The Mintec price for US apple juice concentrate (AJC) of Chinese origin rose by 13% to USD 8.65/gallon in the 7 weeks to 20th January. The price rise can be attributed to increasing freight costs between China and the US, due to a shortage of reefer containers and port delays.
The US, a significant importer of Chinese AJC, has witnessed soaring import costs, following rising shipping rates. Mintec data reports the cost of shipping a 40-foot container from China to the US has increased by 22% to USD 5,716/unit between 4th November and 27th January 2021. The increase in shipping rates, resulting from a shortage of containers has further led to congestion at ports, with shipping lines charging extra fees to compensate for lengthier waiting times.
During the first half of 2020, the shipping market observed hundreds of empty containers stranded in Europe and the US, amid COVID-19 related trade disruptions. Thereafter, the demand for Asian goods from Western markets resulted in a significant rebound in container demand, and eventually led to substantial competition among shippers for available containers.
Freight costs on routes between China and the US began increasing in the summer, with US companies responding to depleted domestic inventories and soaring online shopping orders. In response to this, the Chinese government requested shipping companies to cap their rates, which led to a brief plateau. However, since November 2020 shipping rates have once again risen, with restricted container supplies and terminals unable to cope efficiently with shipping demand.