year on an upward trend, primarily due to attacks in the Red Sea, with the market operating in cycles dependent on a fragile and unstable economy. "However, other factors are now impacting the sector, suggesting a new increase in rates of around 10% throughout the year, while for Mexico, this could mean an increase of nearly 100%," Mario Veraldo, CEO, MTM Logix, told El Economista.

Veraldo noted that the time required to transport containers from China to Europe has increased by around 50% as a result of the attacks in the Red Sea, reducing the availability of containers and ships worldwide.

Serious congestion problems have also arisen at key transshipment ports in Southeast Asia.

The Platts Container Rate 25, from Southeast Asia to the East Coast of North America, was assessed at US$5,450 per 40ft container on May 6, 2024, a historic high since the assessment was launched earlier this year. On the same day, the corresponding rate from North Asia to the East Coast of North America was US$5,900, an increase of US$700 in the month.

Veraldo explained that factors such as the strength of the Mexican currency and the increase in volumes of Chinese manufacturers seeking to benefit from relocations are contributing to an increase in shipping costs in the region. At the same time, Chinese companies are increasing volumes shipped to Mexico and Brazil, to benefit from the nearshoring momentum, which, along with the distance, increases pressure on empty container returns, creating a deficit and thus an increase in rates.

On average, in 2023, a container with sneakers from Asia to Mexico was transported for US$2,000, but now the price reaches US$5,000, reported El Economista. This represents an increase of 150%. However, for a 40ft container containing approximately 8,000 pairs of sneakers, the impact on the cost per pair is US$0.37 or less than 1% for a product that costs US$50.