Ocean freight rates may return to pandemic times

Ocean freight rates have risen significantly over the recent weeks. This has sparked fears among freight forwarders and shippers that ocean freight rates are likely to return to the exorbitant levels seen during the COVID-19 pandemic.

According to the FreightOS Baltic Index (FBX) released on 12 July, the Global Container Freight Index stood at USD 5,181, up 4 percent from the previous week. China to Northern Europe rates rose by 3.4 percent to USD 8,632 per 40-foot container.

The Drewry WCI also recorded a significant increase. The index rose by 10 percent to USD 5,868 per 40-foot container in the first week of July, 300 percent higher than in the same week last year. The rates on the route from Shanghai to New York spiked by 17 percent to USD 9,158, while those from Shanghai to Los Angeles by 12 percent to USD 7,472 at the start of the month. The rates on the route from Shanghai to Rotterdam rose by 10 percent to USD 8,056.

If shippers continue to frontload imports in anticipation of further rate hikes, and carriers do not address congestion issues by diversifying their port calls, rates could continue to rise, says Peter Sand, Xeneta Chief Analyst.

Source: trans.info