As the fluctuations from the pandemic and current global events subside, signs indicate that freight market conditions are finally returning to normal. Disruptions to global supply chains were massive, and lockdowns led to shipping backlogs at ports. However, aftershocks from those events seem to be subsiding. Seabound shipping is beginning to return to its job of carrying 90% of all transportation worldwide.
Pre-Pandemic Freight Rates
Due to a deal struck between dock workers and port authorities, shipping problems have been brought under control in Germany. According to the German Shipowners Association (VDR), the situation is “almost back to normal.” Data recently published shows that shipping rates have finally dropped to pre-pandemic levels.
Supply Chain Madness
A surge in demand and front-loading by importers recently led to supply bottlenecks. Vincent Stamer from the Kiel Institute said, “During the pandemic, consumers in Europe and North America massively bought consumer electronics devices, furniture, and sports apparel, causing importers to hastily fill their inventories to meet the demand.”. However, the boom is subsiding, and demand for such goods is dropping. This development has helped the freight market begin to normalize.
Good News for Consumers
Stamer thinks the fall in global shipping rates will produce a decrease in consumer prices. This, in turn, will ease freight rates and lower the cost for companies. However, not everyone agrees. Some experts say shipping costs make up a minimal amount of the shelf prices needed to be paid by consumers. Only time will tell who is right.
While freight market conditions continue to improve, there are still a lot of variables in play. It looks like we will have to get used to an ever-changing market. All Points Container Line will keep you updated, and as always, we are here for all your cargo needs.