Global Container Freight Rates Are Increasing

(Logistics Today)

For the first time since mid-2008, average global container freight rates experienced a year-on-year increase in late 2009, according to a report from U.K.-based consulting firm Drewry. The Drewry Global Freight Rate Index recovered by 3% in the year to November 2009, after collapsing the first half of 2009, increasing by 18% between July and September 2009 and rising by another 6% between September and November 2009.

Between September and November, the global “all-in” container freight rate index rose from $2,040 per 40-ft container to $2,160, maintaining a trend of price rises that has lasted for more than six months. However, recent average global freight rates in late 2009 were still about 20% below the peak of 2007.

“On routes such as Asia to Europe, the year-on-year increase in spot rates amounts to at least 40% and we know from shippers that they are asked to agree to much higher freight rates under annual contracts renewed in early 2010,” says Philip Damas, director of Drewry Supply Chain Advisors. “January and February are a critical period for many shippers because a high proportion of annual contracts are renewed then.” Some shippers, he points out, are worried that they will be asked to pay higher freight rate levels and are unsure whether the requested rates are at or higher than market benchmark levels. Read more here.