UTIKAD President Ulusoy stated that the average freight prices decreased by 78% this month compared to June of last year and decreased to $924, “Freight prices have regressed to pre-epidemic levels.”
Aysem Ulusoy, President of the Association of International Forwarding and Logistics Service Providers (UTIKAD), evaluated the developments in freight prices, which is defined as the price paid for the cargo carried and the transportation service provided.
Expressing that the freight market went out of its normal course during the Covid-19 outbreak, Ulusoy said that several parameters affected this development.
Ulusoy, reminding that there were serious disruptions in the supply chain in the 2020-2021 period, stated that after the epidemic, the postponed demand quickly flowed to world markets, and the logistics network, which was hit, became clogged while trying to meet the increasing demand.
Ulusoy pointed out that this blockage caused freight prices to rise to unprecedented levels. “Especially, in order for the import-export balance to be established in the transports from China to the USA, the full outgoing containers had to be returned after they were empty, but the outgoing containers did not come back, which caused great problems in the supply chain.”
Container Freight Index fell by 78% in one year
Pointing out that India and Malaysia, especially China, are focusing on container production, Ulusoy explained that they are trying to overcome the equipment shortage by making additional investments.
Referring to the change in prices, Ulusoy said:
“The Shanghai Container Freight Index decreased by 78% in June compared to the same month of the previous year and fell to $924. Last year, the average freight rate was $4,222 in June. Containers remaining in certain areas during the epidemic period have returned to circulation with normalization. Thus, freight prices have regressed to pre-epidemic levels.”
Stating that China meets 90% of the world container production and that production will slow down in 2024, Ulusoy stated that a balance will be achieved in the number of containers in circulation.
Ulusoy informed that each container has a lifespan of 15 years and made the following assessment:
“Large container lines will try to bring the excess supply to normal levels by scrapping the containers that have expired and commissioning new containers. Another reason for the thought in freights is that with the supply of delayed demand in world markets, all prices on commodity, raw material and product basis started to create inflationary environments in the world markets by moving upwards. In addition, the decrease in fuel prices is another reason that affects the decrease in freight prices.”
Source: AA / Prepared by Irem Yildiz