On the opening day of the Terminal Operating Conference (TOC) Europe 2024, industry experts issued new warnings about imminent increases in spot-freight rates, highlighting ongoing challenges and geopolitical tensions impacting the global shipping industry.
Peter Sand, chief analyst at Xeneta, addressed the delegates, emphasising the dual crises affecting container trades.
"The Red Sea crisis and bursts of regional port congestion continue to present significant challenges," Sand explained. "Additionally, the looming threat of tit-for-tat tariff wars is causing demand spikes, exacerbating the situation."
The Red Sea crisis, which has seen increased maritime disruptions due to regional conflicts and piracy, has severely affected shipping lanes vital for global trade. These disruptions have led to delays and re-routing, adding pressure to an already strained system.
At the same time, regional port congestion has created bottlenecks, slowing down the movement of goods and increasing operational costs for shipping companies. Ports in key areas are struggling to manage the volume of containers, resulting in longer wait times and increased storage fees, further inflating freight rates.
Added to these logistical challenges is the potential for escalating tariff wars. As countries respond to each other's trade policies with retaliatory tariffs, the market is experiencing sudden spikes in demand as businesses rush to move goods before tariffs take effect. This surge in demand is putting additional strain on the freight system, driving spot rates higher.
Sand's analysis highlights the complexity of the current maritime trade environment, where geopolitical factors and logistical challenges combine to create a volatile market. Delegates at the conference expressed concern over these developments, recognising the need for adaptive strategies to navigate the turbulent waters of global trade.
The TOC Europe 2024 continues throughout the week, bringing together industry leaders to discuss solutions and innovations in the face of these pressing issues.
