Freight rates drop on popular shipping routes in sign that supply chains normalise soon
Freight rates are starting to drop on some of the world’s most popular shipping routes, new data has found.
According to the South China Morning Post, the spot rate for shipping a 40-foot container from China to Los Angeles has dropped by 51% from $17,500 last month to $8,500.
Online shipping marketplace Freightos also notes that shipping costs between Asia and the US dropped 16% last week, the first significant dip since August.
Bloomberg reports that investors are taking notice with shares for container lines large and small stumbling in recent days, having reached annual peaks in September.
However, transpacific freight costs are still about four times higher than they were for the same period last year and more than 10 times higher than pre-pandemic levels.
Despite staff shortages and congestion headaches, UK freight forwarders and logistics operators are more optimistic than at any time in the past six years, reports the Loadstar.
The new report from Barclays and BDO, found the Logistics Confidence Index has risen to 62.5, its highest since the first half of 2015, as firms believe that the worst of Brexit and Covid-19 may be behind the industry.
Others are less optimistic with maritime consultant Drewry warning the Loadstar not to expect the supply chain crisis to normalise before the end of 2022.
Although it expects spot rates to decline next year, it is forecasting “a significant increase in contract pricing, leading to an increase in average global pricing of about 6%”.
It has also upgraded its forecast for combined spot and contract rates for 2021 to a year-on-year increase of 126%, up from 47% forecast in June.
Supply chain options
Congestion crises continue to plague UK ports, however, with two of the UK’s major ports closing their gates to some empty container flows.
Lloyds Loading List reports that the Port of Felixstowe suspended the return of Evergreen, Maersk and CMA CGM empty containers.
The company also advised that London Gateway put an embargo on Hapag Lloyd and Maersk empty container restitution.
Source: Institute of Export & International Trade