The reduction in consumer demand in the U.S. market has caused ocean freight rates, and especially ocean spot freight rates, to drop considerably since January 2022.
Coming off its high in January 2022 of around USD17-18,000/40’ from China to U.S. West Coast, container ocean spot freight rates have plateaued at around USD7-8,000/40’ since April 2022 and as per indications, it is set to maintain these levels until at least July 2022. China to U.S. East Coast spot freight rates dropped from a high of USD19-20,000/40’ in January 2022 to around USD9-10,000/40’ since March 2022 and as per indications, it is set to maintain these levels till at least July 2022 as well.
Shabsie Levy, founder and CEO of Shifl.com says that market reports have indicated that ocean freight rates on long-term contracts have increased substantially in 2022, overtaking container spot freight rates for the moment. But it's dependent on what happens in China.
As per Shifl, the rates could further drop as U.S. retailers are currently sitting with excess inventory, yet have many orders still pending to come in from China, but which are stuck mainly due to the intermittent lockdowns there.
Customers can follow the trend of past and current container ocean spot freight rates on SHIFEX, the newly launched Freight Index by Shifl focusing on the spot freight market. The index for container shipments is available on Shifl’s website.
The recent and continuing unprecedented chaos in the freight markets has brought the dire need for transparency and visibility into actual ocean freight rates. Levy said he often found thousands of dollars of disparities between reported and actual freight rates on the market.
“In the current market condition, just about no one can afford to pay hundreds and sometimes thousands of dollars more for moving a single container,” said Levy.
SHIFEX provides live insights into ocean freight rates. It tracks and displays the average ocean spot freight rates for 40' containers (FEU) on main Transpacific routes at any given period.
Freight rate transparency and accuracy have always been touted as core business values. They improve customer engagement, build trust and increase productivity.
“By leveraging our existing technology, we help shippers benchmark the freight rates they should be paying for their shipments and help them better plan their order placements and inventory,” said Levy.
By analyzing its data of actual bookings and shipments, Shifl was able to alert the market in advance of the drastic changes in the ocean spot freight rates across the volatile periods in 2021 and 2022.
For more information:
Charlie Pesti
Shifl
charlie@pesti.io
https://shifl.com