Container shipping rates between the US and China continue to rise sharply according to data from freight-tracking firm Freightos.
Shipping costs have recently reached $20,000 compared with only $4,000 a year ago, The New York Times reported.
This has led to boats diverting from other routes to secure more lucrative trade routes and thus creating route congestion.
US ports have also seen huge blockages due to ships being backed outside port regions as well as empty shipping containers not being moved back to China fast enough.
However, US Federal Reserve officials have called on industry workers to not panic as it believes the fast price gains will probe to be “transitory”, but have also stressed that supply chains are under a cloud of uncertainty and they don’t currently have an idea as to when prices may regulate again.
Chief economist at Flexport Phil Levy subscribes to a different view however, claiming that he is not in the ‘transitory camp’ but in the ‘we have reason to be concerned’ camp.
The global shipping industry has suffered a number of issues in the last 18 months, with the pandemic disrupting supply lines and the Ever Given incident which is rumoured to cost traders a whopping £4.35 billion.
Experts have also warned that ecommerce retailers will feel the effects for months to come.
“It’s a bigger problem than just delays for internet shoppers, however; the German insurer Allianz says the canal’s closure could reduce annual trade growth by 0.2 to 0.4 percentage points,” ParcelHero head of consumer research David Jinks said.
“It estimates the blockage could cost global trade $6 billion to $10 billion a week.”