Maritime transport: towards a return to normal of container freight rates?

At the origin of the record profits generated by the world's large shipowners since the crisis of the Covid-19, the sea freight rates have collapsed since last month.

The SCFI index (Shanghai Containerized Freight Index), which reflects freight rates « SPOT » (cash traded) to ship goods from China's major ports to the rest of the world, confirms the trend... The price of a 20-foot container was around 2000 dollars in mid-October, compared to about 7,500 dollars in August 2021.

While the macroeconomic context is the main explanation for the collapse of freight rates, the situation is multifactorial:

• Overstocking recorded this summer by major distributors, mainly American,
• Fall in demand for manufactured goods,
• Standardization of the situation of the ports of China,
• Increasing inflation,
• Global energy crisis,
• Dollar up against other currencies,
• Multiple consequences of the war in Ukraine.

For their part, the other indices of regular lines are also falling sharply: the CCIF, which measures all container transport, including long-term contracts, the Harpex Shipping Index, which tracks the transport costs of finished products, as well as the New ConTex indices, barometers of the container charter market, and the Baltic Dry Index which reflects the trade in raw materials.

The general trend would therefore be a downward stabilization of, in particular, medium-term maritime freight contracts, which mature for many of them. We also see better respect for deadlines without returning to the transit time of 2019.

However, shipowners must absorb many additional costs: an increase in fuel prices, an increase in the price of the Suez Canal toll (cf. Suez Canal: Increase in transit fees at 1 January 2023) which will be increased again next January. Another impact is the evolution of the market towards more responsible transport and the investment in this direction by shipowners for the construction of more environmentally friendly container carriers.

To go further...

• Sales Administration (SDA) Subcontracting Export
• Import/export flow management (air & maritime)
• Diagnosis of international logistics flows

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