Ocean freight rates from Asia have continued to rise in the first half of this month, with current market conditions mirroring the period that immediately followed the outbreak of the pandemic.

It continues to be a major challenge to find space on vessels, which is made more difficult by a shortage of container equipment at numerous origin points. Shipments are then liable to delays caused by port congestion throughout Asia, which has disrupted schedules and led to some ports being omitted.

The current market is completely different to where we were just six months ago, before vessels were routed away from the Red Sea, when demand was low, ships were far from full, and rates were at rock bottom.

The longer journey times have directly led to the spiralling ocean freight rates. Carriers needed to add 2-3 extra vessels, and probably 25-40,000 more containers to every single service loop, just to maintain weekly schedules.

While scrambling to provide this, there just hasn’t been enough capacity or equipment available, and demand has outweighed availability. Incidentally, every voyage now costs an estimated $1 million in extra fuel.

There is little evidence to suggest that vessels are about to return to the Red Sea route, which could mean that rates continue to rise. However, we could be witnessing an early peak-season demand boom, and if so then the explosion of freight rates could slow down soon. Let’s hope it’s the latter.

Westbound continue to work tirelessly to manage capacity during these challenging conditions, but we must remind customers to provide as much notice as possible ahead of upcoming bookings.

If you have any questions regarding the above, then Westbound are here to help. So, please do not hesitate to contact us.