The logistics sector continues to perceive an improvement in ocean freight, and these are finally beginning to register costs similar to those reflected in pre-pandemic times, as reported by the Baltic Dry index, which is responsible for measuring the current costs involved in the transport of goods through container ships globally. The drop in such freight rates has not left the industry indifferent, since these continue to decline for more than 27 weeks, which undoubtedly represents an opportunity especially for small and medium carriers.
With respect to the decrease in shipping costs, this service has gone from quoting about 10,000 dollars a little over a year ago to costing about 5,000, something that was practically unthinkable at the beginning of 2020, when the pandemic was just beginning affecting the order in shipments and wreaking havoc not only on people’s own health, but also by dramatically altering supply chains around the world.
Ocean freight rates continue to fall due to global inflation and decrease in Covid-19
In addition to the war between Russia and Ukraine, there are two key factors that have led to this decrease in ocean freight costs, global inflation and the more than notable decrease in Covid-19 cases. The world seems to return to normal in some aspects and that of supply chains seems to be one of these, however, it is necessary to emphasize that there are still certain challenges to overcome as a result of the aftermath caused by the aforementioned events.
Although the decline in container demand has been a respite for many transport companies, there are challenges to overcome such as those added costs resulting from previous orders, as well as the congestion that still suffers important maritime routes in Asia, which is one of the main exporters of merchandise today.
Added to this, delays in the shipment of containers continue to be a bitter reality for the logistics sector, since 38% of ships do not arrive at their respective destinations in the expected times as reported by Jordi Espin, general secretary of Transprime and executive of the European Shipper’s Council.
That said, and even having these positive data, we will have to wait for what the future holds with respect to the costs in ocean freight in the context of the conflict between nations, tense relations between Taiwan and China, in addition to the current regulations to the logistics sector that is being carried out by the United States and the European Union. Contact us and stay tuned for updates.
“Semar: sea freight prices fall and logistics recovery advances.” The Economist
“Shipping prices continue to fall, yet another sign that a global recession is coming.” World Energy Trade
“The cost of maritime transport falls due to the lower demand for goods”. The Vanguard