Why shipping rates have spiked and when might rates come down

It is no secret that there were many changes in shipping during the past few years. Ever since the COVID-19 pandemic started, the world has seen several different rules in various aspects of life. Shipping and moving are no exceptions to this rule. Four Winds Saudi Arabia offers help with logistics in Saudi Arabia, whether it be with moving, shipping, broker services, or many more.  If you are wondering why shipping rates have spiked lately, we hope that our analysis may help you reach the answer.

There is more than one explanation for why shipping rates have spiked

As you may know, the shipping rates have gone very high. This is most easily explained by the pandemic. Since 2020, there were many changes in the way companies do their business. Firstly, there was a bigger demand for online ordering. This is due to a lack of travel and lockdowns throughout the world. Secondly, there was a shortage of cargo containers due to high demand. If you are looking for experienced and affordable freight forwarders in Bahrain, remember to contact the company in person. Clear communication with your movers is key to finding what fits your needs best.

a large boat shipping cargo across a body of water
The world has seen big changes in shipping trends since 2020.

During the pandemic, there were many changes in the border control rules. It can be speculated that there was also harder to find workers in the shipping industry due to the high risks of catching the COVID-19 infection. But, this can only be guessed. Most of all, the shipping industry saw a very high rise in popularity during the past two years. This means that the workers had to adjust to the changes. Perhaps this can bring us closer to understanding why shipping rates have spiked. But, are these reasons all there is to it?

The key factors that contribute to high shipping rates

It is always important to find the most reliable Saudi customs clearance. Our team at Four Winds Saudi Arabia offers broker services to anyone interested in relocating, whether it be commercial, local, international, or any other. This means that you can find help with anything concerning your relocation, including help with the shipment. These are some of the main reasons for higher shipping prices:

  • A rise in e-ordering
  • Shipping during different times of the year
  • Worker shortage/high demands
  • Cargo container shortage
  • Global supply chain crisis

It is important to understand these challenges as best as possible. Knowing more about them may help predict the shipping trends in the next few years.

hands exchanging packages, with online orders being the reason why shipping rates have spiked
Online ordering became a massive trend since the beginning of the pandemic.

The rise of online orders

Online ordering is a big deal in the world right now. Since the beginning of the pandemic, it has seen a rise, unlike at any other time. Lockdowns have forced people to look for alternative solutions. Today, people are mostly used to shopping online. This means that shipping became more popular than ever. Big companies, such as Amazon, are continuously sending shipping orders around the globe. In case you are looking for Bahrain customs clearance, remember to look for those companies who have the expertise and can be fully trusted.

The internet is now even more popular than it was before the pandemic. Almost everything, starting with letters, personal shipments, shopping orders, etc. is being sent via mail. This created a very tricky situation for shipping workers everywhere. Not only was there suddenly more cargo than they could handle, but it was also impossible to ship everything at the right time. And this leads to some other issues, mainly the supply chain crisis. But most importantly, it leads to the rise of shipping prices almost everywhere.

The supply chain crisis and the shipping price crisis

Ever since the supply chain crisis happened, the world saw a bigger need for new solutions. Today there are plenty of fresh ideas, especially in the United States. For example, new open spaces for cargo are becoming more popular. Workers in supply chains are under pressure to learn new skills. But, it also means that shipping prices are very high. During the pandemic years, there were great delays in shipping orders. Sometimes this meant that customers had to wait for several months to get their orders delivered. The supply chain crisis was so big that it caused a rupture in how supply chains generally work. So, it is no wonder why shipping rates have spiked – it takes a lot to deliver orders.

cargo container boxes on top of each other
Shortages in cargo containers are among top reasons why shipping rates have spiked.

Do different times of the year influence why shipping rates have spiked?

Believe it or not, the price of your shipping orders does depend on different seasons. For instance, if you order something during New Year celebrations, or around Christmas time, you will get much higher rates. Ordering during winter can also affect the shipping rates, but so do many other, more busy, and complicated times of the year. A word of advice can be to think about shipping issues ahead. Ordering a few weeks or even months before due dates may be a great idea. It can save you both valuable time and money.

Cargo container shortages create more problems

New trends in shipping mean that there are some shortages in equipment. The bigger need for cargo containers leads to a shortage of them. This in turn leads to delays and multiple problems. For example, it is impossible to deliver orders in time if there are no suitable containers for them. This influences shipping rates heavily, as it takes more money just to prepare the order.

We know why shipping rates have spiked, but can we expect them to come down any time soon?

With the world going through different types of crises at the moment, the topic of shipping rates is complicated. The pandemic is looking better than before, but it hasn’t reached an end yet. The political upheaval throughout the world is looking unpredictable. This means that some other factors might influence shipping trends and pricing. But we can generally expect to see lower shipping rates in the upcoming years. Perhaps they won’t come down as fast as we would like them to, especially because they depend on outside factors. The explanations for why shipping rates have spiked were mainly connected to things that are not easily predicted. So, the next year is probably not going to be a lot different than the previous ones. With more frequent travel, maybe there will be a drop in online ordering. However, there is no telling anything with absolute certainty.

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