News
27 September 2022
Asia Pacific All the Way Local Forwarders Market update Air Freight Inland Services Intercontinental rail Ocean Transport
Container shipping is facing strong headwinds amid an increasingly pessimistic economic outlook due to a sharp slowdown in western economies as inflationary pressures and higher energy costs weigh on sentiment. Recent figures show regional container growth has declined in most major areas, while container rates have slumped. And while port congestion in Europe and US shows signs of improving, dock strikes in the UK will add to supply chain disruption.
But on a brighter corporate note, Maersk completed its acquisition of Hong Kong-based logistics company LF Logistics in August to bolster its warehousing network and logistics capabilities in Asia.
Market Trends
A worsening economic outlook is weighing on the container shipping markets as economic data points to a sharp slowdown in the US and Europe. The global manufacturing orders-to-inventory ratio fell further in August while manufacturing orders also fell back slightly. At the same time, US and Europe inflation levels are at a record high of 8.3% and 7.4% respectively excluding food and energy costs. Regional container trade growth declined further between May-July and most major regions are seeing negative growth with export volumes from Asia falling by 1.1% and import volumes dropping by 8.3%. Import volumes to North America fell 2.3% and containerized imports to Europe 4.5%. Africa and intra-Asia were among the few regions where container volumes grew, with inbound to Africa rising 8.1% and intra-Asia climbing 3.7%. Ocean spot rates are in steep decline with the Shanghai Containerized Freight Index (SCFI) dropping significantly since June to around $3,000 per TEU in September, back to the same level as December 2020.
Trending Topic
China’s National Day holiday: Operational changes including blank sailings and vessel slidings will take place on Asia-Mediterranean Europe and transpacific to take into account the Golden Week National Day holiday October 1-7 and vessel delays. The blankings and voyage resets will affect some of Maersk services into mid-October. That comes as we continue to see sluggish consumer demand due to high inventories and inflation in major western economies. For details of the affected sailings please contact your local customer services team Local Information | International shipping | Maersk or check out the customer advisory page on Maersk.com.
LF Logistics: The acquisition of Hong Kong-based contract logistics company, LF Logistics, was completed at the end of August. The firm, which will be rebranded to Maersk, has premium capabilities within omnichannel fulfilment services, e-commerce and inland transport in the Asia-Pacific region. “With the addition of LF Logistics, Maersk gains unique and best in class capabilities to servicing the important and fast-growing consumer markets in Asia,” said Ditlev Blicher, Regional Managing Director of Asia Pacific at A.P. Moller – Maersk. Following the acquisition, Maersk will add 223 warehouses to the existing portfolio, bringing the total number of facilities to 549 globally, spread across a total of 9.5 million square meters. Maersk’s existing fulfilment capability will now be combined with LF Logistics’ operating methods, technology, and supplier relationships to deliver world-class fulfilment solutions globally. The acquisition is another step forward, enabling us to deliver on Maersk promise to be customer’s trusted integrated logistics partner. Coming together as one company we are better positioned to ensure the timely and reliable flow of the goods, while adding flexibility and efficiency to your supply chain.
Ocean update
The changes to the macroeconomic environment are accelerating the pace of market normalization and enabling ports to decongest, which in turn will make put pressure of the value proposition offered by carriers. Throughout the pandemic, Maersk has been working hard on improving the quality of our product offering and we are confident that once the markets have normalized this will become evident to our customers, who will see Maersk as a strong partner for their global supply chain needs.
UK port strikes: Strikes at Felixstowe and Liverpool have had and will continue to have a major impact on vessel scheduling and landside and intermodal operations. The next strike at Felixstowe is due to take place between September 27-October 5, while the walkout at Liverpool will occur between September 20-October 3. Maersk has advanced or delayed the ETAs of 12 sailings on Asia-Europe and other services to maximise the availability of labor before and after the strikes. A LO2 service will call at London Gateway instead of Felixstowe. For most recent updates on strike action at UK ports, please check here.
