Freight forwarders in calmer waters
29 June 2023
Fares on the route from Asia to northern Europe are now around the same level as in 2019, the time before the COVID-19 crisis. With the peak period approaching, there does not seem to be much change in the market, even at first glance. But, more importantly for you and for us, things seem to finally have calmed down.
Shipping companies adjusting expectations
It has been signalled by shipping companies for some time that rates really cannot go down any further. Increased costs would result in having to sail almost below cost. But the container market clearly disagrees. Fares have gradually declined over the past six months to the more-than-acceptable 2019 level.
The days when container shipping companies were quoting around $15,000 ocean freight for a 40FT container at peak market frenzy thus seem to be over for good. No one foresaw that rates would fall so fast in relative terms. However, we were waiting for something to change in rates across the market. But no one predicted that we would again face prices equivalent to before the COVID crisis.
Taking a breather
Calmness, cleanliness and consistency. You know them as the three great pillars of parenting. But what they actually stand for is a fixed and predictable structure in daily life. And it feels a bit like that now in container shipping. Bookings are accepted without too much trouble and there is almost no hindrance from container shortages. And that’s despite the summer peak just around the corner.
Unlike the previous two summers, where the craziness around shortages sometimes caused sleepless nights, the coming period seems to be a bit more relaxed for everyone. Not only is everything much more affordable. Finally, the required space and offered capacity are also just about balanced. And that gives us the opportunity to maintain our high service level, even in the peak period, at the desired standard.
What effect does the peak season have?
Container rates are expected to stagnate in the coming weeks. And possibly rise slightly from certain shipping areas. This has everything to do with the slightly increasing demand for capacity as the summer peak takes hold. But it will definitely not compare to last year’s major frenzy.
A shipping region where there may be a bit more pressure is Bangladesh. There, people celebrate the end of the Ramadan period from 27 June. In advance, producers and suppliers are going all out to get as much as possible ready for departure. But despite these investments, experience shows that the aftermath can still have a detrimental effect on overall cargo transit times. So you have to factor in delayed departures from loading ports, as well as delays of transshipment cargo, which then misses the required connections in Singapore.
Wondering if your shipment is still on track? Then request your account now for TRACOS Lite and see where things stand at any time of the day.
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