Ocean Freight Market Outlook 2022-2024

Ocean Freight Market Outlook 2022-2024. When governments worldwide had to put lockdowns in place because of the pandemic, there was no demand for goods from other countries. In response, shipping companies cancelled trips (called “blank sailings”) and took many of their ships out of service.

But 2020 was a year with two very different halves. The first half was dominated by a severe trade contraction in which carriers skipped a record number of sailings (up to 30% on some trades). Conversely, the second half saw a cargo demand recovery on a scale that had never been seen before.

Since fewer services were on the market, the world’s carriers were not ready for a big increase in demand. The trips stopped when the tests of staff comes positive for COVID-19, which brought up more problems.

Ocean Freight Market Outlook 2022-2024 | Overview of Freight Market Update 2022

People are hoping that the freight rates will be fix in 2022 and will go down by 30–40%. Most importantly for the importers, freight rates are going down, which is good news. Thus, they will have the rates you would have probably seen back in 2019.

Let’s think back to how things were in the past. In 2020, many factories stopped making things or stopped making things for a longer time. The rise in demand totally stressed out the Shipping agents. With the especially rise in e-commerce, more problems came up.

What to expect in transportation and logistics in 2022?

  1. More ships

More ships will join to the world’s fleet in 2022. The fleet grew by 3% in 2020 and 4.3% in 2021. The fleet will grew by 4.5% in 2022 according to the expectations. Fleet will grew by 7.5% in 2023 according to the expectations and it will be the biggest rise. 22 big container ships from COSCO Shipping, CMA, OOCL, and MSC will launch in 2022 at least.

On the other hand, Thailand wants to start new container lines so that it will order several containerships by 2025.

  1. Port congestions

Even before the Ever Given hence got stuck into the Suez Canal, ports, especially the ones with the most traffic, were somehow all the time busy.

For example, as many as a hundred ships were waiting their turn on the West Coast of the United States, which was way more than the ports could handle all at once.

Low port capacity is caused by a lack of workers and the fact that ports aren’t set up to handle many ultra-large containerships. Freight ships that stay in port for more than five days

  1. Not enough staff

There are a lot of jobs which are available in the supply chain, from warehouse managers to truck drivers (especially in places of US and the UK). The situation gets even worse when people can’t move around.

  1. Putting up the prices of fuel and shipping

Raw materials make transportation work, and crude oil and natural gas prices have been going up for the past six to seven years. Logistics are important to many businesses, and businesses lose money when there are problems in the supply chain.

The average price of bunker (fuel for ships) went up by 74% in just one year. An empty truck with a fuel tank is yet the finest way to save money. But all these trucks are not at all ready to send out if it is necessary.

This way, collecting data and planning the best transportation routes are important.

Freight rates could go back to normal by 2024

Drewry thinks container freight rates could go down by 40% over the next ten years. This is because it believes the market will go through many ups and downs before stabilizing in 2024.

James Kyritsis, a senior consultant at Drewry, said these things in London at the UK Ports Conference 2022 by Waterfront.

Recently, high inflation has been a drag on the economy. At the same time, Kyritsis said, the emerging war between Russia and Ukraine had fully led to higher prices for different goods. The consultant said that the current market could help companies keep their rates high and give commodity exporters opportunities.

During the summer of 2021, freight rates reached their highest point, more than four times before the pandemic.

Predictions for shipping in 2022-2024 – Conclusion

In the end, freight rates will not be the same in 2022 as in 2019, but they will be more stable, making it easier to plan to ship. Most likely, in 2022–2024, we will:

  • Shipping was held up a lot before the Chinese New Year.
  • More places to ship
  • Port congestions
  • You can rent more containers
  • Not enough staff
  • More ships
  • Raising fuel prices

Read More:

Supply Chain Issues 2022

COVID Supply Chain Disruption Examples: A Detailed Overview

Global Supply Chain Nightmare Near Make-or-Break Point for Easing in 2022

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Examples of Intermodal Transportation, How they work and their Impacts

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