Ocean Freight Price Trend and Forecast

Ocean Freight Regional Price Overview

Get the latest insights on price movement and trend analysis of Ocean Freight in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Ocean Freight Price Trend for the First Half of 2024

In the first half of 2024, ocean freight rates experienced a significant and sustained increase, driven by a complex interplay of geopolitical tensions, supply chain challenges, and capacity constraints. From January to June 2024, freight rates on routes from the Far East to the U.S. escalated by an alarming 36% to 41% month over month, culminating in a doubling of rates over this six-month period. This sharp rise can be attributed in part to the Red Sea crisis, where ongoing conflicts have disrupted key shipping lanes, forcing vessels to reroute around the Cape of Good Hope.
 

Ocean Freight Price Chart

Please Login or Subscribe to Access the Ocean Freight Price Chart Data
 

This detour not only extends transit times by several weeks but also imposes substantial additional fuel and operational costs, which carriers are passing on to shippers. Moreover, the global shipping industry is grappling with a severe shortage of container availability, exacerbated by the increased transit times and the strategic reduction in vessel sailings, known as blank sailings, implemented by ocean carriers to manage capacity. Despite a 48% decline in ocean freight orders, this scarcity of containers, combined with persistent port congestion, has kept upward pressure on rates.

The impact of these factors has driven the cost of shipping a 40-foot container to levels not seen since the height of the COVID-19 pandemic, with some forecasts predicting that rates could approach or even exceed $20,000 to $30,000 per container. The current environment suggests that shippers will need to navigate these higher costs for the foreseeable future as the industry struggles to adjust to these unprecedented challenges.

Analyst Insight

According to Procurement Resource, since these challenging geopolitical situations are likely to persist in the foreseeable future, the Ocean Freight industry is likely to sustain these elevated prices.
 

Ocean Freight Price Trend for the Second Half of 2023
 
Ocean freight prices were observed to be varying throughout the second half of the year 2023. Quarter three was still somewhat stable in reference to the first half of the year. However, there were some disturbances in the market compared to the previous year. Uncertainties still lingered regarding a return to pre-pandemic norms.

Market analysis indicated a shift in trade patterns. However, demand dynamics indicate that the weakness in rates was due to increased shipping capacity. In the following quarter, however, other major geopolitical events became more pivotal in the ocean freight industry.

Widespread diversions of carriers away from the Red Sea and Suez Canal due to Houthi threats impacted ocean freight operations for trade routes from Asia to Northern Europe, the Mediterranean, and North America's East Coast. Longer transit times were disrupting schedules, leading to vessel bunching and port congestion. Despite lessons learned from COVID-19, carriers faced higher costs for longer transits. Additionally, Asia-North America operations were affected, with some services rerouting via Africa.

While the US-led naval coalition was trying to secure the Red Sea, carriers like Maersk and CMA CGM were very cautious in resuming operations, while others remained hesitant. This disruption prompted a shift of urgent volumes to air cargo; overall, significant impacts were observed on ocean freight because of these events.

Analyst Insight

According to Procurement Resource, Ocean Freight prices are likely to increase in the coming months as the disruptions continue to affect vessel movements. Houthi attacks are still persistent and lower water levels in the Panama Canal will also likely continue affecting operations.
 

Ocean Freight Price Trend for the First Half of 2023

The fall in Ocean Freight rates that started in H2’22 continued into the first half of the year 2023 as well. The trading sentiments in major global markets like the USA struggled as the demands remained dull for a very long time, primarily because of the deficit in the end consumer’s purchasing powers. Supply chains were still restricted as the world’s biggest transshipment ports of Shanghai and Singapore saw reduced traffic. The rising competition between the growing Ocean Freight companies was also a reason the prices couldn’t go up at all. Overall, tepid movement was observed in the Ocean Freight sector.

Analyst Insight

According to Procurement Resource, given the long slump, the Ocean Freight rates are likely to improve in the coming months.
 

Ocean Freight Price Trend for the Second Half of 2022

Ocean Freight is employed to carry more than 80% of traded goods. In the year 2022, there were mixed price trend observed for Ocean Freight. During the first half of the year, the prices soared drastically, attributed to the various geopolitical and pandemic situations. Stretching COVID-19 curbs delayed the arrival of goods to the ports since the manpower was reduced, and later, the war in Europe further complicated the Ocean Freight situation.

However, the latter half of the year saw a downfall in Ocean Freight price trend. With the shot-up inflation, the demand for products had taken a severe downfall. The containers were empty, and maintaining the shipping was getting difficult. So, because of reduced demand, the prices decreased in the second half of the year.
 

Ocean Freight Price Trend for the First Half of 2022

The covid pandemic negatively affected the shipment industries causing the ocean freight charges to inflate uncontrollably. The situation of the shipment industry, which was still fragile in the aftermath of the pandemic, worsened due to the Russian invasion of Ukraine which began in the last week of February.

The pandemic and political conflict amid the economic meltdown caused the price trend for ocean freight to reach unprecedented highs. The shipment from China that used to take 36 days to arrive on average now usually takes twice the required time.

The international freight charges reported an unparalleled increase. The cost of transporting a 40-feet steel container by sea from Shanghai to Rotterdam averaged 10,552 USD, a whopping 547% higher than the seasonal average over the last five years. The new contract rates for the Asia-North America route averaged 2500-3000 USD.

The prices slightly relaxed during the second quarter owing to the opening of ports in China after the removal of covid restrictions and a fall in the upstream crude oil prices. It costs around 7980 USD to transport a 40-foot container from China to the US’s West Coast which is almost twice the amount of 3070 USD paid a year ago.

Analyst Insight

According to Procurement Resource, the Ocean Freight rates are expected to fluctuate with the global trade sentiments in the upcoming months.

Procurement Resource provides latest prices of Ocean Freight. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.