Breaking News

Rates will continue to rise

rates

A cocktail of border closures, boxes shortage and high costs fuels the flame

The world supply chain is hammered by port congestion and skyrocketing rates due to a massive box shortage to ferry goods. Industry observers are not optimistic about recovery.

A fatal chain reaction
Shippers are uptight about boxes’ availability and reduced to arranging their own – willingly risking losses and further delays given liners have put up disclaimers about possible voyage abortions. To date, the only country that eased its border restrictions is Hong Kong. Vessels arriving for refueling and supply replenishing are exempted from quarantine. However, it is only a minute improvement. Big carriers are reducing capacity for major routes from lack of boxes, and increased demand for goods did nothing to improve the situation. It in fact started an inflation wave from inventory shortfalls.

From another perspective, congestion turned out to be cash cow for several players; their surcharges. Shippers are not immune to premiums and loadings for their important clientele. Diversion is also a slippery slope. For vessels to unload at a location with nothing to reload and depart is a loss making move. Carriers will pass the cost to shippers. As a result, shippers might be compelled to abort the voyage.

This leads to consumers having to pay more for the same product due to short supply. Hence, the industry suffers further blows from cargo owners switching to alternative modes of transportation to keep the expenses balanced. ING Bank observed shippers of lower value products such as household items, toys, promotional articles or tee-shirts have seen freight costs increase from around 5 per cent to more than 20 per cent.

That might be an opportunity for smaller players – which collectively can meet the delivery deadlines. Cargo owners can tap into Marine Online’s network of available vessels to sustain their operations. The platform also offers competitive rates which are especially beneficial for cargo owners looking for cost savings.

 

Marine Online Media Team
Please email us at marketing@marineonline.com to contact the author for this article.

Chartering banner

 

 

 

Check Also

Steel held good prices in Bangladesh recycling yards

Despite mishaps, Bangladesh’s ship demolition market holds steady Bangladesh is leading in the ship demolition …