Shipping costs remain a major challenge for the solar industry – pv magazine USA

The solar industry will face high shipping costs and supply disruptions for at least a year until the global ocean freight system begins to normalize.

Of pv world magazine

New figures from Dutch financial services provider Rabobank show shipping container shipping costs fell from a record low in September 2021. However, they are still up to five times higher than in 2019 and the group banking has warned that it does not see a return to pre-pandemic lows on the horizon.

Due to pandemic-related disruptions, international container freight rates have increased significantly since January 2019, reaching an all-time high of nearly $10,400 in September 2021. In June 2022, the Global Freight Rate Index s amounted to nearly $7,100.

Higher transportation costs and supply chain disruptions affect all industries, but solar PV is one of the hardest hit due to the high concentration of solar panel manufacturing in China. High transport costs and shipping constraints also affect other system components such as trackers, inverters and batteries.

Rabobank states in its “Global Ocean Freight Outlook“that containerized freight prices will continue to gradually decline over the next 12 months from the ‘irrational’ highs reached late last year. However, he said he did not expect that ‘they’re back to pre-pandemic lows.

Viet Nguyen, a RaboResearch global supply chain analyst, said shipping container prices are “never” expected to return to pre-pandemic lows of around $3,000 per container. However, Nguyen predicted that they will rise from the current level of $7,000 to $78,000 per container brand in the coming year.

Nguyen said several global “macro drivers” influence the dynamics of shipping. As increased inflation and historically low levels of global consumer confidence put downward pressure on ocean tariffs, Nguyen said tariffs were being supported at higher levels by imbalanced global trade flows, which are hampering a profitable repositioning of empty containers.

“On top of that, geographic uncertainties add risk and there are also rising operational costs for the sector due to higher energy costs and sustainability regulations,” he said.

While shipping rates are expected to drop, Rabobank expects container schedule reliability to also recover, albeit slowly. Port congestion, a major contributor to the pursuit supply disruptionsis expected to remain in major ports until the first half of next year.

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