Since the drop in freight rates from the Far East to the US West and East Coasts in November, spot rates on these trades have remained flat. This softening, which came at the end of the traditional peak season, still left rates at extremely high levels. Further drops can be expected after the Chinese New Year, though rates will remain high until the congestion problems are solved.
“Pre-pandemic, the delta in spot freight rates for imports from the Far East to the US East and West Coast was pretty steady USD 1,150 per container. Then Covid-19 came around, at first sinking it to half that level in Q2-2020, before doubling it to USD 2,260 since November 2021,” said Peter Sand, Chief Analyst for Xeneta.
With long-term bids currently coming in at record high levels, 2022 is shaping up to be another uncertain year. Pre-Chinese New Year demand and continued congestion keep the spot rates elevated. At the same time, carriers enjoy an upper hand in the ongoing negotiations for long-term contracts with large jumps from levels compared to the start of 2021.
Due to high consumer demand, port congestion may take longer to clear ahead of the Chinese New Year. China's zero-tolerance Covid policy coupled with global pandemic restrictions continue to put pressure on the supply chains— impacting capacity and ocean freight rate trends.
Reflecting on the state of the market from previous years, shippers are redefining how they manage their logistics. Securing the lowest possible price has now become a secondary requirement as shippers have shifted their focus toward building a resilient supply chain that ensures timely delivery of goods.
How will long-term contracts, existing port congestion and reliability issues impact Q1 2022?
Join our 'State of the Ocean Freight Market' Webinar LIVE on Tuesday, January 18, with Peter Sand, Chief Analyst at Xeneta, to gain insight on the global supply chain and freight rates trends in 2022's opening act.
Webinar highlights & what you'll learn:
- Takeaways from 2021—a staggering year in container shipping
- Ocean freight rate trends due to new Covid restrictions
- Effects on global capacity during Chinese New Year
- Rate analysis on major corridors
- Live Q&A
Register today to save your seat!
January 18, 2022 | Session 1 | 9:00 AM EST / 15:00 CET
January 18, 2022 | Session 2 | 3:00 PM EST / 21:00 CET
Meet the Speaker
Peter Sand, Chief Analyst, Xeneta
- Over a decade of experience analyzing commercial markets based on the global economic situation and its influence on trade at BIMCO
- Sand is regarded for his widely-read articles, industry insight and regular appearances on global news networks such as CNN, BBC, CNBC, and Bloomberg throughout his career.
- Master's in Economics from the University of Copenhagen
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