Port congestion balloons box rates on South Korea – Russia trade
The Japan International Freight Forwarders Association has announced that in 2021, container trade between South Korea and Russia has been sharply increased, mainly driven by the transportation of auto parts and components, as well as chemical products.
Containers were carried on the so-called Siberia Land Bridge (SLB) owing to shipping space shortages between Asia and Europe, according to JIFFA, while freight rates on the route also surged.
Containers moved from Busan to Vladivostok and Vostochny in January-November jumped nearly 50% from a year earlier to 81,200 TEU.
“As a consequence, there was ship and freight congestion at the Russian Far East ports, which acted as factors behind rises in freight rates,” explains JIFFA.
At the beginning of the year, the cost to move a container from the Port of Busan to Russia was approximately US$1,100 per TEU, but in mid-December, the rate reached a record high of US$6,000 per TEU, increased by almost six times.
Although container movement between these two countries tends to slow in winter due to freezing, as the efficiency of container loading and unloading is also down, freight rates are projected to remain high, according to JIFFA.