MARITIME TRANSPORT FLUCTUATIONS AND CHALLENGES FOR BUSINESSES

In recent times, maritime transport costs have been continuously rising, while container shortages show no signs of improvement. This has created significant difficulties for manufacturing businesses, with some even facing the risk of shipment delays despite booking space months in advance. Below, we explore the reasons why ocean freight rates may continue to increase, recent market fluctuations, and why sea transport remains an irreplaceable mode of transportation in global trade.

Maritime Transport – The Optimal Choice in the Global Supply Chain

Currently, over 90% of global goods are transported by sea due to its superior advantages over other transportation methods:

Low transportation costs: Given the massive volume of goods transported daily, maritime shipping offers the most cost-effective solution, helping to reduce production costs and enhance business competitiveness.
Access to global supply sources: Businesses can easily import high-quality raw materials at competitive prices from various countries.
A crucial role in the economy: Maritime transport is a fundamental pillar of industrial and global trade development. Nations with well-developed ports and robust international trade activities often achieve higher economic growth.

Given these factors, sea transport remains the dominant shipping method, and despite market fluctuations, it is unlikely to be replaced in the short term.

Maritime Freight Rate Forecast: Why Do Costs Keep Rising?

Even as demand recovers post-pandemic, the maritime shipping industry continues to face multiple challenges, making it unlikely that freight rates will decline soon.

1. Global Shipping Imbalance

The asynchronous production and consumption demand across countries has led to a shortage of empty containers, while shipping lines have reduced capacity on key routes. As the global economy recovers, rising demand is further driving up freight rates.

2. Lack of Alternative Transportation Methods

For high-value goods, air freight or rail transport could be an option, but these methods remain limited in capacity. Meanwhile, low-value goods such as household items, clothing, and promotional products are highly affected by rising shipping costs.

3. Uneven Recovery Among Nations

While some countries are ramping up exports, others—particularly the United States—are experiencing a decline. This imbalance exacerbates the container shortage, putting additional pressure on freight rates.

4. Port Congestion and Supply Chain Disruptions

Major ports often experience congestion due to increased vessel traffic, while pandemic-related restrictions continue to impact operations. The temporary closure of Yantian Port (China) in mid-2021 serves as a clear example of the pandemic’s disruptive effects on global shipping.

5. Insufficient Supply of New Container Ships

Despite shipping lines placing more orders for new vessels, these will not be operational until 2023. In the meantime, demand continues to outpace supply, keeping freight rates at record highs.

Conclusion

Forecasts suggest that ocean freight costs will remain high in the near future as demand continues to grow while supply struggles to keep up. Even with the addition of new vessels, freight rates are unlikely to return to pre-pandemic levels anytime soon.

The rising logistics costs pose a significant challenge for manufacturers, particularly those operating under lean production models. In this context, businesses must:

Optimize their supply chain strategies,
Negotiate closely with shipping partners, and
Adapt flexibly to mitigate the impact of rising freight costs on product pricing.

Smart strategies and proactive planning will be essential for businesses to navigate the ongoing challenges in maritime logistics.

If you need legal support or assistance with customs procedures in import-export activities, please contact Smart Link Logistics for fast and efficient consultation. With over 14 years of experience in the transportation field, we are proud to accompany you throughout your journey.

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If you require assistance with international import and export of goods, please contact our team at Smartlink Logistics. We are available to provide you with professional guidance on our services and the necessary customs procedures.

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