Home
FacebookTwitterSearchMenu
  • Subscribe
  • Subscribe
  • News
  • Features
  • Knowledge Library
  • Columns
  • Customs
  • Jobs
  • Directory
  • FX Rates
  • Contact us
    • Contact us
    • About Us
    • Advertise
    • Send us news
    • Editorial Guidelines
Imports and Exports
Logistics

Spot rates continue upward trajectory

14 Jun 2024 - by Staff reporter
0 Comments

Share

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • E-mail
  • Print

As container spot rates continue to skyrocket, shippers are concerned that prices will increase to such an extent that many will not be able to afford to ship their goods.

“Shippers are clearly getting anxious about how high rates may go,” says Alan Murphy, CEO of maritime consultancy Sea-Intelligence. “But the truth is, nobody really knows. If prices increase sufficiently, and many shippers cannot afford to ship their goods, this will lower container demand, to the point where it matches the available vessel capacity.”

But at what point this will happen is unknown. “The easiest answer to ‘how high can rates go?’ would be to point to the maximum level seen during the pandemic,” says Murphy. This, however, does not account for the increased round-Africa sailing distances that weren’t present during the pandemic. 

“To account for the longer sailing distances, we can look at the rates in relation to the distance sailed, ie US cents/FFE for each nautical mile sailed. For the pandemic, this is shown in Figure 1. While Figure 1 is simply a display of historical fact, it also sets a precedent, which is that during times of severe distress, freight rates per nautical mile can reach these very high levels. 

“If we extrapolate the data from Figure 1 as an indication of how high the market can indeed go based on the pandemic surge in rates, we can now apply the new (longer) sailing distances and calculate how high the spot rates per FFE could possibly go, if the current crisis persists.” 

The result of this calculation is shown in Figure 2, which indicates the concerning scenario for shippers. “If the rate paid per nautical mile reaches the same level as during the pandemic, we will see spot rates of 18 900 USD/FFE from Shanghai to Rotterdam, 21 600 USD/FFE from Shanghai to Genoa, and 2 200 USD/FFE on the back-haul from Rotterdam to Shanghai. This is not to say that the rates couldn’t go any higher; this is just to say that if rates per nm go as high as during the pandemic, then spot rates would go as high as shown in Figure 2.”

Sign up to our mailing list and get daily news headlines and weekly features directly to your inbox free.
Subscribe to receive print copies of Freight News Features to your door.

Shippers warned to monitor cargo closely during Untu strike

Logistics

Logistics company advises shippers to communicate concerns about urgent or time-sensitive cargo.

Today 13:00
0 Comments

GNU targets livestock auctions after China bans SA beef

Imports and Exports
Today 13:00
0 Comments

New tariff protection for South African wheat hits a snag

Imports and Exports

Itac request for comment for stronger tariff protection for locally produced wheat only protects brown flour.

Today 13:00
0 Comments

Creecy outlines logistics sector reforms

Logistics

The government is continuing to collaborate with original equipment manufacturers to ensure that spare parts for essential machinery can be sourced.

Today 12:45
0 Comments

Suez Canal offers toll reductions for large containerships

Logistics

“We are monitoring developments moment by moment and assessing the changing dynamics.” – Maersk.

Today 12:45
0 Comments

Oil spill response in Red Sea under the spotlight

Sea Freight

Workshop focuses on equipping officials and responders with the skills and knowledge to manage and mitigate major marine pollution incidents.

Today 12:45
0 Comments

President Ramaphosa to meet Trump in US

Economy

The engagement will focus on a range of bilateral, regional and global matters of mutual interest.

Today 12:30
0 Comments

Belgium port strike on the cards

Imports and Exports

Port operator PSA Antwerp will suspend truck export deliveries ahead of the strike.

Today 12:15
0 Comments

Soy, maize imports surge due to regional drought

Imports and Exports

Dry conditions across the subcontinent forced South Africa to import white maize for the first time since the 2016-17 drought.

Today 09:15
0 Comments

Famers need beyond-banking assistance – futures specialist

Imports and Exports

Agricultural assistance also extends to analysing the South African Futures Exchange.

Yesterday
0 Comments

SA a top target for cyber attacks

Technology

Increasing dependence on technology to deliver services means security risks are rising.

Yesterday
0 Comments

Carbon capture solution cuts emissions by up to 70%

Sea Freight

The high technology system captures emissions from all exhaust gas sources.

Yesterday
0 Comments
  • More

FeatureClick to view

The Cape 16 May 2025

Border Beat

The N4 Maputo Corridor crossing – congestion, crime and potholes
12 May 2025
Fuel-crime curbing causes tanker build-up at Moz border
08 May 2025
Border police turn the tide on illegal crossings
29 Apr 2025
More

Featured Jobs

New

Seafreight Export Controller

Tiger Recruitment
Cape Town
15 May
New

Import Manager (NVOCC)

Switch Recruit
Eastrand
15 May

Sales Co-Ordinator

Lee Botti & Associates
Cape Town
14 May
More Jobs
  • © Now Media
  • Privacy Policy
  • Freight News RSS
  • About Us
  • Advertise
  • Send us news
  • Contact us