European port congestion: There is an ongoing improvement in congestion at major European ports and productivity is picking up yet schedule delays, blanking and port omission are continuously expected in the coming months. At Bremerhaven and Rotterdam there has been a reduction in vessel waiting times and yard density levels have become more manageable. Rising water levels on the Rhine have reduced barge transportation delays and inland capacity bottlenecks via Antwerp and Rotterdam and helping to normalize rail and truck transportation. In Hamburg, while we are seeing an improvement in the overall situation, yard density levels remain high, causing low port productivity and increased berth waiting times.
For Retail Customers
Retail industry has needed to correct large-scale imbalance of inventory caused by volatile changes to consumer demand and shop closures due to Covid 19. Businesses must adapt to a new norm of supply chain management.
As consumer behavior returns to more pre-pandemic lifestyles in 2022, global industry professionals remain optimistic about the future of the retailing industry. Euromonitor International projects a modest positive forecast CAGR of 6% from 2021 to 2026. When comparing the performance across the various channels within retailing, this same group of professionals expects new digital shopping methods such as online marketplaces and direct to consumer to post some of the strongest rates of growth.
More than 60% of global retail professionals expect e-commerce penetration to be at least 20% of total retail sales. This share will continue to grow in the retail space and one can expect this percentage to exponentially increase in the years to come.
Industry professionals are adapting new business models and embracing technology to drive these new revenue streams to meet consumers where they are and how they want to shop. The likes of the rise of marketplaces, direct to consumer brands and subscription services also mean the future of physical spaces must be reconfigured to ensure relevance.
Some of the biggest challenges faced by industry professionals to develop an omnichannel strategy include the integration with existing system set-ups, lack of internal resources and expertise. Incorporating new business models requires retailers not only to make bold financial decisions and gather necessary resources, but also a shift in mindset to how the business will be conducted in the future. To be able to successfully make the transition will require significant uptakes from all relevant stakeholders and many capable sets of hands to be able to succeed.
The post-pandemic consumer is constantly shifting priorities, which forces those in the retail industry to react accordingly by constantly re-evaluating their strategic priorities. In the next five years, retail professionals will be placing more emphasis on sustainability, new digital technologies and business models and expanding into new markets. This will help drive the wants and needs of future generations of digitally-enabled and socially-conscious consumers.
Creating impactful in-store experiences and increasing digital investments to better engage with digital natives in the next 12 months will allow retailers to commence a comprehensive omnichannel strategy that will not only optimize store formats and in-store experiences, but also blend the physical and digital retail landscapes together.
The priority for supply chains will shift away from cost and towards resilience and reducing exposure to regional or global disruptions. Demand for higher levels of supply chain integration will grow as flexibility becomes more important.
The retail industry is scrambling to address an inventory imbalance by slowing down the production and delivery of low demand goods while simultaneously increasing the production and delivery of high demand goods. At the same time, global supply chains remain heavily disrupted with limited and changing transport options, acute staff shortages, economic uncertainty, and suppliers operating beneath capacity.
Key Market Outlook Across Trade Lanes
| Trade | Trade Statement | The most critical destination port situation update |
|---|---|---|
| Trade Asia Pacific - North Europe | Trade Statement We expect softening demand, particularly during the Golden Week period. We are balancing the network accordingly. Overall, our network enjoys strong transferability. This means that in case of sailing adjustments, our customers should be able to find good alternatives on other vessels in our network. We have published a detailed overview of our network changes in a recent CA. | The most critical destination port situation update Although overall congestion and delays continue in NEU, the situation has now stabilized and waiting times across different ports are slightly improving. Availability of labor is very uncertain - we have seen strikes in numerous ports in NEU over the past few months, most recently in the UK. Another strike in Liverpool is confirmed to start on September 20th and another one in Felixstowe starting September 27th. We will issue separate operational updates and CAs in due time. |
| Trade Asia Pacific - Mediterranean | Trade Statement Demand is softening. Competitive Spot rates are being offered from current week plus future 4 weeks of vessel departure. Vessels are being delayed by congestion at both origin and destination, so we will continue with voyages reset to recover schedule reliability. Gap loaders will be used where possible to meet customers’ schedule requests. | The most critical destination port situation update Below ports face 2-3 days of delay: |
