Just 8 feet wide, 8 feet and 6 inches high and 20 feet long, a simple corrugated steel box now can cost as much as $10,000 to put on a ship and send it from Shenzhen to the Port of New York. The prices of the boxes themselves have been jumping, driven by the imbalance between demand and supply created by COVID-19.

Because of the coronavirus pandemic, container producers in most countries continue to be in a desperate situation. However, China could be the first country to experience a recovery. Hope for traders has come from the high production efficiency and low costs in China, which now produces 96 percent of new containers worldwide.

As container prices rise, so do the costs of moving them. The Freightos Baltic Index (FBX) continues to go up, and a number of shipping companies including Hapag-Lloyd, Mediterranean Shipping Company, China Cosco Shipping, Matson, and Kambara Kisen Shipping announced they are going to start a new round of hikes from the middle of June. Meanwhile, the Shanghai Containerized Freight Index last Friday jumped 44 percent from the previous week to another historic high, and more than a three-fold increase from the lowest point last year. 

No matter which index one looks at or which shipping route, global freight rates are at or near record highs – with prices increasing multiple times compared to pre-pandemic levels due to supply and demand imbalances, local lockdowns and container shortages.

Jens Eskelund, managing director of Maersk China, said that the pandemic is not the only factor behind the jump in costs. The impact of the Suez Canal traffic jam in March is still being felt. Shipping demand has experienced significant fluctuations over the past year – with very low demand in the first half of 2020 but a rapid rebound in the second half.

Strong demand for boxes, the limitations triggered by the pandemic and the Suez Canal blockage have put pressure on ports. Shipping costs have been rising since the middle of 2020. Under these circumstances, China is doing everything it can to bring them under control.

"It took us six years from 2006 to 2011 to make 1 million containers. But now it's taken us just two years to break the 5 million mark. That's pretty fast work," said Li Qianmin, general manager of Shanghai Universal Logistics Equipment. 

However, even though China keeps doing its best to produce containers, the demand is still three times as much as before the COVID-19. John Lin, an associate professor in law at Shanghai Maritime University, predicts freight rates won't peak until the end of next year, but should then begin cooling in the first quarter of 2023.