As sea freight transport continues to decline globally due to the Russia-Ukraine war shocks, freight charges continue to decrease. In the second half of 2022, cargo transportation in containers, bulk carriers and lighter ships has dwindled by 20% to 50%, say industry insiders.
This means that after more than two years of skyrocketing costs in a pandemic-disrupted supply chain, freight rates have apparently sunk beyond the comfort threshold; shipping operators are now confronted by losses.
With reduced cargo volume, many ships are transporting less than their carrying capacity while some ships are forced to stay anchored with no shipment deals. Falling freight rates have also dealt a blow to the recently launched direct shipping services from Chattogram to destinations in Europe. Of the four routes, shipping on the Chattogram-UK-Netherlands route, which began in May, 2022, could only continue until October that year.
Freight charges on Europe-America routes through transhipment ports have dropped dramatically – rate per container on the Chattogram-Europe routes has come down to $1,500-2,000 from $14,000-16,000 in 2020. On the US routes the charge dropped from $16,000 to $3,000.