Global port congestion will last until early 2023 and keep spot freight rates high, logistics executives said, urging charterers to change to long-term contracts to address shipping costs.
As Reuters reports, the COVID-19 outbreak has lengthened ship delivery times since 2020, increasing freight costs, while the Russia-Ukraine conflict and lockdowns in Shanghai added to supply chain disruptions.
As Peter Sundara, head of global ocean freight product for the global logistics division at Visy Industries, explains “the current congestions, not only the ports but also the landside infrastructure, will be there at least till Q1 2023.”
In addition, Mr. Sundara added that while more vessels could be added to the global fleet next year, this does not mean that freight rates will drop broadly.
Furthermore, Eric Jin, head of investment support at industrial equipment supplier BMT Asia Pacific, also highlighted the rising shipping costs, noting that longer transit times and higher uncertainty will be the “new normal.”
Taking the above into consideration, executives suggest charterers sign longer-term contracts with shipowners to deal with issues of volatile cost and availability.
