The British International Freight Association (BIFA) has reported that rates in the container shipping market are likely to remain high and could possibly increase, with little change expected for coming months or possibly years.
BIFA has 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 capacity tight, blanked sailings, equipment shortages and an increase in surcharges imposed by carriers, the present market is certainly challenging for shippers. In 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.
Robert Keen, BIFA director general, said: “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.
“Over the last few years, we have seen surcharges for fuel, equipment imbalances, the peak season and currency fluctuations. Just this week a global port authority has announced an energy transition fee of £5 per laden import container! The number of surcharges and fees continues to grow – often with no real explanation or justification.”
Regarding capacity, BIFA predicts little prospect of additional allocations. It expects the shortage of landside transport to continue, whilst carriers will not accommodate low yield freight.
BIFA added that there is likely to by ongoing short-tern changes to schedules and routings; accompanied by service speed reductions and blank sailings.
Keen concluded: “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 change of there being any improvement in the current situation for many months, or possibly even years.”
The full report can be seen here.