Ocean Shipping Costs Add To Supply Chain Industry Woes


If you check out most dealerships, you would discover that they are void of new cars. This is an apparent pointer to the fact that the industry has not recovered from the effect of the pandemic. Now that the industry seems to be stabilizing, the rise in ocean shipping costs has led to another industry unease.

Earlier this year, the production of new vehicles was delayed because of the semiconductor chip shortage. This did not improve till May when production resumed in trickles. Simultaneously, the demand for new vehicles was on the rise. That was a sigh of relief following the long dark days where the demand was low.

The rise in ocean shipping costs is good news for ocean freighters. Freighters who move cars and machines across the globe have had their earnings surpass a long-time record. At the moment, the income of freighters has surged to about $80,000 daily. 

According to Clarkson Research Services Limited, this is the highest the industry has ever recorded since 2002. Unfortunately, the automotive supply chain has been badly affected by the change. 

Causes Of The Rise In Ocean Shipping Costs

The reason for the surge in ocean shipping costs is not far-fetched. The rise in cost is a result of a shortage in the number of available ships. Usually, cars are transported using “roll-on, roll-off ships”. These ships are usually handled by expert carriers. 

Unfortunately, as a result of a stagnating vessel fleet, coupled with the post-covid-19 increase in demand, record rates for ships have increased. This increase in record rates primarily affects all ships that convey as many as 6500 cars across the globe.

The industry will be greatly affected by this change, since seaborne cars occupy a fraction of core activities. Interestingly, companies like Ford Motor Company and General Motors predicted a dreary outlook in recent months. 

These companies made their prediction due to the slowdown in production, as a result of the shortage of semiconductor chips. However, given the recent development, they seem to be very accurate.

Effect Of The Increase In Ocean Shipping Costs On Automobile Companies

Following the statistics from Clarksons data, Bloomberg was able to come up with an estimate of shipping cost per vehicle. According to Bloomberg, shipping a car over a 60-Day voyage will cost about $740 per car. This is almost five times the ocean shipping costs before the pandemic.

Amidst these developments, several automobile companies have been worried about how their companies will be affected by the ocean shipping costs. In a phone call with Georg Whist, the CEO of Gram Car Carriers ASA, he disclosed some in-house information.

According to Whist, several companies are worried about being able to secure ships to haul their vehicles. In his words, “People are concerned they can’t get hold of tonnage.” Continuing the conversation, he said, “It’s underinvestment for many years, and when demand is still there, the day comes when it pops.”

Amid the stagnating fleet which led to the shortage in ships, imports are not reducing. In the report, Clarkson’s data made it known that the US, UK, and Europe are one of the largest import markets. On the other hand, the bulk of exports is from China. Hence causing a further expansion in the fleet. 

Despite all the happenings, Gram carriers announced that it signed a five-year deal. According to the company, the deal instructs that they hire out each vessel at an average of $60,000 daily.

In reaction to this announcement, Fearnleys securities analysts tag it as a sign of “mind-boggling” rates. Further validating the analysts, the company’s shares rose by 15% on Tuesday. Within the space of 24 hours, it had risen by another 6% as of Wednesday.

Gram is not the only one with an increase in share price. Companies like Hoegh Autoliners ASA and Wallenius Wilhelmsen ASA have increased in prices as well.

Metti International is Here to Help

Despite the numerous challenges facing the shipping industry, you can ship your car with Metti International. Our commitment to serving our clients better and meeting all car shipping needs soars even higher. Metti International is your professional and reliable car shipping broker. We are a licensed and bonded car shipping broker with the Federal Motor Carrier Safety Administration.Our track record of excellence earned us the BBB Torch Award For Ethics four times.

The challenges in the automobile industry have tested our commitment to our clients severally. Amidst the port congestion, supply chain disruptions, truck driver shortage, and other woes, our shipping delivery times have been top-notch. At Metti International, we ensure safe and smooth car shipping across the 18 counties in the US. Furthermore, we ensure that we only use carriers with 98% or higher service ratings. Consequently, your car is shipped with utmost care and the stress is taken off you. RORO services are currently unavailable at most ports but, you can reach us for all assistance in your overseas containerized auto shipping

Contact Metti International today at 866.620.1776 or request a quote online. For more information, kindly visit our website at www.mettiintl.com.


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Frequently Asked Questions

Most major credit cards, postal money orders and cashiers checks are acceptable forms of payment.

As with most transport services, a deposit is generally required when placing an order. Deposits range from 10-25 % of the total shipping cost. The remaining balance will be due upon delivery.

Most auto transport companies accept cash, certified checks, and postal money orders.

Coast to coast trips usually takes between 10-14 days. Shorter trips ranges from 3-7 days, depending on the actual distance. Some factors may delay a trip, including traffic, weather, and truck breakdowns.

Yes, we request you, or a designated person, be present upon pick up of your vehicle. For your safety and your vehicle’s safety, an inspection is performed and a bill of lading must be signed that serves as proof of delivery.

The easiest way to ship an inoperable vehicle is to let us know when requesting a vehicle transport quote. There will be an additional charge, plus loading and unloading charges to your quote, if we are not informed of the vehicle’s condition prior to quoting.

Auto carriers are not licensed to carry house goods or personal items, these goods and items are not covered by the carriers insurance. Any damage to your vehicle due to household goods shifting or breaking is also not covered. Personal belongings left in the vehicle, are shipped strictly at the owners risk. Carriers will not inventory any belongings left in the vehicle and will assume no responsibility.

Your car is insured for the Blue Book value the entire time it is on the truck. Clearly listed on your Shipping Order, Agreement and Bill of Lading are occurrences not covered. At the time of pick up, a condition report is filled out and signed by both the person turning the car over and the truck driver and you are given a copy.

Upon delivery of your vehicle, this same report is presented. You should compare the condition of the vehicle to the report thoroughly at that time. If you feel damage has occurred to your vehicle during delivery, you must note it on the report before you sign it and the driver leaves. Damage done in transit does not relieve the shipper of paying for transport service performed. Claims will be handled by the vehicle carrier and insurance companies.

Metti International offers door-to-door auto transport service where possible. However, there are instances that we cannot collect/deliver directly to the door due to the size of our auto carrier’s trucks. The size of your street may prohibit direct delivery to your door. Also, some towns and cities do not allow trucks on their residential streets. If the carrier cannot get to your door, he will deliver your vehicle to the next most convenient accessible location, such as the nearest major crossing street, a shopping mall or supermarket.

Please have a no more than 1/4 tank of fuel, remove all personal items from your vehicle and have it washed and cleaned so that the ensuing inspection is easily performed. If it is a convertible, T-top, sunroof, etc. make sure all openings are closed and prepared for changing weather. You can find additional tips on how to prepare your car for transport here.