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Freight costs edge toward 4% of solar module costs, near pre-pandemic levels

Freight costs fell for the 39th straight week to account for roughly 4% of solar module costs – close to pre-pandemic levels. PV consultant Asier Ukar tells pv magazine that this trend will likely continue over the short term.

Freight costs have fallen significantly in recent months and are now approaching pre-pandemic levels, according to Drewry, a UK-based consultant for the shipping industry.

The company’s World Container Index (WCI) shows that freight costs fell by 7% this week, for the 39th consecutive week of decline, and by 74% from the same week in 2021.

“The latest Drewry WCI composite index of $2,404 per 40-foot container is now 77% below the peak of $10,377 reached in September 2021,” said the consultancy. “It is 36% lower than the five-year average of $3,768, indicating a return to more normal prices, but remains 82% higher than average 2019 (pre-pandemic) rates of $1,420.”

Asier Ukar, the managing director of PI Berlin S.L., told pv magazine that container shipping costs ranged between $1,500 and $2,000 before the pandemic. “At the peak of the pandemic and post-pandemic, it reached $20,000,” he said.

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Freight costs currently represent about 4% of a module’s total costs, he noted. In August 2021, panels cost around $0.27/W and their share of free-on-board (FOB) module pricing was around 20%.

“Shipping costs now more or less $3,509, which means more or less around $0.01/W for a container with 620 modules with each a capacity of 400 W,” said Ukar. “Due to the Covid-19 crisis, most of the ports in the European Union and the United States were congested and the containers did not arrive at the port on time, which led to a reduction in the quantity and a consequent increase in prices.”

He adde that he does not expect shipping costs to rise in the short term.

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Source: pv magazine