| Trade Asia Pacific - North America | Trade Statement Overall, Asia Pacific to North America space are available. North American ports situations are getting improved, however, the capacity loss is still expected in some coming weeks due to sailings adjustments caused by the previous port congestion. Our goal is making overall service to graduallyrecover to weekly coverage in Q4. USEC port congestion deviates from port to port, overall waiting time is 0-3 days but Baltimore and Houston congestion is 5-20days. Los Angeles and Long Beach waiting time has been improved to 0-5 days. The LA/LB transit time of our services is quite competitive in the market now. Please reach out to Sales for detail. We are still seeing a huge waiting time at Vancouver, however at Maersk we have been working this out by including more terminal alternatives, and we have successfully improved our Asia Pacific to Vancouver transit time to approximately 25 days which is in line with the best class products in the market. Please check on Maersk.com booking website for details. Meanwhile, even though the North American ports situations have been improved recently, we are still see some delay of vessel because the down steam impact of previous congestion, we would kindly suggest our customers still prepare more lead time between ETA and actual departure time. | The most critical destination port situation update Overall USEC ports: 0-3 days waiting time |
| Trade Asia Pacific - Latin America | Trade Statement We are observing a softening demand, declining rate and space is available overall in the market. I will keep reviewing the capacity plan to better serve customer’s needs. | The most critical destination port situation update Low water situation in Manaus impacts the overall capacity intake and might cause rolling. |
| Trade Asia Pacific - West Central Asia | Trade Statement Overall demand is softening impacted by inflation and economy situation at destination markets, also given Pakistan flooding situation. Automotive volume has been impacted by Pakistan economic situation and now also flooding situation. Basis latest outlook, we expect volume improvement will be delayed to October/ November. Resuming of solar volume has also been further pushed back, we stay close with solar customers for proactively planning. Situation in Sri Lanka is stabilizing, and business is back to usual. | The most critical destination port situation update Overall operating normally, except some slowdown in India ports were impacted by bad weather condition. |
| Trade Asia Pacific - Africa | Trade Statement We expect demand in destination is flat, it mainly caused by high inflation rate and FOREX control. Market short term rate is under pressure. We encourage customer to check our online SPOT/Twill offers and plan advance shipment. SAF trade is welcome more Non-Operating Reefer shipment to Durban and Cape Town. | The most critical destination port situation update Waiting time: |
| Trade Asia Pacific - Oceania | Trade Statement In general Australia import demand is softening, while New Zealand demand is stable. Competitive SPOT rate is offered and we encourage customers to utilize it. Vessels are delayed due to congestion and we are actively working on plans to improve our schedule reliability. | The most critical destination port situation update New Zealand ports remain congested. Auckland wait time remains at 4-5 days Berthing windows across New Zealand ports are expected to remain suspended until March 2023. |
| Trade Oceania-World | Trade Statement South-East Asia import demand continues to remain strong with inland logistics issues alleviating in Queensland and New South Wales. Cotton and seed export volumes expected to reduce Nov onward but to be replaced with the impending grain harvest. Reefer opportunities remain available from Melbourne and Sydney. Equipment available to support customers export need. Export demand from Oceania to Americas remains strong, especially to the US East Coast. Congestion is easing in Panama and in the US West Coast increasing availability of space to accommodate additional customer demand. We recommend our customers to use Maersk Spot to access space at a fixed price at the time of booking. The OC1 Service, connecting OCE to Americas, reached 94% schedule reliability in July. 20ft equipment remains in shortage across ports in Oceania. We encourage all customers to switch to 40ft DRY and REEFER where possible to ensure availability of container supply to meet the increased export demand. New Zealand export continue to see port congestion and schedule issues, this is combined with volumes continuing from the peak season leading to prolonged demand. the traditional slack season has not yet eventuated. | The most critical destination port situation update New Zealand ports remain congestedwith delays continuing. Tauranga isexperiencing resource shortages andAuckland high yard utilization with waittime currently 4-5 days. |
Air Update
The global air cargo market is facing a mixed outlook with high fuel prices helping to support freight rates which remain significantly above pre-COVID-19 levels but demand growth is likely to flatten, according to a second quarter report by consultant Seabury. That comes as air cargo capacity is continuing to recover to pre-COVID-19 levels globally. Return of capacity between Asia and Europe is comparatively slow due to various impacts such as Russia-Ukraine conflict and Covid-19 control in China. Seabury said several freighter operators service Asia-Europe via the Middle East due to airspace closures over Russia and Ukraine.
