Aerial view Large RoRo (Roll on/off) carrier vessels convey cars and trucks at quayside into and out of the world market.

(Getty Images)

CAR-GO

China’s booming car-export industry has driven shipping rates to record highs

…but now rates are falling at last.

12/11/24 9:36AM

There’s probably never been a better time to be in the business of shipping cars across the world than the past couple of years, with freighters carrying 6,500+ cars earning as much as $115,000 every day as recently as March, data from Clarkson Research Service via Bloomberg shows.

The ultra-lucrative period for companies in car cargo might be coming to an end, though, as the international vehicle-carrying fleet continues to grow and begins to outstrip demand going into the year ahead.

Car shipping rates chart — Sherwood News

In November, earnings for car-carrying ships fell to $95,000 a day — obviously a still substantial figure and way above the prepandemic 21st-century peak, but the first time that the rate has fallen below $100,000 a day since September 2022.

Interestingly, the heightened rates — and the short supply of car-carrying vessels that bore them — saw Chinese EV giant BYD decide to get into the vehicle-shipping business itself, with the first ship in its fleet (the BYD Explorer No. 1) embarking on her maiden voyage at the start of 2024, when daily shipping rates hovered around the $115K-a-day mark.

Chinese companies have been behind much of the explosion in demand for shipping as the country has swiftly ramped up its own production and distribution capabilities, becoming the world’s largest exporter of cars this year, thanks in part to its booming EV industry, which sold 1.7 million vehicles abroad in 2024.

Zooming out: Even with the threat of tariffs, the sheer volume of stuff we’re shipping across oceans has been hitting record highs this year.

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American Airlines joins the flock, hiking bag fees amid higher jet fuel prices

American Airlines on Thursday announced that it, too, will be hiking the fees it charges customers to check luggage.

With the move, all four of the major US airlines, which together control about 80% of the US market, have now hiked their baggage fees in recent days amid surging jet fuel prices.

The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

Since late March, JetBlue, Delta Air Lines, United Airlines, Canada’s WestJet, and Southwest have hiked their fees. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.

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The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

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Less than a year after implementing them, Southwest is also hiking its bag fees

Southwest Airlines has joined the growing list of airlines opting to hike their bag fees amid sustained higher jet fuel costs.

Starting today, the first checked bag at the carrier — which implemented bag fees less than a year ago — will jump from $35 to $45, and the second from $45 to $55. Southwest quietly disclosed the change Tuesday.

Southwest assigned the decision to “part of an ongoing analysis of the business and against the evolving global backdrop.”

As of Wednesday, jet fuel prices dropped to $4.16 a gallon, per the Argus US Jet Fuel Index, down from $4.81 on Tuesday following President Trump’s ceasefire announcement, which sent travel stocks soaring. Major airlines have shed some of those gains in premarket trading Thursday.

With the move to hike bag fees, Southwest joins JetBlue, United Airlines, Delta Air Lines, and Canada’s WestJet, all of which also boosted fees this month. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.

Three US airlines have already hiked baggage fees. More are likely on the way.