Costs for shipping goods by container will be higher in 2022 than ever before, even if spot rates soften, said Xeneta chief analyst, Peter Sand.
amely, pre-Chinese New Year demand and continued congestion keep spot rates elevated, “while carriers’ upper hand in the ongoing negotiations for long-term contracts mean these are seeing large jumps from levels at the start of last year,” said Mr. Sand.
In addition, volumes on the long-term market will grow this year as carriers want to secure revenue and many shippers want to secure capacity and “avoid the pain they have felt on the spot market over the past year. This means that even if spot rates soften over the year, the average cost of shipping this year will be higher than ever before.”
More specifically, on two of the four major trades out of the Far East, spot rates have continued to increase to new record highs. From the Far East to North Europe and to the Mediterranean, rates have risen by 6% and 2%, respectively.
From the Far East to the US, rates have risen compared to a month ago for boxes going to the East Coast, though at USD 10 700 are down slightly from their peak in the second half of December 2021.
On the other hand, Mr. Sand notes that spot rates to the US West Coast have fallen slightly in the past month, down 1% as the clogged-up ports mean importers are looking for alternative solutions.
Spot freight rates on backhaul trades have started the new year in the same way as they ended the last one, with rates falling after they peaked in May 2021 for boxes going from North Europe to the Far East and in July for those going to the Far East from the US, though they remain above pre-pandemic levels
Peter Sand explained.
In addition, while it is still early for a definitive answer on where long-term rates in 2022 will land, Xeneta believes that fronthaul rates will rise considerably.
Backhaul long-term contracts have seen a much smaller increase from January last year, as they are now averaging USD 1 300 per FEU, which represents an increase of only USD 160 from January 2021
Moreover, long-term contracts on the transpacific have been softening in recent months, though again remain far above levels from the start of last year.
There is no doubt that even if lower than the peaks of last year, long-term rates here will be much higher than in contracts signed a year ago
Mr. Sand concluded.