Greater China: Air cargo capacity on key corridors has been reduced. For the US market, an on-going dispute over traffic rights between China and the US has led to airlines cancelling flights. In Europe, the impact of COVID-19 outbreaks and summer holidays has led to a shortage of ground handling staff leading to some flight cancellations to Frankfurt and Amsterdam. Power restrictions in China due to the drought and heatwave reduced airport efficiency which led to landing restrictions.
We are hopeful of a traditional peak season from September partly fueled by new product launches from high-tech firms such as Apple. Chinese Mainland and the Hongkong SAR markets are seeing an improvement in both the lower and higher weight categories, although transit times have yet to improve with an average 5-7 days processing time. Hong Kong fuel surcharges decreased from September 1 from HKD7.00/kg to HKD6.10/kg on chargeable kgs.
Maersk’s commercial department launched Project Jupiter in early September and the first aircraft is expected to operate in November.
Australia and New Zealand: There continue to be freight cost savings on major inbound corridors in September. Airlines are looking for volume growth so are hesitant about introducing peak season surcharges which could see customers shop around among other airlines.
Volumes from Ho Chi Minh City into Australia remain at August levels as do volumes from Hanoi into New Zealand. Airlines report that large volumes will continue to be split over several flights which will impact transit times.
From Chennai, India, freight costs have fallen some lower weight categories with a slight increase for higher weight limits. Pakistan remains a spot market for the coming month because capacity is less stable.
Trans-Tasman airline capacity options remain limited and freight rates are best offered on spot levels.
Inland Services Update
China: A preferential zero tariff has been introduced from September 1 on more than 8,000 products originating from 16 developing countries including Togo, Djibouti, Guinea, Cambodia, Laos, Rwanda, Bangladesh, Mozambique, Nepal, Sudan, Chad and Central Africa Republic.
Warehousing operations in Chinese Mainland, Hong Kong SAR and Taiwan are operating normally even as the peak season starts and there are on-going COVID-19 outbreaks.
Maersk has changed the name of its ICR service to Maersk Cross Border Rail to reflect the growth of rail connections within the Asia Pacific region and Europe. We will increase train frequency from China to Laos in September and the Maersk middle corridor will connect China railway services to the APM Terminal at Poti via the Caspian Sea and from there extend to the eastern Mediterranean or Europe through our ocean network.
Japan: Container drayage volumes are stable. Truck drivers are trying to increase freight prices due to rising fuel prices due to the Ukraine conflict and the fall in the value of the Yen.
Vietnam, Cambodia, Myanmar: Demand may slightly increase in Q4 but we may not see the peak season as in previous years due to the impact of the economic slowdown and inflationary pressures in western economies.
Philippines: Philippine manufacturing sector continues to grow significantly with external trade climbing 11.4% in July on record imports.
Major Ports Update
| Vessel Waiting Time Indicator Less than 1 day | Vessel Waiting Time Indicator 1-3 days | Vessel Waiting Time Indicator More than 3 days | |
|---|---|---|---|
| Asia Pacific Ports | Vessel Waiting Time Indicator Qingdao, Shekou,Xiamen, Yantian,Nansha, Hong Kong,Singapore, TanjungPelepas, Napier | Vessel Waiting Time Indicator Busan, Shanghai,Ningbo, Tauranga,Lyttleton, Port Chalmers,Sydney, Melbourne,Brisbane | Vessel Waiting Time Indicator Auckland |
| Rest of World | Vessel Waiting Time Indicator Charleston, Norfolk,Apapa, Tema, Lome,Onne, Pointe Noire,Dakar | Vessel Waiting Time Indicator Seattle, Miami, Trieste,Poti, Valencia, Sines,Luanda, Matadi,Cape Town | Vessel Waiting Time Indicator Hamburg, Rotterdam,Bremerhaven, Haifa,Koper, Long Beach, LosAngeles, Oakland, PrinceRupert, Vancouver,Newark, Houston,Savannah, Baltimore,Abidjan, Cotonou, Kribi,Dar Es Salaam, Zanzibar |
Remark: Numbers are dynamic and subject to change.
