Return to pre-pandemic numbers not yet in sight

International container freight costs to soften for Australia’s ag sector

According to a new Rabobank report, Australia’s agri sector must expect to contend with elevated ocean container shipping costs and ongoing supply disruptions for at least another year before a ‘normalization’ of the global ocean freight system.

Its Global Ocean Freight Outlook report states that, while global container freight prices are set to continue to gradually decline over the coming 12 months – from the “irrational” highs reached late last year – they are not expected to return to pre-pandemic lows. This is due to the fact that the global container shipping industry is now impacted by broader structural factors, including a weaker global economy, higher operational costs, geopolitical uncertainty and imbalanced trade flows.

The report says even though the record-breaking high ocean freight rates seen in the past two years, driven by pandemic-related disruptions, have already begun to soften – with “spot rates having retreated from irrational high levels in Q4 2021” – they remain three to five times above pre-2020 levels. Long-term contract rates have also risen significantly and remain elevated.

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