Are Ocean Freight Rates Falling?


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" Sea Shipping rates are finally down!" is a headline that importers and exporters long to see. Who wouldn't be excited to see a drop in freight rates? So far, 2022 has experienced significant changes in the shipping rates. The changes have been quite positive.

 Apparently, the Covid-19 pandemic is not the only reason for the rise in shipping rates. In March 2021, there was an obstruction at the Suez Canal. This happened due to the grounding of a 20000 container ship (Ever Given). With about 12% of global trade, the Suez Canal is a major trading route, and the blockage caused an impact on the global trade. Many container ships use that route. Therefore, there was a traffic jam as they could not pass to the other side. This resulted in the disruption of the supply chain hence increasing freight rates. 

From the predictions made, worse was expected for this year. Some experts had predicted that the shipping rates would keep rising, but as the nature of the shipping market is, no prediction is very accurate. The shipping market is very volatile as the rates are easily affected by any change in the world.

In 2020 and 2021, the shipping prices soared to sky-high levels. This is due to the pandemic (the Coronavirus) that, in truth, hit the world very hard. This pandemic resulted in lockdowns all over the world, thus disrupting the day to day norms in many sectors. The shipping industry was no exception as it faced challenging times. Shipping processes had to be halted due to the lockdowns causing discrepancies in the supply chain. So, what is expected when the shipping industry is hit with such hardship? The shipping rates definitely skyrocketed.

 

Are Ocean Freight Rates Falling in 2022?
Over the seven months into 2022, the shipping industry has experienced significant changes in freight rates. At the beginning of the year, the ocean freight rates were very high, but from March, a drop was experienced. 

Comparing 2022 to 2020 and 2021, the current shipping rates are way lower than they were for the two years. Comparing 2022 to 2019, the current shipping rates are higher. Well, it is safe to state that the shipping prices have declined. However, the prices are not yet at the pre-pandemic levels.