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FAQs
Will sea freight rates go down in 2022? ›
It is estimated that freight rates will be corrected and will drop by 30-40% in 2022. The fact that freight rates drop is good news, especially for importers. However, it is highly unlikely that they will drop back to the 2019 level.
Are container shipping prices coming down? ›Meanwhile, long-term contract rates finished 2022 about 20% lower than the pandemic peak of more than $8,000 per container, according to maritime consultancy Drewry, which expects contract rates to halve in 2023. That forecast would put rates at about $3,200, versus the pre-pandemic rate of around $1,500.
How is the shipping industry doing 2022? ›High prices, congestions and lack of personnel: The big affectation triangle. There are three main problems to worry still in 2022, and those are the rising in shipping and container prices, port congestions and waiting times, and the lack of personnel.
What is the outlook for ocean freight in 2022? ›The fleet grew by 3% in 2020 and 4.3% in 2021. The fleet will grew by 4.5% in 2022 according to the expectations. Fleet will grew by 7.5% in 2023 according to the expectations and it will be the biggest rise.
Are freight rates from China coming down? ›Freight & shipping costs & delays
But since the spring of 2022, ocean freight prices have come down, with China-West Coast US rates recently hitting pre-pandemic levels.
The pandemic has upended global supply chains in a way that is unprecedented in recent history. Owing to a combination of port congestion, slow circulatory movement, and high shipping rates, it's estimated that supply chains will remain disrupted well into 2022.
Will shipping prices go down in 2023? ›Sea, air, and trucking models all predict dropping volumes, say lower shipping costs could make some goods more affordable. Freight rates on sea, air, and highway routes are on track to drop from their pandemic highpoints during 2023, according to a trio of forecasts released this week.
How much does it cost to ship a 40FT container from China to USA? ›| Port of loading: | Container size: | Shipping price: |
|---|---|---|
| Ship a container from China to Providence | 40FT Container | from: $10500 |
| Ship a container from China to Seattle | 40FT Container | from: $8800 |
| Ship a container from China to Chicago | 40FT Container | from: $12800 |
Freight Costs from China to the USA
Air Express from China to the US: $5 to $9 per kilo. Air Freight from China to the US: $4 to $8 per kilo. Sea Freight from China to the US: $3000-$3900 per container.
The state of shipping delays in 2022
Port congestions, nationwide lockdowns, and international shipping restrictions presented unprecedented challenges to the shipping industry during 2020 and 2021. This trend continued into early 2022, mainly affecting the freight container shipping supply chain.
Why is there a shipping crisis 2022? ›
In 2021, as a consequence of the COVID-19 pandemic and the ongoing 2022 Russian invasion of Ukraine, global supply chains and shipments slowed, causing worldwide shortages and affecting consumer patterns.
What are the current issues in shipping? ›- #1 Decarbonization.
- #2 Modern control systems and autonomous shipping modules.
- #3 Blockchain technology.
- #4 Ocean sustainability.
- #5 Cyber-attacks and data theft.
- #6 Safety culture.
- #7 Corruption.
- #8 Blue Economy.
By 2023, rates are expected to slowly stabilize but at far higher levels than pre-Covid periods. New containers go into market by 2024, increasing overall capacity and improving schedule reliability.
What is peak season for ocean freight? ›Peak season happens every year, and if you're importing you need to be prepared. August to October is historically prime shipping time, with back to school and holiday shopping propelling consumer demand every year.
Will freight rates continue to rise? ›Thus, even with rates generally down to begin 2023, carriers must incorporate that expected return to normalcy - and thus, contract rates are projected to increase slightly for the year - and this applies to both truckload and intermodal.
What will freight charges be in 2023? ›In 2023, freight prices get expected to be adjusted and decrease by 30–40%. It's wonderful news that freight charges are declining, especially for importers. It is extremely doubtful that they will return to the 2019 level.
Will freight rates go up in 2023? ›Shippers are in the driver's seat as spot and contract rates continue to soften, but industry analysts said rates likely will stabilize throughout 2023.
What is the freight outlook for 2023? ›FTR Transportation Intelligence offers freight volume forecasts at the truckload sub mode level with dry van forecasted at a 1.3% increase in loadings for 2023 and refrigerated at 1.7%. Other sectors are mixed up and down in their January 2023 trucking update.
