Shippers are unlikely to see any change in the high levels of freight rates and should brace for even higher rates as capacity remains extremely tight.
That’s according to a report published by the British International Freight Association (Bifa) whose views are informed by ongoing service delays and container shortages, as well as punitive surcharges.
In response to concerns expressed by its members, the trade association that represents UK freight forwarding and logistics companies has been monitoring conditions in the global container market for some time, liaising with international organisations in order to compare market conditions around the world.
It has now prepared a report for all of its members, to help them highlight and explain to their clients how the present difficult position has arisen; the impact the current issues are having on the container market and wider economy; why it is so difficult to ameliorate the situation in both the short and longer term; as well as the potential for the immediate future.
With regard to rates, the report warns members to expect more surcharges to be imposed by the lines, in part to cover higher charter rates, as well as additional port fees, quay rent and demurrage.
“Bifa has been challenging the legitimacy of arbitrary surcharges on behalf of our members – and their customers – for many years. There is a suspicion that the container shipping lines and others are cashing in on a crisis in global container shipping, created in no small part by their own actions,” says Bifa Director General Robert Keen.
“Over the last few years we have seen surcharges for fuel, equipment imbalances, the peak season and currency fluctuations. The number of surcharges and fees continues to grow – often with no real explanation or justification.”
Commenting on capacity, the organisation predicts little prospect of additional allocations and expects the shortage of landside transport to remain, while carriers will not accommodate low-yield freight.
“Ongoing short-term changes to schedules and routings are likely - accompanied by service speed reductions and blank sailings.
“The fundamentals that underpin demand and supply within the container shipping market show no signs of significant changes, which leads us to conclude that there is little chance of there being any improvement in the current situation for many months, or possibly even years.”