This is because the good owners have transported their goods before and the demand has also fallen because of high inflation.

Freight for a 40-foot container from China to the West Coast of the United States is approximately $5,400, down 60% compared to January 2022. Meanwhile, shipping a container from Asia to Europe costs $9,000, down 42% compared to the earlier of the year. Freight for both routes was down strongly from a peak of more than $20,000 in September 2021, but still higher than before the pandemic.

Shipping lines are investing billions of dollars in new technologies and fuels that significantly cut down carbon emissions. (Photo: Internet)

The market conditions reversed compared to the previous. Sea freight rates increased nearly 10-fold in 2021 as supply chain disruptions, container congestion in ports, and soaring demand for goods caused importers to compete for container seats on ships. Some major US retailers such as Walmart even chartered a full ship to resolve the 

This year, retailers have stored large amounts of inventory to prevent supply chain bottlenecks, while consumption has fallen due to weakening economies such as the US and Europe, leading to a sharp drop in transportation demand.

Ship owners and analysts said that sea freight rates will drop further until 2023. A series of newly built container ships will be in operation in 2 years with global container growth expected to exceed 9% next year and 2024. The number of containers will decrease next year, before increasing again by about 2% in 2024, according to Braemar, a London-based Consulting Firm.

However, analysts and leaders of shipping lines said that freight rates will soon return to pre-pandemic levels, partly due to higher fuel costs. In 2019, the average cost of shipping a container across the Pacific to the American West Coast was only $1,500.

Shipping lines are investing billions of dollars in new technologies and fuels that significantly cut down carbon emissions from their container ships. “The additional cost of cleaner transportation will not go away. It will be a factor in increasing freight rates in the long term, ” said Mr. Jonathan Roach, an analyst at Braemar Consulting Firm.


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