After shipping rates from Asia increased sharply during the pandemic, over the last few months the prices have declined just as dramatically.
Ocean shipping spot rates, whilst still falling, appear to have started to flatten out.
Whether this represents a degree of stabilisation or a lull before a return to a more turbulent market, only time will tell.
What we can say, is that it is now considerably cheaper to move goods via sea freight, to and from China, than it was 6 months ago.
Why have rates dropped?
Commentators point to a number of factors:
The congestion caused by high demand as the world emerged from the pandemic has eased, meaning more containers are readily available.
The ongoing war in Ukraine, facilitating an energy and cost of living crisis in Europe which looks set to be a catalyst for a global recession, stifling demand.
The pursuit of a strict zero-Covid policy by China’s President Xi Jingping stunting China’s economic growth and output. For more on this, see our China Covid Update blog.
However, it is notable, that while rates appear to be stabilising, containers are still more expensive to ship than they were pre-pandemic.
Indeed, we have even heard musings from our network of partner agents that rates might increase slightly later in December, but at the time of writing this was just speculation.
It is also interesting to note that for those shipping goods from the UK to the US, spot rates are still extremely high and well above pre-Covid levels, partially as a result of carriers still running a reduced service.
Taking all this into consideration, it feels premature to make the call that Asian spot rates have hit their bottom.
Like much going on in the world right now, it is very much a ‘wait and see’ situation.
How We Can Help
The GCL team will make sure to keep you updated as new developments occur and the picture becomes clearer.
If you are interested to learn more about GCL Logistics’ sea freight services please don’t hesitate to get in touch.
Through our long-established partnerships with key shipping lines and our network of worldwide agents, we can help you access the most competitive rates, priority space options, and new opportunities.
Email the GCL team at sales@gcllog.com or give us a call on 0208 844 4040.