The global shipping conglomerate Maersk noted this month that rising inflation has resulted in people spending less on “non-discretionary products such as furniture and home appliances,” which has marked a significant shift in the tide for the second half of 2022.
Following two years of success during the pandemic, when there was a high demand but, regrettably, a low supply, the freight rates had skyrocketed – more than 200% the usual rates. 2/3rd of the freight level existed during the pandemic and post pandemic times. This proved beneficial for most logistic suppliers and freight forwarders.
As most people from the industry might be aware, there has been almost a 30% decrease in international freight rates. This has been the trend for the year 2022, especially since July where the steep decline of prices has fast-tracked in September and October, and many freight forwarders are anxious to see this decline continue.
Sadly, the current situation has been a stark contrast – from the congested ports during the last two years, to ease in ports now owing to an economic slowdown. It seems as though the #covid19 related spike has now settled down globally in regards to the logistics sector. Owing to the War in Ukraine and an inflation across the globe complied with a fear of recession is the main reason for this drop.
With these new challenges ahead, most freight forwarders, shipping lines and airlines are hopeful that the 1st quarter of 2023 will bring positive changes and will help bring back the normalcy in freight prices. The optimism shared by most freight forwarders is now to keep operating the container freight, even at a lower cost to keep the traffic flow going and this should aid in regularity in pricing to return.