Freight rate increases expected, we look at the current situation and the best rates

Freight forwarding

Freight rate increases expected, Air and Sea freight rates will begin to climb in the coming months. The impact of the war in Ukraine and the price of oil will continue to add to the cost to freight forwarding.

We look at the current situation along with our tips on protecting your supply chain.

Sea freight update

After 2 months the Shanghai lockdown is over, but it will take a while before China’s largest container port hub is up and running at full capacity. Manufacturers can operate without restrictions, but limitations remain in place for trucks in and out of the city, this pressure on trucking capacity has been the biggest logistical challenge throughout the crisis.

The city’s trucking capacity is down an estimated 45% making it difficult to get imported materials from the ports to the factories – or available shipments from factories to ports. These factors have led to an estimated 20-30% drop in export volumes out of Shanghai since the lockdown began.

Asia – Europe rates have dropped slightly despite blank sailings, due to seasonal demand, a drop in available exports, and inflation impacting European consumer demand. Rates are still considerably higher than pre-pandemic prices and due to increase.

Asia – N. America West Coast rates fell more than 30% in May and East Coast prices fell 20%. But rates are still more than 35% higher than a year ago.

China – US ocean transit times are improving, steadily falling by 12% since the start of the year.

Our UK to US container rates are currently good, and we recommend booking early, contact us sales@tps-global.com or call +44 (0)1622 237979

We are expecting to see sea freight rates increase over the coming months with the impact of the war in Ukraine and the build up to peak season.

Air freight disruption and price increases

Air cargo is still disrupted by the war in Ukraine and ongoing Covid outbreaks, especially on Asia-Europe routes. This is putting pressure on rates, which crept down during May but are still more than twice typical pre-pandemic prices.

Now the lockdown in Shanghai has been lifted, both Asia-Europe and transpacific capacity will increase leading to a surge of demand. Which we expect to push rates up despite normalised capacity.

We are holding competitive UK to US rates at the moment, so speak to one of the team to book now. sales@tps-global.com or call +44 (0)1622 237979

Road freight delays and price increases

Oil price hikes translate directly to higher diesel prices. U.S. diesel prices are up significantly from last year and are likely to go higher as sanctions are mounted against Russia, the third-largest oil producer in the world. These costs could be passed down to shippers, adding to the cost of international shipping.

The Ukraine conflict is also impacting ground transport in Europe, with holdups reported throughout the region.

Air and Sea freight rates will begin to climb in the coming months.

Importers can take steps to mitigates against disruption and cost.

Our tips include –

  • Review your supply chain costs, from storage and distribution to freight budget. Compare quotes and consider other modes of transport to reduce costs. Sea freight, and consolidated loads are cheaper.
  • Be prepared for unforeseen delays and capacity issues, factor in extra transit time.
  • Keep on top of the profitability of your goods and remember to factor in the cost of freight.
  • Plan for contingency, additional charges and delays can occur.
  • Book as early as possible and keep in touch with your freight forwarder, our TPS account managers will keep you fully informed of transit times and changes. So you know where your goods are at any time.

For more information on freight forwarders and how they can help you with moving goods read our blog here

Leave a comment