London – The increasing volatility in freight rates caused by the Iran war is not comparable in scale to the extreme freight rate inflation of the Covid period, analysis from Drewry Shipping Consultants shows.
According to Drewry Container Freight Rate Insight data updated yesterday, spot ocean on East-West and North-South routes at the height of the Covid shipping disruptions in 2020 were both much higher and more volatile than what has just been experienced by typical spot market shippers in the first month of the Iran conflict.
“Unlike the airfreight market, the container shipping market has not seen a significant fall in capacity after the start of the Iran war, with the exception of capacity to and from the Gulf,” said Philip Damas, Head of Drewry’s logistics practice. “Therefore, we believe that the increase in ocean rates on non-Middle East-connected routes will be manageable and shippers should not panic,” he added.
Drewry Container Freight Rate Insight data shows that, on Middle East-connected routes only, ocean rates are undergoing Covid-level volatility and currently even higher freight rates – see chart. Even then, rates may soften as some opportunistic pricing adjusts.
On all routes, Drewry cautions beneficial cargo owners that timely rate data and market insight are crucial to managing rising bunker surcharges costs. With superior market intelligence and bunker policies, they can better anticipate and contain fuel surcharges and ultimately mitigate overall rate increases. Drewry has recently launched a BAF forecasting service which helps shippers budget their spend.
Full benchmarking data on spot ocean freight rates are available to shippers with access to Drewry Container Freight Rate Insight. Combined with Drewry’s renowned ocean data products, shippers are fully equipped to negotiate the most-economical solutions for their freight transportation budgets.
(Images from Drewry)