The ongoing cargo crisis around the world is causing impediments to global trade and a shortage of containers and equipment. In turn, an increase in the container and freight rates are keeping suppliers and logistic providers apprehensive.
Within the next week alone, freight rates from China are expected to rise, as the disruptions in Asian ports, especially in Singapore, are struggling to meet demands. In Singapore, the figure of ships in-waiting had increased drastically from 600 in April to 1,000 in May. Undoubtedly this is expected to increase the lead times for deliveries which could further hinder the process.
HSBC Global Research predicts the demand from peak season could pose a downside risk for container freight rates in the second half of 2024. As of May, container rates had shown an upward trend, surging from $1700 to $3200 per 40ft high cube container, an 88% leap from average prices in China. The Head of DHL Global Forwarding Americas, Goetz Alebrand, foresees that freight rate inflation will barely cease by early 2025.
According to Christian Roeloffs (co-founder & CEO of Container xChange), the situation is dire and expected to worsen beyond the month of June. Even more concerning is that the freight rates are akin to those seen during the pandemic with the potential to triple in coming months.
Current turbulence in the Red Sea is causing further implications impacting Mediterranean and Far East nations.
