Ti’s Global Ocean Freight Rates Index shows that head haul rates are now over 5.5 times the February 2021 level, although the data shows a slowing in the pace of rate increases across all lanes, and even some falling rates on routes into the US west coast.
Overall, Ti’s latest Ocean Freight Rate Tracker Q1 2022 paints a picture of a highly unbalanced global ocean freight market. At the global level, both head haul and back haul ocean freight rates have begun to climb again at the start of 2022, no doubt leading to the clear expectations from those surveyed for further increases over the coming months.
On lanes from China/East Asia to the US west coast, the start of 2022 has been marked by two consecutive months of rate increases. In February 2022, rates on these lanes were up 175.6% year-on-year, while rates on the backhaul were up 30.2% year on year. While transatlantic freight rates remain elevated, rates on the head haul route from Europe to the US east coast have fallen for three consecutive months. This suggests that the upwards pressure on prices that caused increases during 2021 may have eased.
The key to understanding the present elevated level of ocean freight rates is not the gross volume increases in demand, but the dysfunction of network of container shipping. The key indicator of this is the increase in the container availability index. This, rather than the conventional balance of supply & demand, is a better guide to the network pressure that is driving up prices and driving down availability. For the time being, demand for Asian exports remains strong, congestion on the US west coast is volatile and still high, while in Europe container availability data suggests major ports are struggling to keep pace with the volume of imports. All these factors look set to underpin a continuation of rate increases in the medium term. What is more, the war in Ukraine will certainly compound global supply chain problems and may trigger the reassessment of the structure of the global trading system based on political criterion.
Global Ocean Freight Rate Outlook
Within an already stretched global system, dysfunction looks set to remain the defining characteristic of the global ocean freight market well into the year. Ocean freight rates appear to have stabilised at historically high levels and according to Ti’s Ocean Freight Rate Tracker for Q1 2022, shippers won’t see much rates relief until Q3 2022.
This Brief provides a snapshot of Ti’s latest coverage of freight rate developments. An extended coverage of the supply chain challenges highlighted above are available in Ti’s Ocean Freight Rate Tracker Q1 2022. Freight rate outlooks for the Transpacific, Transatlantic and China / East Asia – Europe trade lanes are available on GSCi.
Source: Transport Intelligence, March 1, 2021
Author: Violeta Keckarovska
OCEAN FREIGHT RATE TRACKER: Q1 2022
Providing transparency on current sea freight rates, capacity, congestion, container availability by trade lane.
The report also maps out expected rate development for each quarter out to 2023.
Full Q1 2022 report now available to download for free: