Freight transport: rising costs in 2024

Freight transport is becoming more and more expensive, with shipping rates rising sharply since the beginning of 2024. An analysis of the Global Container Freight Index shows an increase of about 80 per cent since January.

This increase can be attributed to various factors, including increasing demand, congestion at ports, potential strikes and the threat of attacks by the Houthis forcing ships to avoid the Red Sea, thus lengthening shipping times and costs.

Congestion in Asian ports

The port areas of Singapore, Shanghai and Qingdao are facing very long waiting times, with ships waiting an average of seven days to enter the ports. The reorganisation of shipping routes, such as the passage around the Cape of Good Hope, further reduces the availability of containers, contributing to rising prices. The situation in the Red Sea, made unsafe by Houthi attacks, has forced many ships to take alternative routes, increasing transit times and shipping costs.

Comparison with the pandemic

The current situation is comparable to that seen during the pandemic, when consumer demand was insatiable and there was a shortage of containers and ships to transport goods. Although overall demand has decreased compared to the pandemic peaks, shipping capacity remains limited, with many ocean carriers cancelling crossings.

Economic implications

Rising shipping costs could have serious effects on the economies of many countries, causing price increases and a possible rise in the inflation rate. This raises questions about the future of monetary policies of major central banks and the effects on financial markets. High tariffs not only affect the cost of goods, but can also affect the entire supply chain, making it more expensive for companies to maintain adequate inventory levels and meet consumer demand.

Future Forecasts

Forecasts for the coming months indicate that congestion levels and fares may reach their peaks between July and August, and then decline. However, insecurity in the Red Sea and increasing charter activity suggest that congestion will remain a significant problem for some time. The expectation is that, despite a possible seasonal decrease in fares in the fourth quarter, prices will still remain above pre-pandemic levels.

In summary, 2024 promises to be a challenging year for the shipping industry, with rising costs and various factors continuing to adversely affect the capacity and efficiency of global shipping.

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