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Freight rates continue to fall, and the profit margins of shipping companies are gradually shrinking

Time:2022-10-18 Publisher:Kevin Num:2390

Just like the concern about the sharp rise of freight rates before the epidemic, shippers are also very concerned about the sharp drop of container freight rates today. 

The freight rates of all major routes in the world have declined to varying degrees, with the US West route being the most serious.

In the days after the National Day holiday, the price of the U.S. - Spain route directly went from about $2000/40 HQ to about $1800/40 HQ. The price of 40 foot NOR container is more than $1100.

The latest data from Standard&Poor's Global Market Intelligence Company shows that freight rates have been falling in recent months due to the slowdown of global trade caused by the reduction of commodity demand. 

It has been pointed out that the ships on the American Spanish route can no longer be fully loaded, and only three quarters of the goods are loaded.

According to the latest research report of HSBC, the global freight rate is falling faster than expected, and the level of freight rate is expected to return to the pre epidemic level. 

It also added that with the sharp decline of freight rates, the profit margin of shipping companies will gradually shrink in the next two years.

Drewry said that the integrated transport industry is currently experiencing a transition from insufficient transport capacity to excess transport capacity.

It means that transport capacity management must become the primary task to support freight rates. Therefore, the shipping company will be forced to cancel more voyages.

In order to reduce the impact of the weak centralized transportation market on your cargo transportation, you need to communicate with your GLA freight forwarding partners in a timely manner to reduce the loss caused by shipment delay.

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