Global port congestion, high shipping rates to last through 2023: executives
SINGAPORE — Global port congestion is expected to continue at least until early 2023 and keep spot freight rates high, logistics officials said on Wednesday, urging charterers to switch to long-term contracts to manage cargo. shipping costs.
Ship delivery times have lengthened amid the COVID-19 pandemic since 2020, driving up freight costs, while the Russia-Ukraine conflict and lockdowns in Shanghai have added to supply chain disruptions This year.
“We believe that the current congestions, not only the ports but also the landside infrastructure, will be there until at least the first quarter of 2023,” said Peter Sundara, global ocean freight product manager for the global logistics division of Visy Industries.
Although more vessels could be added to the global fleet next year, this does not mean that freight rates will drop significantly as it depends on how shipping carriers allocate increased vessel capacities, he said. declared at the S&P Global Platts Bunker and Shipping Summit.
Eric Jin, head of investment support at industrial equipment supplier BMT Asia Pacific, said rising shipping costs, longer transit times and higher uncertainty will be the “new normal” for the shipping industry.
Spot charter rates have held steady so far this year, with supply chain disruptions and port congestion affecting vessels globally, particularly in the United States and China.
Leaders recommended that charterers sign longer-term contracts with shipowners to overcome issues of cost volatility and availability.
It’s “no longer about going for three months or six months, a month, not even a year, but two to three years…because we want cost certainty and space certainty,” said Sundara.
BMT’s Jin said more than 60% or 65% of shippers remain on spot rates.
“It means they are not taking action to deal with the new situation, it means they are exposed to full supply chain risks,” he added.