Prices for international shipping and freight may be beginning to come down after major disruptions in the last two years occasioned by the COVID-19 lock down, logistics sector observers say, citing industry indicators from mid-April. They say that cost of shipping containers – across major maritime freight lines recorded a light drop in prices – and that they expect this trend to continue in the mid to short term.
If this happens then global trade will get some respite from the last two years when freight costs have spiralled – in some instances going up five-fold. Landlocked countries have especially suffered the jolt.
Some Ugandan importers have told The Infrastructure Magazine that in the last two years, they have seen the cost of importing one 20 foot container of goods from China, go up from about US$ 2,000 to about US$8,000, a factor that has contributed to the spiral of prices of imported goods, but also leading to shortages.
The World Container Index published by UK based market intelligence and research consultancy, Dewry, shows that since January (2022), there has been a 16% fall in shipping prices. They however note that although the fall in prices is observable, current prices remain at least 60% above the average recorded in the last five years ( US$ 3,257) – i.e. current prices are still higher by over US$5,000.
Drewry, a leading independent provider of research and consulting services to the maritime and shipping industry, with offices in London, Delhi, Singapore and Shanghai, is a respected industry player. They specialize in providing research, analysis and advise on the maritime, logistics, shipping and finance industry to leaders in the trade that they use to make decisions.
Another industry player, Transport Intelligence, recently reported that even the number of empty containers becoming available for use in international trade is going up, globally. It will be remembered that shortage of empty containers last year partially contributed to the spiking shipping costs.
For example, Ugandan local media quoted Merina Ssebunya, CEO of a local freight and forwarding company – BTS Clearing & Forwarding; chairperson the National Logistics Platform, and herself a past president of the East African freight and forwarders association, as blaming the spiking costs of shipping from Uganda, to shortage of empty containers.
Other industry sources however warn that the continued COVID-19 related lock down in Shanghai, China’s biggest and busiest port – and one of the world’s biggest shipping hubs- may in the very short term water down impacts that the current fall in shipping prices may realize – meaning because the impact of the fall in shipping prices will be neutralized by the Shanghai lock down, prices may stay up, at least for a little longer.
