Ocean freight prices are on rising trend, and are influenced by a mix of global issues. There is the Red Sea crisis, significant ports being clogged across ports in the Middle East and Asia, an inconsistency in the repositioning of containers as well as a shortage of containers that are empty in Colombo as well as the Gulf region, as well as a booming container demand are the main reasons.

The Drewry Index has doubled year-over-year during the calendar year currently in effect. The week that ended June 6, Drewry’s overall index registered an increase of 12% of $4,716 per 40 feet container. This is an increase of 181% from the previous week. In comparison, the rate exceeds 232% the average pre-pandemic rate of 2019. Standard freight rates from Shanghai across the globe are also seeing significant growth.

Drewry anticipates another rate increase for freight from China due to the earlier peak season’s beginning. Indian research company Prabhudas Lilladher notes that June 2024 spot prices have risen to three-to-four times amounts of $6,000-$10,000 for a 40-foot container. Shipping companies, like Maersk has shifted their annual EBITDA projections for CY24 to increase to 50-75%. They attribute this to the continued market demands and the disruptions caused by the current Red Sea crisis leading to an increase in port congestion as well as more expensive freight rates. Maersk believes these developments will boost financial performance by the second half of 2024.

Source: indiashippingnews.com