NO MORE DELAYS With the gradual return to normal of trade activities with the gradual recovery of the national and global economies, shipping costs are bottoming out.
Sea Freight costs have bottomed out as demand for goods and raw materials has dwindled amid rising consumer prices that have discouraged spending.
Royal Cargo chair and group CEO Michael Dauber, in a recent interview with the reporters, said shipping costs have significantly gone down after peaking due to pandemic-induced factors such as lack of container vessels and mobility restrictions.
Raeuber noted that the global trade had slowed down after the economy “overheated” when more activities had resumed due to the easing of mobility restrictions, translating to weaker shipping demand.
Current market volatility, such as inflation and elevated interest rates, were also pushing the consumers not to buy as much and redirect their funds into savings instead, the Royal Cargo official added.
It noted that the “war risk, skyrocketing energy costs, political instability and general inflation, all of which are now impacting overall consumer spending and thus trade volumes,” were the cause for this.
Shipping costs are pulling back from their historic highs and spot rates for ocean containers dropped 61% year-over-year, according to Freightos Baltic Index data for the week ending Sept. 23. Slowing demand in the U.S. freed up capacity and loosened the tight market.
