Ocean Freight Rates Fall From Historic Highs

There has been a decrease in freight rates for both transatlantic and transpacific shipping, from historic highs which were achieved during the pandemic and beyond. EPS News reports that prices are still higher than they were last year however, despite the recent fall in demand.

The falling prices are impacting the containership charter market, with some US-based carriers cancelling some October sailings. The change in demand is being blamed on the wider global economic downturn, which has seen consumer demand and manufacturing output slow down in recent months. 

However, hopes that the global supply chain issues are beginning to resolve themselves have not materialised in many areas. This has not been helped by threatened and/or actual dockworker strike action in both the US and the UK. 

It is still believed that total import volumes to the US in 2022 will overtake the 2021 volumes by 1.2%, and are a whole 12% higher than in 2019.

Chris Jones, EVP, industry and services at Descartes, told EPS News: “While down slightly from August 2021 and July 2022, the August numbers show that the U.S. economy, inflation and high fuel costs still have not had the anticipated adverse effect on container import volume.” 

He added: “The continued shift from West Coast ports and higher overall volumes are lengthening delays at major East and Gulf Coast ports and keeping the number of ships waiting on the water high, which will prolong the unpredictable nature of global supply chain performance.”

Furthermore, The Lodestar reports that although there is some nervousness among ocean freight transporters, the long-term outlook is still very healthy. An industry contact told the publication: “Freight rates and charter hire rates are still far higher than before the pandemic and I can’t see either falling to those levels again.”

However, those in the consumer goods and machinery shipping trade will be keeping a close eye on the situation, especially as the run up to Christmas is traditionally the busiest ocean freight transport season.