Shippers need to brace themselves for at least another year of lengthy delays and exceptionally high freight rates.Freight rates are expected to rise by another 39% in 2022, according to the latest market report by independent maritime research consultancy Drewry, which has completely dashed all hope that 2022 will provide a reprieve from the current exorbitant freight rates.“This 39% hike follows a 110% hike in global freight rates in 2021,” said Simon Heaney, Drewry’s senior manager for container research. “Initial forecasts that there would be some normalisation and drop in freight rates towards the end of this year are now being revised. We are now extending our horizon for recovery to the first half of 2023.”Heaney said shippers could expect at least another “12 months of lengthy delays and high freight rates” after which there would be some gradual improvement in the situation.AIS ship tracking data showed significantly more waiting events outside high-volume ports during 2021 and 2022 to date, but the problem was now spreading to medium- and low-volume ports – which is a worrying development.He said while costs for carriers were rising and an extended Covid-19 lockdown in China could result in a serious drop in demand, Drewry estimated that carriers would continue to see record profits this year. In 2021 it estimates that carriers will have reached profits of $214 billion – and it has revised that figure up for 2022, with expectations of profits reaching the $300-billion mark.“More disruption-driven freight rate gains in 2022 should more than compensate for rising costs and deliver even higher profits in 2022, although this forecast is subject to numerous risks,” said Heaney.In the highly volatile container market, things can change very fast. How long the rates are going to remain high will depend on several factors, including how long the crisis in China lasts, the ongoing global pandemic, and how the Russia-Ukraine war pans out.”According to Heaney, the situation in China and the war in Europe, in particular, could cause a firebreak in the container industry that would see rates come down very quickly. “There is no firm evidence as yet that demand is decreasing. It is slowing down to some extent, which would mean a slightly dimmer prospect for carriers than what was initially envisioned earlier this year.”
