CARGOCONNECT-MAY23 - Flipbook - Page 47
OCEAN FREIGHT RATES : FEATURE
T
he average contract cost
to ship a container
from China to the
US West Coast fell to
US$2,618 in February
2023 from US$8,607
in April 2022.
US-based retailers
hope to slash shipping costs and save
millions of dollars
when they meet to
negotiate long-term
contracts with ocean carriers, following last year’s
surge in rates.
When we look four or five years back, we didn’t
have strong enforceable contracts; what we had were
rate agreements, where a shipper would commit to
a certain volume, but rarely would a carrier actually
enforce that minimum quantity. Then, a carrier
would commit to a price and capacity. But, as we saw
at the start of the pandemic, those weren’t always
honoured either. However, high freight rates led to
both shippers and carriers wanting more certainty.
Now with ample capacity on both the vessel and
container side of the business, Christian Roeloffs,
Co-founder and CEO of Container xChange sees
a high possibility of an all-out price war in 2023.
“With the competitive dynamics in the container
shipping and liner industry, I especially don’t expect
the big players to hold back, and we do expect prices
to come down to almost variable costs,” he says.
CARGOCONNECT MAY 2023 | 47