Shortage of container supply has resulted in exorbitant shipping costs.
KOTA KINABALU: Sea freight charges from China to Kota Kinabalu has increased by a staggering 300 per cent since last year due to the shortage of container supply in China.
Shipping costs for a container from Guangzhou, China has increased from approximately USD800 in 2019 to between USD1,000 and USD1,800 last year. This year the freight rates has shot up to USD2,200 per container.
NCT Group director Tobin Ng said the exorbitant freight charges may persist until the end of this year or early next year.
NCT Group is Sabah’s largest forwarding and shipping company with 40 years of history in the business.
He said most containers from China were shipped from Guangzhou to Sabah.
Since last year, he said China has been experiencing a shortage of container supply, which caused freight charges to surge.
Ng said China was one of the world’s largest exporters which shipped out goods as far as Europe, United States and other countries across the globe.
However, he said the Covid-19 pandemic has resulted in the delay in the return of containers from United States and European ports to China, thereby causing the shortage of empty containers.
“Consequently, the price of containers and freight charges continue to surge since last year.”
He said the shipping costs of a container from Guangzhou, China to Sabah has increased by 300 per cent from USD800 in 2019 to USD2,200 this year.
He pointed out goods and foodstuff imported from China would subsequently be more expensive due to the soaring freight rates.
Ng lamented that forwarding and shipping companies were also under pressure as they had to pay the freight charges in advance, and therefore required their clients to pay a deposit.
To another question, Ng said the shipments from Guangzhou to Kota Kinabalu has decreased from eight shipments to four shipments a month.
“Since the Covid-19 outbreak, the shipments from China has reduced by about 20 to 30 per cent, which is possibly caused by less demand.”
Ng, who is also the director of E Post courier service, said many Sabahan consumers have turned to online shopping from Taobao and other e-commerce platforms in recent years.
“As freight charges increase, the same item that cost RM12 per kilogramme (kg) to deliver to Kota Kinabalu may cost RM30 per kg now.”
Under such circumstances, he said many consumers opted to purchase from local e-commerce platforms to save on courier charges.