What is the real cause of the shipping crisis? ›Shipping shortages: Pandemic wave that created North American bottleneck. As the pandemic spread out from its Asian epicentre, countries implemented lockdowns, halting economic movements and production. Many factories temporarily closed, causing large numbers of containers to be stopped at ports.
Why is international shipping taking so long? ›International Customs: International Shipping Delay
If your package is a cross-border shipment, it can get stuck at customs due to incomplete customs documents, unpaid taxes, or if your package contains prohibited items.
What is causing the shipping delays? ›
Product shortages, clogged ports, limited carrier capacity, and spiraling input costs are just a few of the supply chain issues that have plagued shippers in recent years. In many cases, these issues can directly create freight shipping delays.
Why is international shipping so expensive right now? ›International shipping rates have peaked. So, many of you might be wondering why shipping has become so expensive recently. The primary reason for this increase is the world's nemesis: COVID-19. The pandemic has destroyed the global supply chain since 2020.
What are current freight rates per mile? ›As of July 2021, trucking rates per mile remain steady. Here are the current rates for the most popular freight truck types: Overall average van rates vary from $2.30 – 2.86 per mile. Reefer rates are averaging $3.19 per mile, with the lowest rates being the Northeast at $2.47 per mile.
Why are ocean freight rates dropping? ›Logistics CEOs explain to CNBC the reason is a combination of too much inventory coupled with a lack of clarity on consumer demand. The ocean shipping trend echoes recent comments from logistics industry executives.
What is the cheapest way to ship from China to USA? ›Using an international courier, also known as express freight is generally more reliable and quicker than by mail, whether it's DHL, UPS or TNT. As a rule of thumb, at about $5 per kilo, express freight is the cheapest shipping mode for packages or small shipments up to about 150 kg.
How long does it take for a shipping container to go from China to the US? ›Shipping Containers Around the World
The most common way of transporting goods from China to the US is by cargo ship. From China, these ships can take about two to four weeks to arrive on the US West Coast or about three to five weeks if they are going to the US East Coast.
China Post and the USPS have an agreement between them, which has helped speed up deliveries to the continental United States. Alternatively, if you want an even speedier delivery, you can contact the seller about choosing ePacket shipping for an even faster package delivery service.
What is the fastest way to ship from China to USA? ›Express shipping via an international carrier like FedEx, Ups, DHL, or TNT is the fastest and the most reliable way to ship from China to the US. If you need your products as quickly as possible, express shipping is by far your best option.
Why China can ship US mail cheaper? ›China is still considered a “transitional” country by the UPU, which means it enjoys a lower rate for sending mail to a developed nation like the US. As a result, mail services from China to the US cost less than Americans are charged by their postal service for a comparable domestic delivery.
What is the fastest international shipping from China to USA? ›Express shipping via an international courier like FedEx, UPS, DHL or TNT is the fastest and most reliable way to ship from China to the United States. If you need your products as quickly as possible (less than 5 days), express shipping is your best option.
Why are ocean shipments delayed? ›
Weather. The weather is perhaps the most important reason for disrupted schedules. Vessels sailing on the high seas are exposed to the vagaries of weather through most of their journey. Any adverse weather conditions such as hurricanes, storms etc will delay the vessel and cause it to arrive beyond its scheduled time.
What are the current maritime issues 2022? ›Key 2022 findings
For the second consecutive year, decarbonization of shipping and new environmental regulations were the top two issues in terms of impact in the coming decade. They were also in the top five for likelihood. Respondents had a more favorable view of the industry's preparedness for these challenges.
Cyberattacks and threats involving data and new technology. An economic crisis and trade wars.
What is the biggest challenge in the maritime industry today? ›One of the most significant issues facing the maritime industry in the Philippines is a shortage of qualified personnel.
Are we in a freight recession? ›Debate on whether we are in a freight recession has been raging since the first quarter of 2022. The conclusion is now obvious: Freight volumes have collapsed this year, dragging down spot rates with them.
What are the future trends in the shipping industry? ›Digitalization and new developments in the field of artificial intelligence, blockchain, IoT and automation are becoming increasingly relevant for maritime transport. They help streamline existing processes, create new business opportunities, and transform supply chains and trade geography.
