Ocean Shipping Rates May Double in 2022

Companies are bracing for more sharp increases in shipping and logistics costs this year.

Transportation and logistics providers are seeking big increases in prices for contracts for the coming year, signaling that the inflationary pressure driven by strong demand and tight capacity in freight is likely to persist.

With demand for shipping still far outweighing capacity across the freight sector, industry experts say transport operators have leverage to raise prices when negotiating contracts.

Ocean-shipping executives say they expect the rates set in many annual contracts will double compared with agreements struck earlier in 2021, before supply-chain bottlenecks squeezed capacity.

Bjørn Vang Jensen, a consultant with Sea-Intelligence, advises customers to expect high prices on container freight into 2024.

Some trucking companies project double-digit growth in contract rates for 2022.

Pricing in most freight transport and logistics markets generally slides between largely stable long-term contract rates and spot-market pricing that is more sensitive to shifts in demand and capacity. Prices in spot markets for ocean shipping, trucking and other logistics services rose significantly in 2021.

Sources: Shipping Watch |Wall Street Journal