In just over five weeks since the end of April, freight rates on European routes have surged by over 70%, and those on the US West Coast have risen by nearly 60%, exceeding the increases seen during the height of the COVID-19 crisis. During this period, the frequency and magnitude of freight rate increases have almost matched the frenzy of the 2020/2021 pandemic period.
Moreover, with overall cargo volumes rebounding in Europe and the US, and several ports facing container shortages and congestion, short-term market freight rates are feared to continue rising until June.
However, analyses from shipping companies and research institutions indicate that with the launch of numerous new vessels and additional shipping capacity, the newly added capacity in the first half of the year is sufficient to meet the demand for detours. Concerns about oversupply of capacity are emerging in the second half of the year, with high freight rates expected to gradually decline as early as July and as late as October.
It is understood that with both freight rates and capacity on the rise, the shipping industry currently holds the upper hand in a game where risks and opportunities coexist. The industry estimates that the turning point may come in the second half of the year.
Post time: May-28-2024