What time of year is shipping cheapest? ›The Quiet Shipping Season (January – March)
The Quiet Shipping Season is the year when freight demand is the lowest, and supply chain disruptions are minimal.
After the pandemic-driven surge in consumer demand that triggered a frenzy of shipping activity and skyrocketing prices, logistics and transportation companies are signaling a fast slowdown.
What is considered high value freight? ›High-value freight, for all intents and purposes, is any load that exceeds the legal cargo coverage minimums required of commercial motor carriers. Although there is no legal minimum cargo coverage, an industry practice of maintaining $100,000 is the norm in today's market.
Will freight rates go down in 2022? ›Prices of shipping containers have fallen by two-thirds this year after reaching figures tenfold on major trade routes during 2021, according to Investors' Chronicle. Rates slowly began falling in the third quarter of 2022 and are expected to continue to drop, the outlet reports.
Will freight rates go up in 2022? ›
Despite a significant appreciation in diesel prices in 2022, which has curtailed some of the trucking cost declines, we expect spot rates to continue to trend lower year-over-year,” says Krasov.
What is the freight price trend for 2022? ›“Since January 2022, freight rates have increased by about 20%,” he says.
What is the ocean freight price index for 2022? ›In November 2022, the global freight rate index stood at 2,400 U.S. dollars.
How much will freight cost in 2023? ›In 2023, freight prices get expected to be adjusted and decrease by 30–40%. It's wonderful news that freight charges are declining, especially for importers. It is extremely doubtful that they will return to the 2019 level.
What is the freight cost trend for 2023? ›Sea, air, and trucking models all predict dropping volumes, say lower shipping costs could make some goods more affordable. Freight rates on sea, air, and highway routes are on track to drop from their pandemic highpoints during 2023, according to a trio of forecasts released this week.
Are freight rates going to go up? ›Thus, even with rates generally down to begin 2023, carriers must incorporate that expected return to normalcy - and thus, contract rates are projected to increase slightly for the year - and this applies to both truckload and intermodal.
What are current freight rates? ›National average flatbed rates are currently $2.78 per mile, $. 01 higher than the December average. The Midwest has the highest average flatbed rates at $3.11 per mile; the lowest rates are in the West, with an average of $2.41 per mile. Nationally, load-to-truck ratios are at 12.59, compared to 7.80 on December 18th.
Will trucking freight rates go up in 2023? ›Shippers are in the driver's seat as spot and contract rates continue to soften, but industry analysts said rates likely will stabilize throughout 2023.
What will happen to trucking industry in 2023? ›Cooling demand, recession concerns kick off 2023, though trucking can expect gains. Although forecasts say the first quarter of 2023 will be particularly tough for the industry, trucking remains the most relied-upon freight transport mode in the U.S. and increased infrastructure spending could be a potential boon.
Will semi truck prices go down in 2023? ›Experts expect truck prices to continue falling in 2023, thanks to continued downward pressure. Data shows that the average retail price is down a few percentage points, and that trend may continue into at least the first half of 2023. The trend is great news for fleet owners who want to expand in the coming years.
What is the current freight rate per mile? ›
According to the latest data from the American Transportation Research Institute (ATRI), the average cost of trucking in 2021 was $1.855 per mile.
How much is freight per mile? ›As of July 2021, trucking rates per mile remain steady. Here are the current rates for the most popular freight truck types: Overall average van rates vary from $2.30 – 2.86 per mile. Reefer rates are averaging $3.19 per mile, with the lowest rates being the Northeast at $2.47 per mile.
Is freight out selling cost? ›Freight-out is considered a selling expense and is expensed when incurred. When a company hires a 3rd party transportation company to transport inventory to a customer, the company would debit freight-out expense (selling expense) and credit cash (cash outflow to pay shipping company).
Why are freight rates so high right now? ›International shipping rates have peaked. So, many of you might be wondering why shipping has become so expensive recently. The primary reason for this increase is the world's nemesis: COVID-19. The pandemic has destroyed the global supply chain since 2020.
What is causing freight rates to increase? ›The primary reason for the sudden spike in the price of shipping is the world's ongoing nemesis: COVID-19. The pandemic affected global supply chains in 2020, and shipping prices reflect that.