Ships around the world are unable to navigate through the two major canals, which are important international logistics hubs, plunging global shipping into chaos. Due to the unresolved water shortage problem, the Panama Canal in Central America is not expected to fully lift navigation restrictions until 2025. As chaos continues in the Middle East, companies are forced to abandon the Suez Canal in Egypt. It’s impossible to predict when things will return to normal.

Facing the double test of cost and delivery time

Against the backdrop of a high degree of market involution, the textile industry at this stage has long been operating at a low profit. Even in the foreign trade industry, profits have dropped a lot. The continuous rise in shipping costs in the short term is bound to further increase the rigid costs of textile foreign trade companies and compress profits.

But on the other hand, even if profits are reduced, it is better than losing money due to breach of contract. Now, because the two main arteries of global shipping are blocked, the available shipping space in the market is already tight. Even if we receive several price increase notices in a day, As long as the goods can be shipped in time, you still have to pay extra.

In the long run, the Red Sea crisis is not over yet, overseas demand is picking up, there are geopolitical conflicts in the Middle East, and there are many comprehensive factors. It is expected that freight rates will still be easy to rise but difficult to fall in the future. In the end, consumers in developed countries in Europe and the United States will pay for these high shipping costs, which may further aggravate their inflation and continue to undermine their purchasing power.

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